BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX
Petitioner :
:
: FINDINGS
OF FACT,
: CONCLUSIONS
OF LAW
: AND FINAL
DECISION
COLLECTION
DIVISION OF THE :
UTAH STATE TAX COMMISSION : Appeal
No. 89-1051
: Account
No. XXXXX
Respondent :
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission pursuant to the Utah
Administrative Procedures Act for a formal hearing on XXXXX, before Joseph G.
Linford, Presiding Officer. Petitioner
was represented by XXXXX. No one
representing the Respondent appeared at the hearing.
After
reviewing the evidence and arguments of the parties in the record and the
recommendation of the presiding officer, the Tax Commission hereby makes its:
FINDINGS OF FACT
1.
The tax in question is special fuel tax.
2.
The period in question is XXXXX.
3.
During the time period in question, one of the employees hired by Petitioner to
help run Petitioner's Utah operations was embezzling significant amounts of
money from the Petitioner. Some of
these monies were apparently tax monies and also included payments that were
supposed to be remitted to other creditors of Petitioner. The employee involved in the embezzlement
falsified records or concealed records from Petitioner's management, and
therefore Petitioner thought that all taxes and other obligations were being
kept current when, in fact, much of the money was going into this employee's
personal bank account.
4.
Early in XXXXX, Petitioner's management began to suspect these difficulties and
subsequently investigated the situation.
It was then that Petitioner discovered the embezzlement and the
falsification or concealment of records.
Up until this time the management of Petitioner had essentially let the
Utah operation go without substantial control from Petitioner's management
which made the embezzlement and concealment possible.
5.
Because of these difficulties, Petitioner essentially shut down its operations
in Utah.
6.
Based on these facts, Petitioner now requests waiver of the penalty and
interest assessed due to the late filing and payment of taxes during the period
in question.
CONCLUSIONS OF LAW
1.
Utah Code Ann. §§59-1-401 and59-1-402 provide that penalty and interest shall
be charged for the late payment and filing of taxes.
2.
Utah Code Ann. §59-1-401(8) provides that the Tax Commission may, upon
reasonable cause shown, waive or reduce penalties and interest assessed under
the above statutes.
3.
Such reasonable cause has been shown for waiver of the penalty in this
case. The embezzlement of Petitioner's
employee was a direct cause of the tax difficulties encountered by Petitioner
during the time periods in question. But for the embezzlement, these
difficulties would not have occurred.
Interest should not be waived, however, since the State was deprived of
the use of the tax funds and should be compensated for that loss.
DECISION AND ORDER
Based
upon the foregoing, it is the decision and order of the Utah State Tax
Commission that Petitioner's request for waiver of the penalties be
granted. Any penalty amounts previously
paid by Petitioner are hereby ordered to be refunded. Interest amounts are not waived, but are ordered to be
recalculated to adjust for the waiver of the penalty.
DATED
this 20th day of June, 1990. BY ORDER OF THE UTAH STATE TAX
COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
ABSENT
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner