BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX
Petitioners, : FINDINGS OF
: CONCLUSIONS
OF LAW,
v. : AND FINAL DECISION
:
COLLECTION
DIVISION OF THE : Appeal No. 89-1248
UTAH STATE TAX COMMISSION, :
: Account
No. XXXXX
Respondent. :
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a formal hearing on
XXXXX. Joseph G. Linford, Presiding
Officer, heard the matter for and on behalf of the Commission. Present and representing the Petitioners
were XXXXX, Attorney at Law, and XXXXX.
Based
upon the evidence and testimony presented at the hearing, the Tax Commission
hereby makes its:
FINDINGS OF FACT
1.
The tax in question is individual income tax.
2.
The periods in question are the tax years XXXXX through XXXXX.
3.
For approximately 18 months in XXXXX and XXXXX, Petitioner, XXXXX, was
unemployed and had no regular income.
In XXXXX, Petitioner was diagnosed as having cancer.
At
this time, Petitioner had no medical insurance and his life insurance had
lapsed. In XXXXX, Petitioner obtained
employment as XXXXX of XXXXX for XXXXX.
Since that time, he has begun to recoup his losses and to pay his
accumulated debts. Petitioner states
that he had filed extensions for each of the years in question. A check of Tax Commission records, however,
shows an extension filed only for the XXXXX tax year. Petitioner also submitted his copies of extensions that he
alleged were filed for the XXXXX, XXXXX, and XXXXX tax years. Petitioner states that he had no intention
to avoid the payment of taxes, but merely wanted to postpone payment until he
could recover from losses incurred during his unemployment. Petitioners have timely paid taxes for the
years XXXXX and XXXXX, and have now paid the entire tax amount due for the
years in question including interest up to the time of payment. Petitioners now request waiver of the
penalties assessed on their account for the years in question.
CONCLUSIONS OF LAW
The
Tax Commission is granted the authority to waive, reduce, or compromise
penalties and interest upon a showing of reasonable cause. (Utah Code Ann. §59-1-401(8).)
DECISION AND ORDER
The
Tax Commission is not insensitive to Petitioners' plight and the difficulty
encountered by them in making timely payment of the tax amount in
question. However, an inability to pay
is not sufficient reasonable cause under the law for waiver of the penalty
assessment. The reason for this is
simple. If inability to pay were allowed as reasonable cause for waiver of
penalty and interest, the Tax Commission would undoubtedly experience a
multitude of taxpayers filing and paying their taxes late (or not at all)
because of inability to pay. It would
be very easy for taxpayers to be "unable to pay" their taxes if there
were no compulsion from the state in order to make payment of taxes at least an
equal priority with a taxpayer's other financial obligations. Without passing judgment as to whether this
is the case here, the Commission must, nevertheless, apply the standard
uniformly and equally to all taxpayers.
This points out the essential purpose of the assessment of penalties
which is not so much a punishment for delinquent filing and payment of taxes as
it is an incentive to encourage timely filing and payment. In this case, the facts are clear that
Petitioners were very late in paying their income taxes for the years in
question even after gaining employment in XXXXX. Under these circumstances, even if extensions were filed, they
would have been of no affect since Petitioners' payment of the taxes in
question came well after the expiration of any extension period.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has not been
shown which would justify a waiver of the penalty associated With the tax years
XXXXX through XXXXX. It is so ordered.
DATED
this 19th day of October, 1990.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner