BEFORE THE UTAH STATE TAX COMMISSION
: FINDINGS OF FACT,
v. : CONCLUSIONS OF LAW
: AND FINAL DECISION
: Appeal Nos. 89-1948
COLLECTION DIVISION OF THE : to 89-1949
UTAH STATE TAX COMMISSION :
Respondent : Account No. XXXXX
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. The 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 sales and use tax and transient room tax.
2. The periods in question are the second and fourth quarters of XXXXX.
3. Previous to the periods in question, the Petitioner's business, a bed and breakfast operation called XXXXX, was managed almost solely by XXXXX. Ms. XXXXX was a trusted employee who did a very good job for the Petitioner in managing this enterprise. Just prior to and during the periods in question, Ms. XXXXX discovered she had terminal cancer and has since passed away. Because of the difficulty of Ms. XXXXX battling the cancer while also running the business, an assistant, XXXXX, was hired to take over many of Ms. XXXXX's duties.
4. During this time, when Mr. XXXXX was helping to operate the business, Petitioner's husband was diagnosed as having prostrate gland cancer which required Ms. XXXXX and her husband to travel to Salt Lake City for surgery and treatment. When Petitioner returned to St. George, Petitioner discovered that Mr. XXXXX had not been filing and paying the taxes in a timely manner. As soon as this was discovered, Petitioner took immediate steps to rectify the situation.
5. In addition to the sales taxes, Petitioner's withholding taxes were also subject to these difficulties. Petitioner appealed to the Utah State Tax Commission for a waiver or penalty and interest on the withholding tax, and by
letter dated XXXXX, the Tax Commission waived all penalties associated with withholding tax. These same circumstances which caused the late filing and payment of the sales and transient room taxes also caused the late filing and payment of the withholding taxes.
6. Petitioner now requests a waiver of the penalty assessed on the sales and transient room taxes in this case.
CONCLUSIONS OF LAW
1. Utah Code Ann. §§59-1-401 and59-1-402 provide that penalties and interest shall be imposed 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 for waiver of the penalty has been shown in this case. The severe illness of Petitioner's employee, who was solely responsible for the filing and payment of the taxes in question, and her consequent inability to properly train and instruct her replacement in doing so, coupled with the fact that under the same circumstances the Tax Commission has previously waived withholding tax penalties, indicate that reasonable cause for waiver of the penalties does exist in this case.
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 penalties on the sales and transient room taxes be granted. Interest shall be recalculated to account for the waiver of the penalty.
DATED this 6TH day of August, 1990.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis