BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX
:
Petitioner : FINDINGS OF FACT,
: CONCLUSIONS
OF LAW
v. : AND FINAL DECISION
: Appeal No.
89-2292
COLLECTION DIVISION
OF THE :
UTAH STATE TAX COMMISSION :
: 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. 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 corporate income tax.
2.
The period in question is the tax year XXXXX.
3.
The Petitioner is a corporation headquartered in XXXXX, Pennsylvania.
Beginning approximately in XXXXX and ending approximately in XXXXX of
that same year, the Petitioner corporation was formed by the merger of two
major computer companies, XXXXX and XXXXX.
This merger necessitated significant changes in personnel; the
relocation of several facilities, offices and departments; and substantial
increases in the workload due to the size of the merger transaction.
4.
In filing its corporate income tax returns for the period in question,
Petitioner estimated its taxable income based upon Petitioner's belief that
many of the restructuring items associated with the merger had been paid in
XXXXX.
5.
When these restructuring amounts were later analyzed in the summer of XXXXX,
Petitioner discovered that many items were not paid until early XXXXX which
resulted in a substantial increase in Petitioner's taxable income for
XXXXX. This analysis involved a lengthy
process of identifying all paid items and it took a considerable amount of
time. In addition, much of the
information necessary for this analysis was not able to be received by
Petitioner from its various field offices and departments until the summer of
XXXXX.
6.
As a result of the merger, Petitioner's tax department was not moved to
Petitioner's XXXXX headquarters until XXXXX.
This department was staffed until that time by many temporary employees
who were unfamiliar with Petitioner's operations and who were not capable of
determining the taxes due for the periods in question.
7.
When Petitioner originally sent in its returns for the period in question, it
also sent with those returns the amount of estimated tax noted on the
returns. However, because the amount of
taxes paid was determined to be deficient, the penalty and interest assessments
in question were imposed. By letter
dated XXXXX, the Utah State Tax Commission waived a portion of the penalties
assessed, reducing the penalty amount from $$$$$ to $$$$$. The Petitioner now requests a waiver of the
remaining penalty assessed.
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 clue.
2.
Utah Code Ann. §59-1-401(8) provides that the Tax Commission may, upon
reasonable cause shown, waive or reduce the penalties and interest imposed
under the above statutes.
3.
Such reasonable cause has been shown in this case for waiver of the penalty
assessed. Due to the merger during the
period in question, it appears to the Tax Commission that it was impossible for
Petitioner to obtain the necessary information to accurately file and pay the
taxes in question.
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 penalty is granted.
Interest
amounts shall be adjusted 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
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner