BEFORE THE UTAH STATE TAX COMMISSION
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
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
Joe B. Pacheco G. Blaine Davis