BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX,
Petitioner, : ORDER
v. :
COLLECTION
DIVISION OF THE : Appeal No. 89-2471
UTAH STATE TAX COMMISSION, : Account
No. XXXXX
Respondent. :
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission upon a Petition for
Reconsideration, dated XXXXX, filed by the Petitioner as a result of the
Commission's final decision, dated XXXXX.
The
Petition for Reconsideration states the following additional facts not before
the Commission at the time the final decision was made:
...the
former controller left the Company at the end of XXXXX. It was not until a month later that we
discovered the embezzlement and I confronted him, in the presence of the
Company's attorney, and he admitted to a number of instances of embezzlement.
Before
he departed, the former controller assured his replacement that all payroll and
sales taxes were paid. It was not until
later that we received notices on both XXXXX and XXXXX. In fact, in our first correspondence on this
matter on XXXXX, to XXXXX, I made reference to the prepayment for XXXXX. At that time, we were still unaware that the
XXXXX payment was delinquent, and erroneously stated that the prior payments
had been made on a timely basis.
As
stated in our original petition, the controller, who had been a long time
employee of XXXXX, was responsible for the filing of all sales tax
returns. He was employed by the company
through the second quarter of XXXXX.
All correspondence relating to delinquent filings had been retained by
the controller so that no other officer of the company was aware of the
problem. It was in response to your
notice regarding the XXXXX delinquencies that the company became aware that the
XXXXX payment had not been made.
Upon
being notified that the delinquencies related to more than one period the
company contacted our office [Petitioner's accountant, XXXXX] for
assistance. Company policies have been
implemented to assure that these prepayments are made on a timely basis in the
future.
Since
the Company became aware of the XXXXX delinquency almost simultaneously with
notification of the XXXXX delinquency, we feel that the facts which allowed a
waiver of penalties for XXXXX should constitute reasonable cause for a waiver
of the penalties relating to XXXXX as well.
FINDINGS
1. Utah Administrative Rule R861-1A-5(P)
provides that a Petition for Reconsideration "will allege as grounds for
reconsideration either a mistake in law or fact, or the discovery of new
evidence." Under this rule the
Commission may exercise its discretion in granting or denying a Petition for
Reconsideration.
2. The Tax Commission finds that the Petition
for Reconsideration should be denied.
Although Petitioner may not have had actual knowledge of the
difficulties with the second quarter of XXXXX, Petitioner should have had such
knowledge.
The
two periods in question were a year apart.
Petitioner's lack of management oversight and control over the
controller left Petitioner ignorant of the difficulties during that time, and
Petitioner would have become aware of the difficulties with better control.
DECISION AND ORDER
Based
upon the foregoing, it is the decision and order of the Utah State Tax
Commission that the petition for Reconsideration is denied.
DATED
this 5th day of October, 1990.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
ABSTAINED
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner