BEFORE THE UTAH STATE TAX COMMISSION
v. : INFORMAL DECISION
: Appeal No. 89-2478
COLLECTION DIVISION OF THE :
UTAH STATE TAX COMMISSION, : Acct No. XXXXX
STATEMENT OF CASE
This is an appeal to the Utah State Tax Commission requesting waiver of a penalty and interest assessment on Petitioner's withholding tax return for the fourth quarter XXXXX. Pursuant to Utah Code Ann. §63-46b-5(1)(b,j) no hearing was held. A review of Petitioner's file served as the evidentiary basis for this decision.
The total amount of withholding tax due for the fourth quarter of XXXXX was $$$$$. Petitioner alleges that when the return for that quarter was sent to the Tax Commission, Petitioner included on the return a $$$$$ increase above the amount due for that quarter to make up for an underpayment on the second quarter of XXXXX. This would have made the total amount due $$$$$.
Petitioner further alleges that when the $$$$$ increase was entered into the computerized accounting system the computer issued the check for the $$$$$ instead of the total amount of $$$$$. Petitioner did not realize that this error had been made until Petitioner received the Notice and Demand for payment of taxes dated XXXXX. Petitioner then immediately sent a check for the amount of tax owing for the fourth quarter of XXXXX which was $$$$$.
Utah Code Ann. §§59-1-401 and59-1-402 provide that penalties and interest shall be imposed for the late payment and filing of withholding taxes. Utah Code Ann. §59-1-401(8) provides that upon reasonable cause shown the Tax Commission may waive or reduce penalties and interest assessed under the above statutes.
Such reasonable cause has not been shown for a waiver of the penalty and interest assessed in this case. Mere error or negligence on the part of a taxpayer is not sufficient reasonable cause under the statute, for a waiver of penalty and interest. Each taxpayer is expected to pay the correct amount of tax in a timely manner and to exercise sufficient control over computer or other systems so that errors such as the error in this case do not occur.
Regarding the request for waiver of interest, he state did not have the use of the tax funds between the time they were due and the time they were paid by the Petitioner and the state.
DECISION AND ORDER
Based on the foregoing it is the decision and order of the Utah State Tax Commission that the Petitioner's request for waiver of penalty and interest be denied.
DATED this 14th day of March, 1990.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
FOR THE COMMISSION
G. Blaine Davis