89-2610 - Withholding

 

BEFORE THE UTAH STATE TAX COMMISSION

_____________________________________

XXXXX

Petitioner, : FINDINGS OF FACT,

: CONCLUSIONS OF LAW

v. : AND FINAL DECISION

:

: Appeal No. 89-2610

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 at the hearing by XXXXX and XXXXX, Certified Public Accountant. 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 withholding tax.

2. The period in question is the fourth quarter of XXXXX.

3. The Petitioner testified that his withholding report and payment were mailed for the period in question on XXXXX. These were mailed along with Petitioner's federal taxes on the same date. The federal tax returns and payments were received by the federal government and processed without any difficulty.

4. On XXXXX, Petitioner received a letter from the Utah State Tax Commission informing Petitioner that his fourth quarter tax return and payment were delinquent. Upon investigating this, Petitioner discovered that the check mailed on XXXXX, was still outstanding and had not been presented at the bank for payment. On XXXXX, Petitioner mailed a copy of the fourth quarter withholding tax return and also a replacement check to the Tax Commission with a letter explaining these difficulties.

5. Petitioner has presented bank statements showing that there were sufficient funds in Petitioner's bank account at the time the initial check was mailed on XXXXX, cover the amount of that check. Petitioner submitted canceled checks and check stubs to show that although a check was written out to the State Tax Commission on XXXXX, it has never been returned.

6. Based on these facts, Petitioner now requests a waiver of the penalty and interest assessed upon the late filing and payment on the taxes in question.

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 due.

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 for waiver of the penalty in this case. Petitioner has demonstrated that he did have sufficient funds to pay the tax amounts in question and that a check and return were mailed timely to the Tax Commission but never arrived. Interest, however, should not be waived. The state was deprived of the use of the tax funds in question for a period of time and should be compensated for that loss of use, while Petitioner did have use of these funds until they were paid.

DECISION AND ORDER

Based upon the foregoing, it is the decision and order of the Utah State Tax Commission that Petitioner's request for a waiver of penalty is granted. Petitioner's request for waiver of interest is denied, but interest shall be recalculated to account for the penalty waiver.

DATED this 9th 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