BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX, )
:
Petitioner, ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
v. ) AND FINAL DECISION
:
COLLECTION
DIVISION OF THE ) Appeal No. 90-0012
UTAH STATE TAX
COMMISSION, :
) Account
No. XXXXX
Respondent. :
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a telephone formal hearing
on XXXX. Joseph G. Linford, Presiding
Officer, heard the matter for and on behalf of the Commission. Present and representing the Petitioner were
XXXXX and XXXXX.
Based
upon the evidence and testimony presented at the hearing, the Tax Commission
hereby makes its:
FINDINGS OF FACT
1.
The tax in question is oil and gas severance tax.
2.
The period in question is the tax year XXXXX.
3.
Petitioner cites a change in the oil and gas severance tax law as the cause of
the situation which gave rise to the penalty and interest assessments in this
case. Petitioner is a working interest
owner in the XXXXX XXXXX located in Utah, and the product from this unit is
taken in kind by Petitioner. The
operator of the unit is XXXXX. Prior to
XXXXX, Petitioner stated that the law provided that unit operators were to
obtain price information from working interest owners taking product in
kind. Petitioner cites this pre-1983
law as Utah Code Ann. §59-5-67. The new
law, however, now located in Utah Code Ann. §59-5-101, et. seq., according to
Petitioner, deleted the requirement for the solicitation of price information
from working interest owners taking product in kind. Contrary to Petitioner's belief, however, the change was not a
change in law, but in Utah State Tax Commission policy.
4.
The evidence shows that at least some companies elected to continue reporting
under the old requirements for the tax year XXXXX and then to implement the
requirements of the new policy beginning in XXXXX. Petitioner communicated their desire to do this to XXXXX and,
accordingly, communicated their XXXXX volumes and taxable values to XXXXX for
XXXXX to include on its annual return.
Petitioner assumed that XXXXX would take care of the filing of this
information from this point, but this was apparently not done by XXXXX. A subsequent audit performed by the Tax
Commission, therefore, showed that Petitioner did not file on its working
interest share for XXXXX.
5.
Petitioner requests that the penalty be waived in consideration of XXXXX's failure
to include Petitioner's values on XXXXX's annual return, contrary to
Petitioner's instructions, and the time constraints involved between the change
in policy and its implementation which made it difficult for companies such as
Petitioner's to implement the changes in its operations.
CONCLUSIONS OF LAW
1.
Utah Code Ann. §§59-1-401 and 59-1-402 provide that penalties and interest
shall be assessed for the late filing or payment of taxes.
2.
Utah Code Ann. §59-1-401(8) provides that upon reasonable cause shown, the
Commission may waive or reduce penalties and interest assessed under the above
statutes.
3.
Such reasonable cause has been shown for a waiver of the penalty assessed under
the considerations outlined above.
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.
DATED
this 29 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