90-0112 - Withholding

 

BEFORE THE UTAH STATE TAX COMMISSION

_____________________________________

In Re: )

XXXXX ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

: AND FINAL DECISION

: Appeal No. 90-0112

_____________________________________

STATEMENT OF CASE

This matter came before the Utah Tax Commission for a formal hearing on XXXXX. Alan Hennebold, Presiding Officer, heard the matter for and in behalf of the Commission. Present and representing the Petitioner was XXXXX, Owner.

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 withholding tax.

2. The period in question is XXXXX.

3. Based upon a federal audit of the Petitioner, the Audit Division of the Utah State Tax Commission assessed additional tax of $$$$$ against the Petitioner for the period in question. Penalty in the amount of $$$$$ and associated interest was also assessed against the Petitioner.

4. The Petitioner paid the amount of tax due under the audit then filed its request for waiver of penalty and interest.

The Tax Commission has previously waived all penalty in this matter. The Petitioner seeks waiver of interest charges as well.

5. The Petitioner requests waiver of interest on the grounds that its state tax liability resulted from the federal audit, which had assessed withholding tax on small payments made to casual labor. Such payments would not have been subject to state withholding tax. However, the Audit Division concluded that the Petitioner's liability for state tax was equivalent to one-third of its federal liability under the audit. The Petitioner did not challenge or appeal the Audit Division's conclusions.

CONCLUSIONS OF LAW

The Tax Commission is granted the authority to waive, reduce, or compromise penalties and interest upon a showing of reasonable cause. (Utah Code Ann. 59-1-401(8).)

DECISION AND ORDER

In the present case, the Tax Commission notes the Petitioner's contention that the underlying tax in this matter was assessed against the Petitioner based on his liability as determined under a federal audit. In essence, the Petitioner contends that if the state had audited his records itself, it would have concluded that no additional tax was due. Whether that is true or not, the Petitioner did not appeal the Audit Divisions' determination of his tax liability. The Tax Commission must therefore conclude that the tax assessment levied against Petitioner is correct. Interest in such situations is no more than a reasonable charge to the Petitioner for its use of tax funds during the period the Petitioner held such funds.

Based upon the foregoing, the Tax Commission finds that sufficient cause has not been shown which would justify a waiver of the interest associated with the Petitioner's withholding tax liability for the period of XXXXX. It is so ordered.

DATED this 27 day of August, 1991.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

R. H. Hansen Roger O. Tew

Chairman Commissioner

Joe B. Pacheco S. Blaine Willes*

Commissioner Commissioner