BEFORE THE UTAH STATE TAX COMMISSION
Petitioner, ) FINDINGS OF FACT,
) CONCLUSIONS OF LAW,
v. ) AND FINAL DECISION
) Appeal No. 90‑0128
COLLECTION DIVISION OF THE )
UTAH STATE TAX COMMISSION, ) Account No. XXXXX
STATEMENT OF CASE
This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. Paul F. Iwasaki, Presiding Officer, heard the matter for and on behalf of the Tax Commission. Present and representing the Petitioner was XXXXX, Tax Manager for the Petitioner.
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 sales and use tax.
2. The audit period in question is XXXXX.
3. As the result of an audit performed by the Auditing Division, a sales and use tax deficiency in the amount of $$$$$ was assessed against the Petitioner.
4. The Petitioner's representative testified that for a part of the audit period in XXXXX the Petitioner shared an accounting staff with another corporation, each of which was a subsidiary of a larger company. In XXXXX the Petitioner hired its own accounting staff.
5. Through XXXXX, the accounting staff handling the Petitioner's sales tax returns consisted primarily of college students who were majoring in accounting. Those individuals were not capable or competent to deal with the relatively complicated issues surrounding the sales tax returns of the corporation.
6. Due to the lack of experience of the accounting staff responsible for filing the state income tax returns, a sales and use tax deficiency arose.
7. The Petitioner has taken measures to ensure the accuracy of its sales and use tax returns. Those measures include the reorganization of the finance department, the hiring of additional personnel experienced in the sales and use tax areas, and the installation of an elaborate computer system.
8. As a result of the deficiency, a penalty in the amount of $$$$$ was assessed against the Petitioner.
9. The Petitioner's representative requested that the penalty be waived claiming that the company did not act in a negligent manner, nor did it intentionally disregard the rules of the Commission.
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 testimony and evidence suggest that the sales tax deficiency was the result of the inexperienced personnel who were responsible for filing sales and use tax returns. Therefore, the Petitioner seems to allege that the deficiency arises not out of their negligence, but rather out of their inexperience.
The individuals who calculated and filed the sales and use tax returns for the Petitioner may have been working up to their abilities. However, the penalty is imposed for failing to comply with the law, and the Petitioner is required to take the necessary actions to reasonably comply with the law. The size of the sales tax deficiency indicates that it was not caused by an occasional oversight, but instead by a large number of failures to comply with the sales tax law.
Based upon the foregoing, the Tax Commission finds sufficient cause has not been shown which would justify a waiver of the penalty associated with the XXXXX, audit period. It is so ordered.
DATED this 6 day of September, 1990.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis
NOTICE: You have ten (10) days after the date of the final order to file a request for reconsideration or thirty (30) days after the date of final order to file in Supreme Court a petition for judicial review. Utah Code Ann. ''63‑46b‑13(1), 63‑46b‑14(2)(a).