BEFORE THE UTAH STATE TAX
COMMISSION
_______________________________
XXXXX
Petitioner, : FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
v. : AND FINAL DECISION
COLLECTION
DIVISION OF THE : Appeal No. 90-0987
UTAH STATE TAX COMMISSION, : Account
No. XXXXX
Respondent. :
________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a formal hearing on
XXXXX. Joseph G. Linford, Presiding
Officer, heard the matter for and on behalf of the Commission. XXXXX was present and was represented by
XXXXX, Certified Public Accountant.
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 individual income tax.
2.
The periods in question are the tax years XXXXX.
3.
Petitioner was assessed additional tax on a non-filing audit completed by the
Tax Commission for the year XXXXX.
Petitioner paid the tax, penalty and interest pursuant to this audit on
XXXXX.
4.
An amended audit, based on a federal audit for the periods in question, was
completed on XXXXX, by the Tax Commission which also increased the Petitioner's
tax liability. This additional tax was
not paid within the required time period nor was an amended return filed to
report the additional income that was assessed on the federal audit.
5.
On XXXXX, a refund on Petitioner's XXXXX taxes was applied to pay off the
balance due on the XXXXX account.
6. On XXXXX, Petitioner requested an extension
for the tax year XXXXX but at that time did not remit any payment which was
required for filing a request for extension.
A notice subsequently went to Petitioner from the Tax Commission
indicating that such a payment could not be verified. On XXXXX, Petitioner made a payment of $$$$$, of which $$$$$ was
applied to a XXXXX balance due, leaving a remaining balance for the XXXXX tax
year of $$$$$. Subsequently, a refund
in the amount of $$$$$ was applied to this amount. On XXXXX, Petitioner filed his XXXXX return which showed a tax
liability of $$$$$, a penalty of $$$$$, and interest of $$$$$, along with a
payment of $$$$$ which left a balance due of $$$$$.
7.
Petitioner testified that the errors on the original tax returns for the
periods in question were caused by the accountants which Petitioner employed
during these time periods. Petitioner
was very emphatic that these were accountant's errors upon which he relied in good
faith and were not his own.
8.
Based upon these facts, Petitioner requests a waiver of the penalty and
interest assessed for the periods in question.
CONCLUSIONS OF LAW
1.
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).)
2.
Such reasonable cause has been shown for a partial waiver of the penalty in
this case. Since the errors which gave
rise to the penalty assessment on the XXXXX return were committed by
professional accountants upon whose expertise Petitioner relied, waiver of the
penalty is appropriate. Penalty for the tax year XXXXX is not waived, however,
because Petitioner has provided insufficient evidence of reasonable cause for
waiver. Waiver of the interest amounts
is not justified because the state has been deprived of the use of the funds in
question for a period of time and should be compensated for that loss of use.
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 penalties for the XXXXX tax year
only is granted and Petitioner's request for waiver of the XXXXX penalty and
all interest is denied. Interest
amounts shall be recalculated to account for the waiver of the penalty. It is so ordered.
DATED
this 23 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