BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________
XXXXX
Petitioner, : FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
v. : AND FINAL DECISION
COLLECTION
DIVISION OF THE : Appeal No. 90-0992
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. Present and representing the Petitioner was XXXXX. Present and representing the Respondent was
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 sales and use tax.
2.
The periods in question are the XXXXX.
3.
Petitioner acknowledges that the sales tax payments for the periods in question
were late due to the incompetence of one of Petitioner's employees. Petitioner
has since changed employees responsible for this task.
4.
By letter dated XXXXX, the Tax Commission waived the penalty for the
XXXXX. For this quarter Petitioner made
the payment only one day after the deadline.
Petitioner now requests waiver of the penalty for the XXXXX as
well. The amount remaining due as of
the XXXXX, letter was $$$$$.
5.
By check dated XXXXX, Petitioner remitted to the Tax Commission $$$$$. On the back of this check is the following
language: "endorsement hereon, accepts this payment as full satisfaction
of all sums due on sales tax return for period XXXXX, including taxes, interest
and penalties." Below this
language is the stamp of the Tax Commission, and the check was subsequently
deposited to the account of the Tax Commission. Petitioner asserts that this constitutes an accord and
satisfaction of the entire amount owing and that Petitioner should, therefore, not
be held liable for any further penalty or interest amounts.
6.
During the hearing, Petitioner and Respondent agreed, subject to the approval
of the Tax Commission, that if the Commission rules against Petitioner on the
accord and satisfaction, the penalty amount for the XXXXX should be reduced to
XXXXX, that is $$$$$, and, also, that no further interest would accrue on the
account after the date of the hearing.
This stipulation and agreement was based upon the fact that the filing
for this quarter was only XXXXX days late and on the fact that the late payment
was due to the incompetence of one of Petitioner's employees who has since been
replaced, and Petitioner has taken steps to avoid this problem in the future.
Also taken into consideration was Petitioner's good past history in the payment
of sales taxes.
CONCLUSIONS OF LAW
1.
Utah Code Ann. §§59-1-401 and59-1-402 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.
The Commission finds that no accord and satisfaction occurred in this
case. In support of its position,
Petitioner cites Marton Remodeling vs. Jensen, 706 P.2d 607 (Utah 1985). On page 609 of its opinion, the Court states
as follows:
However,
when a bona fide dispute arises... and a check is tendered in full payment of
an unliquidated claim as we have here, arising out of a "time and
materials" contract, the creditor may not disregard the condition
attached.
Beyond
the fact that this case deals with a "time and materials" contract
which is not anywhere at issue here, this case does not help Petitioner because
an accord and satisfaction only applies where there is a bona fide dispute as
to the amount of the debt owed. In this
case there is no dispute as to the amount of the debt owed, the only dispute in
the case is whether Petitioner should be granted a waiver of a portion of that
amount, not whether or not that amount is correct. There is no assertion in this case that the amount charged to
Petitioner was not correct. Therefore,
there is no dispute here as to the correct amount of the debt.
4.
Reasonable cause has been shown, however, for a waiver of the portion of the
penalties assessed and for a discontinuance of the accrual of interest as of
the hearing date as indicated above, per the agreement of the parties.
DECISION AND ORDER
Based
upon the foregoing, it is the decision and order of the Utah State Tax Commission
that the penalty be reduced to $$$$$ for the XXXXX and that if payment is made
within ten days from the date of this order, interest will cease accruing on
both the XXXXX as of the hearing date, XXXXX.
Interest is also to be recalculated to take into consideration the
waiver of the penalty.
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