BEFORE THE UTAH STATE TAX
COMMISSION
__________________________________
XXXXX,
Petitioner, :
: ORDER
v. :
AUDITING
DIVISION OF THE : Appeal No. 90-1038
UTAH STATE TAX COMMISSION, :
: Account
No. XXXXX
Respondent. :
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission upon a Petition for
Reconsideration, dated XXXXX, filed by the Petitioner as a result of the
Commission's final decision, dated XXXXX.
FINDINGS
1. Utah Administrative Rule R861-1A-5(P)
provides that a Petition for Reconsideration "will allege as grounds for
reconsideration either a mistake in law or fact, or the discovery of new
evidence." Under this rule, the
Tax Commission may exercise its discretion in granting or denying a Petition
for Reconsideration.
2. In its petition, the Petitioner alleged that
there was a mistake in the Findings of Fact, specifically, the Petitioner
alleged that the error rate for tax accounting transactions was substantially
less than that inferred by the Commission's decision. The correct tax compliance error ratio is less than XXXXX of the
total transactions conducted during the audit period rather than the XXXXX as
inferred by the Commission's decision.
DECISION AND ORDER
The
basis for the imposition of the penalty in this case does not rest upon the
degree to which the Petitioner was able to accurately handle its tax
matters. The basis for the imposition
of the penalty is the fact that those errors found during the audit period were
errors of the same type which had been discovered in prior audits of the
Petitioner.
The
Tax Commission recognizes that to hold the Petitioner to a standard of
perfection in handling its tax matters is unreasonable. What the Tax Commission does find, however,
is that it is not unreasonable for the Petitioner to handle correctly those
matters which it had already been put on notice as to the correct method of
accounting. This is particularly true
where, as here, those items, though relatively few in number, are of a much
greater magnitude in terms of dollar size than the vast majority of its other
accounting transactions. Petitioner had
failed to properly report taxable sales of approximately $$$$$. For Petitioner to fail to properly report
the taxes on transactions of that size after they had been put on notice by the
prior audit as to the correct method of accounting for that type of
transaction, is negligence, and the imposition of a penalty is proper.
Based
upon the foregoing, it is the decision and order of the Utah State Tax
Commission that the Petition for Reconsideration is denied. It is so ordered.
DATED
this 4 day of December, 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