BEFORE THE UTAH STATE TAX COMMISSION
AUDITING DIVISION OF THE : Appeal No. 90-1038
UTAH STATE TAX COMMISSION, :
: Account No. XXXXX
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.
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
Joe B. Pacheco G. Blaine Davis