BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________
In Re: ) FINDINGS
OF FACT,
: CONCLUSIONS
OF LAW,
XXXXX ) AND FINAL DECISION
:
: Appeal No.
90-1100
: Account
No. XXXXX
_____________________________________
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.
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 withholding tax.
2.
The periods in question are the second and third quarters of XXXXX.
3.
The difficulty which led to the untimely payment of the taxes in question was
initiated by the bankruptcy of one of Petitioner's major customers who owed
Petitioner a substantial amount of money.
Petitioner, not being a large enough corporation to absorb such a large
loss of cash flow very quickly, began to experience difficulties in paying all
of its creditors including the Tax Commission.
Petitioner did, however, devise a plan whereby Petitioner could pay back
all of its creditors and make them whole without Petitioner having to go into
bankruptcy itself. Petitioner has been
able to abide by the terms of that plan and has paid all of the tax amount owed
to the Tax Commission.
4.
Based upon these facts, the Internal Revenue Service (IRS) waived the penalties
associated with Petitioner's untimely payment of federal withholding
taxes. Petitioner now requests that the
penalty assessed for the periods in question on the state withholding tax be
waived on the basis that it would be a significant hardship for Petitioner to
be required to pay those penalties. Petitioner points out further that
Petitioner brought the difficulties to the attention of the Tax Commission
before the Tax Commission had ever acted on Petitioner's untimely payment of
the taxes in question.
5.
By letter dated XXXXX, the Tax Commission waived a portion of the penalty
assessed, reducing the penalty amount from $$$$$ to $$$$$. Petitioner is not
requesting a waiver of the interest.
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
The
Tax Commission recognizes the difficulties experienced by Petitioner. However,
it appears to the Tax Commission that the tax funds which were withheld from
Petitioner's employee's wages were used by Petitioner when the difficult times
came, instead of remitting that tax to the state. These were funds to which the state was entitled and they were
not funds which Petitioner was at liberty to put to its own use. A substantial reduction of the penalty has
already been granted. A further
reduction would not be warranted.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has not been
shown which would justify a further waiver of the penalty associated with the
second and third quarters of XXXXX. It
is so ordered.
DATED
this 8 day of February, 1991.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner