BEFORE THE UTAH STATE TAX
COMMISSION
______________________________
XXXXX,
Petitioner, : FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
v. : AND FINAL DECISION
:
COLLECTION
DIVISION OF THE : Appeal No. 90-1101
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.
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 XXXXX and XXXXX.
3.
Petitioner states that in XXXXX, while he was a resident of XXXXX, he was
involved in a limited partnership which invested $$$$$ in a Utah company called
"XXXXX" of XXXXX, Utah. This
company failed, according to Petitioner, to adequately document its energy tax
credits and other deductions and, therefore, in XXXXX, the Internal Revenue Service
(IRS) declared its intent to disallow the deductions. Negotiations on this issue continued until XXXXX. At that time it was agreed that all elements
of the transaction would be collapsed into the single year of XXXXX. Until this time it was never certain which
year would be chosen for the transaction to be collapsed into, nor what the
result would be when that decision was made.
Petitioner states that because of the ongoing process of the
negotiations, his XXXXX and XXXXX tax returns were not filed nor paid on
time. Petitioner states that he did file
an extension in XXXXX, but no such extension is present in Tax Commission
files. After all had been finally
determined with the IRS, Petitioner began taking care of the filings which he
had put off until the IRS decision had been made.
4.
Petitioner states that in XXXXX and XXXXX he had refunds due on his income
taxes. He states that the amount of the
refunds combined is more than the amount which he owed for XXXXX and XXXXX,
presumably including the penalties and interest charges. Petitioner states that because the state had
possession of sums larger than the amount in question, interest assessments
would not be proper. Interest, however,
is assessed upon the amounts due for the specific years in question, and the
fact that more tax was withheld from Petitioner's wages for subsequent years
than he actually owed for those years, does not impact the interest which
continued to accumulate for the years in question.
5.
Petitioner states that in XXXXX he filed a waiver request form with the Utah
State Tax Commission and that this form was apparently lost by the Tax
Commission. However, the Tax
Commission, by letter dated XXXXX, indicated to Petitioner that his waiver
could not be considered until he paid the balance of the tax owing for XXXXX,
and that he could resubmit his request for waiver when the balance was
paid. Petitioner then submitted a
second waiver request form in XXXXX. By
letter dated XXXXX, the Tax Commission informed Petitioner that his waiver
request had been received and was being processed, and requested that he allow
XXXXX to XXXXX days for processing. By
letter dated XXXXX, the Tax Commission denied Petitioner's waiver request.
Petitioner states that this was more than XXXXX days from the filing of the
second waiver request, which is more than the amount of time indicated in the
XXXXX letter. Petitioner questions why
he should be required to pay interest for the extra amount of time which the
Tax Commission took in responding to his waiver request. It should be pointed out, however, that
Petitioner had the option to pay the balance due at any time, which would have
effectively stopped the accrual of interest, and then if favorable action upon
his waiver request was made by the Commission, he could have received a refund. Petitioner, however, did not do this and,
therefore, interest continued to accrue on the amount owing. The time frame mentioned in the XXXXX letter
was merely an estimate and it should not be expected that the Tax Commission
will always be able to stay precisely within that time frame.
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 finds that there is not reasonable cause for a waiver of the
penalty and interest in this case. It
was Petitioner's decision to delay filing and paying the taxes for the periods
in question and the penalty and interest assessments on that delay have been
assessed according to law. Petitioner has not shown that the failure to timely
file and pay the taxes for the periods in question was something beyond his
control, which is necessary to meet the standard of reasonable cause for the
waiver of penalty and interest. Petitioner certainly had the ability to file
his tax returns for the years in question with estimated tax amounts for those
years.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has not been
shown which would justify a waiver of the penalty and interest associated with
the tax years XXXXX and XXXXX. It is so
ordered.
DATED
this 2O day of August, 1990.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
ABSENT
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner