BEFORE THE UTAH STATE TAX COMMISSION
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
XXXXX ) AND FINAL DECISION
: Appeal No. 90-1108
: Account No. XXXXX
STATEMENT OF CASE
This matter came before the Utah State Tax Commission for a formal telephone hearing on XXXXX. Joseph G. Linford, Presiding Officer, heard the matter for and on behalf of the Commission. Present and representing the Petitioner were XXXXX and 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 tax.
2. The period in question is the second quarter of XXXXX.
3. Petitioner's employee who was primarily responsible for filing sales tax returns was on extended maternity leave during and after the period in question. Because this employee's pregnancy was difficult, the maternity leave was longer than Petitioner had expected. Petitioner had originally expected the employee to be able to return to work in time to file and pay the sales tax prepayment for the period in question. The employee was not able, however, to return in time to make the prepayment.
4. During the same period, the employee who had been trained as the original employee's backup resigned from employment with Petitioner. A new employee was, therefore, assigned to the duties of the original employee, but the new employee had not had adequate training. Additionally, others in the office who may have advised this new employee were transferred to new jobs or involved in other aspects of a change in Petitioner's organization.
5. On XXXXX, Petitioner's largest division was sold to a newly formed partnership which necessitated a separation between Petitioner's records and those of the sold division, which included the reporting of sales and use taxes. All of these occurrences combined with the new employee's lack of knowledge contributed to the new employee's failure to make the prepayment in a timely manner.
6. Petitioner timely received a prepayment tax return from the Tax Commission, but Petitioner contends that the new employee did not recognize it as a prepayment return. The original employee returned to work for Petitioner in XXXXX but did not realize that the prepayment had not been made for the period in question and was at that time past due.
7. A letter from the Auditing Division of the Tax Commission, dated XXXXX, notified Petitioner that the prepayment for the period in question had not been made and also notified Petitioner of the imposition of penalty and interest charges because of the nonpayment.
8. For the second quarter of XXXXX, Petitioner was also untimely in remitting a prepayment. The penalty for that untimely prepayment was waived.
9. Petitioner timely made the prepayment for the second quarter of XXXXX.
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
Petitioner had been required in the past to make the necessary prepayment and has already had the penalty previously waived for an untimely remittance of a Prepayment. Petitioner was on notice that the prepayment was due and Petitioner had a duty to ensure that whichever employee was managing the remittance of sales taxes was aware of the prepayment requirement and would make the prepayment in a timely fashion.
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 second quarter of XXXXX. It is so ordered.
DATED this l5 day of February, 1991.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis