BEFORE THE UTAH STATE TAX COMMISSION
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
XXXXX ) AND FINAL DECISION
: Appeal Nos. 90-1380 and
: Account Nos. XXXXX and
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 taxes in question are sales and withholding taxes.
2. The period in question is the third quarter of XXXXX.
3. During the month of XXXXX, Petitioner filled out the tax returns for the period and taxes in question and wrote out the checks for the amounts due. Petitioner, however, did not have funds available to pay the taxes at that time and put the returns and checks aside to be remitted when the money was available. Petitioner's intent was to pay them timely, but Petitioner forgot about the taxes and did not submit them. Petitioner discovered the difficulty in XXXXX and then paid the tax amount due. Petitioner has since paid the penalty and interest as well.
4. Petitioner feels that since an honest mistake caused the difficulty, penalty and interest should be waived.
5. The hearing on XXXXX concerned appeal number 90-1380, the sales tax account number XXXXX. Petitioner testified at the hearing that the same facts applied exactly to the withholding tax account number XXXXX, appeal number 90-1381, and requested that one decision be made on both accounts on the basis of the XXXXX hearing.
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 Petitioner's honest intent, but Petitioner was negligent and did pay the taxes in question quite late. Mere negligence, such as that evidenced in this case, is not sufficient reasonable cause under the law for a waiver of penalty and interest. In fact, one of the major purposes of the penalty is to provide an incentive for taxpayers to not be negligent in the payment of taxes. Additionally, interest should not be waived because the state was deprived of the use of the funds in question for a period of time and should be compensated for that loss of use.
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 third quarter of XXXXX. It is so ordered.
DATED this 20 day of December 1990.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis