BEFORE THE UTAH STATE TAX
COMMISSION
__________________________
In Re: ) FINDINGS
OF FACT,
: CONCLUSIONS
OF LAW,
XXXXX ) AND FINAL DECISION
:
: Appeal No.
90-1389
: 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 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 and use tax.
2.
The period in question is the third quarter of XXXXX.
3.
Petitioner timely mailed its tax return and payment for the period in question
to the Tax Commission. Upon the
presentation of the check to Petitioner's bank, however, the check was not
honored due to insufficient funds.
This
was a mistake on the part of the bank employee involved since Petitioner has a
revolving line of credit with its bank which enables Petitioner to draw on that
line of credit when checks are presented in excess of the amount of funds
actually in Petitioner's account.
Therefore, in this case the bank employee should have drawn on
Petitioner's line of credit to cover the check to the Tax Commission pursuant to
established procedures between Petitioner and the bank.
The
employee did not do so and when Petitioner was notified by the Tax Commission
in XXXXX that the tax was due, Petitioner immediately paid the tax amount. The Tax Commission apparently did not
attempt to redeposit the original check after its initial rejection by the
bank.
4.
A few months before the period in question when Petitioner mailed in its
payment and check for the second quarter of XXXXX, the same difficulty occurred
except that the Tax Commission did redeposit the check after its initial
rejection by the bank and that check was then honored by the bank. Petitioner feels that the same procedures
should have been applied for the period in question, although Petitioner states
that it was informed by the Tax Commission that the policy of redepositing
dishonored checks has been changed by the Tax Commission so that the Tax
Commission no longer redeposits dishonored checks.
5.
Petitioner has presented a bank statement and evidence of the existence of the
line of credit which indicates that if the proper procedure had been followed
by the bank employee, the initial check would have been honored.
6.
Based upon the foregoing, the Petitioner requests that the penalties and
interest be waived in this case.
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
difficulties present in this case were caused by factors and people out of the
control of Petitioner and Petitioner should, therefore, not be liable for the
penalties assessed. Interest, however,
should not be waived since the state was deprived of the use of the tax funds
in question for a period of time through no fault of its own and should be
compensated for that loss of use.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has been
shown which would justify a waiver of the penalty associated with the third
quarter of XXXXX. Interest shall be adjusted
to account for the waiver of the penalty. 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