90-1420 & 90-1421 - Withholding

 

BEFORE THE UTAH STATE TAX COMMISSION

_______________________________

In Re: ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

XXXXX ) AND FINAL DECISION

:

: Appeal Nos. 90-1420 and

: 90-1421

: Account Nos. XXXXX and

: 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 taxes in question are sales tax and withholding tax.

2. The periods in question for the sales tax account are the second quarters of XXXXX, XXXXX, and XXXXX. The period in question for the withholding tax account is the fourth quarter of XXXXX.

3. At the hearing, Petitioner's representative, XXXXX, stated that Petitioner did not desire to appeal the penalty and interest for the withholding tax account for the fourth quarter of XXXXX, but only wished to appeal the penalties and interest for the sales tax account.

4. Petitioner submitted a waiver request form for the second quarter of XXXXX, but has not submitted a waiver request form for the other periods in question. Petitioner requested that one single decision, however, dispose of the penalty and interest question for all three quarters without the necessity of having to file additional waiver request forms for the other quarters in question. Petitioner did not file a waiver request form for the second quarter of XXXXX, because when he filed the form for the second quarter of XXXXX, he was not aware that there was a problem with the second quarter of XXXXX. Petitioner has not yet had the opportunity to file a waiver request form for the second quarter of XXXXX.

5. The penalty and interest amounts in question are as follows: For the second quarter of XXXXX, penalty is $$$$$ and interest is $$$$$; for the second quarter of XXXXX, penalty was $$$$$, but this penalty was waived as indicated by a XXXXX letter from the Tax Commission to Petitioner, and $$$$$ interest; for the second quarter of XXXXX, penalty is $$$$$ and interest is $$$$$.

6. The second quarter of XXXXX was the first time Petitioner was required to make the sales tax prepayment. Petitioner contends that it received no notice of the requirement to pay the tax for any of the periods in question, and did not receive the requisite forms to make the prepayment. When the second quarter XXXXX prepayment became due, Petitioner was still unaware of the prepayment requirement, not having yet been informed of any difficulty with the second quarter of XXXXX.

7. For the second quarter of XXXXX, Petitioner had become aware of the prepayment requirement but did not receive the appropriate form to make the prepayment and, consequently, called Tax Commission offices prior to the prepayment deadline and requested that the form be sent. Upon receiving the form, Petitioner completed it and made the prepayment, which was received by the Tax Commission on XXXXX, six days after the deadline.

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

Since Petitioner was unaware of the prepayment requirement for both the second quarters of XXXXX and XXXXX, a waiver of the penalty for the XXXXX period already having been granted, such a waiver for the XXXXX period is also appropriate. For the second quarter of XXXXX, Petitioner did attempt to make the prepayment in a timely manner by contacting Tax Commission offices and requesting the forms necessary to make the prepayment, Petitioner made that payment as soon as possible after receiving the form, and the prepayment was made within one week of the due date. This indicates that a waiver of the penalty for the second quarter of XXXXX is appropriate. Interest for all of the periods in question, however, should not be waived since the state was deprived of the tax 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 been shown which would justify a waiver of the penalty associated with the second quarters of XXXXX and XXXXX. Interest shall be adjusted to account for the waiver of the penalty amounts. Appeal 90-1421 concerning the withholding tax account, number XXXXX, is dismissed per Petitioner's request to withdraw that appeal. It is so ordered.

DATED this 12 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