90-1423 - Individual Income

 

BEFORE THE UTAH STATE TAX COMMISSION

__________________________

In Re: ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

XXXXX & XXXXX ) AND FINAL DECISION

:

: Appeal No. 90-1423

: 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 Petitioners 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 individual income tax.

2. The period in question is the tax year XXXXX.

3. During the time period from late XXXXX to XXXXX, Petitioners and their accountants were involved in negotiations with the Internal Revenue Service (IRS) regarding previous tax years, including the assessment of an additional amount of tax by the IRS which was later shown to have been an erroneous assessment.

When the settlement with the IRS did occur in XXXXX, the settlement resolved all of the disputes between Petitioners and the IRS and also finalized amounts due in the intervening years, up until the time of settlement. The final settlement did not result in as large a refund to Petitioners as Petitioners had expected. In anticipation of the larger refund, Petitioners did not file their taxes timely for the year in question because they felt that a refund would be owed them for that year as well.

4. Petitioner, XXXXX, states that Petitioners could not file a complete tax return for the year in question until the negotiations with the IRS for previous years had been finalized. Petitioners assert that before this time they did not have the information necessary to file an accurate return for XXXXX. When the return for XXXXX was filed on XXXXX, Petitioner states that there were "adjustments and corrections" relative to the settlement with the IRS that had an effect on the XXXXX tax return. Petitioners had timely filed an extension for the year in question.

5. Petitioners, for similar reasons, did not file their XXXXX federal income tax return timely. Upon presentation of the above facts to the IRS, the federal penalty for that late filing was waived.

6. Based on the foregoing facts, Petitioners request a waiver of the penalty assessed 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

It is clear that Petitioner had a duty to timely file for the year in question, but did not so file. If adjustments would later be warranted because of the impact of the actions of the IRS, an amended return could have been filed.

Based upon the foregoing, the Tax Commission finds that sufficient cause has not been shown which would justify a waiver of the penalty associated with the tax year XXXXX. It is so ordered.

DATED this 9 day of January, 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