BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
In Re: )
: INFORMAL
DECISION
XXXXX )
: Appeal No.
90-1425
:
: Account
No. XXXXX
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission pursuant to the Administrative
Procedures Act and the rules of the Utah State Tax Commission for informal
proceedings. No hearing was requested,
therefore, this decision is based upon information contained in the Tax
Commission's file.
FINDINGS
The
Petitioner became subject to withholding tax during XXXXX. Petitioner's owner
was unfamiliar with filing requirements for withholding tax. Instead of
reporting and paying the tax on a quarterly basis, as required by law,
Petitioner segregated the funds into a separate account to be paid to the
Commission at the end of the year, when Petitioner's owner believed the tax
return was due.
As
a result of the foregoing, Petitioner did not file timely returns for the first
and second quarters of XXXXX. During
the third quarter of XXXXX, Petitioner engaged the services of a certified
public accountant who discovered Petitioner's error, filed the necessary returns
for the quarters in question, and paid the tax due by virtue of those
reports. The Petitioner remained in
business for two more quarters and properly filed and paid its withholding tax
liability for those quarters.
A
XXXXX penalty was assessed for late filing of Petitioner's withholding tax report
for the second quarter of XXXXX. An
additional XXXXX penalty for late payment of the withholding tax was also
assessed. An additional fee of $$$$$
was assessed for filing of a notice of lien.
Together, the foregoing charges and penalties totalled $$$$$.
DECISION AND ORDER
Utah
law imposes a penalty of $$$$$ or XXXXX of the tax, whichever is larger, for
late filing of a tax-due return. An
equal penalty is imposed for late payment of tax. The Commission may waive, reduce, or compromise such penalties
upon a showing of reasonable cause.
(Utah Code Ann. §59-1-401.)
Petitioner's
error regarding the filing requirements for withholding tax returns are
mitigated by Petitioner's inexperience, its successful efforts to correct its
errors when they were discovered, the fact it had segregated the tax money in
question from its other funds, and finally, by its record of good performance
thereafter. The Tax Commission,
therefore, finds that reasonable cause exists to waive the late filing and late
payment penalties totalling $$$$$ imposed against Petitioner for the second
quarter of XXXXX. The lien fee of $$$$$
is not waived. Interest charges will be
recomputed in accordance with this decision.
It is so ordered.
DATED
this 31st day of May, 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