BEFORE THE UTAH STATE TAX COMMISSION
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
XXXXX ) AND FINAL DECISION
: Appeal No. 90-1446
: 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 was 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 tax.
2. The periods in question are the second and third quarters of XXXXX, and the second and third quarters of XXXXX.
3. During the periods in question, Petitioner suffered some financial stress which, according to Petitioner's representative at the hearing, XXXXX, rendered it difficult for Petitioner to pay its sales tax collections to the state.
4. Petitioner went out of business soon after the periods in question. The assets and business name of Petitioner were sold and the proceeds used to pay off Petitioner's creditors, including payment of some of the amount owed to the Tax Commission. XXXXX states that there are no assets or money remaining to pay the penalty and interest, although the tax amounts have been paid.
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 the plight of Petitioner, but finds insufficient cause for the waiver of penalty and interest. The tax funds in question were funds to which the state was entitled and which Petitioner should have remitted to the state. Instead, Petitioner retained the tax funds until such time as Petitioner felt it was able to remit them. Financial hardship and distress alone is not sufficient by itself to warrant a waiver of penalty and interest. If such were sufficient, then the Tax Commission would undoubtedly be overwhelmed with taxpayers making delinquent payments of taxes because of financial stress and inability to pay. It is all too easy for a taxpayer to neglect the payment of taxes and to use those funds, which belong to the state, for other pressing demands. The very purpose of penalty and interest assessments is to encourage taxpayers to remit funds to which the state is entitled on a timely basis in order to avoid the payment of penalty and interest charges.
As to the limited assets available to pay the penalty and interest amounts, it may be possible for some arrangement to be established with the Collection Division whereby these amounts can be paid on an installment basis until paid in full.
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 second and third quarters of XXXXX, and the second and third quarters of XXXXX. It is so ordered.
DATED this 15 day of February, 1991.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis