BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
XXXXX ) AND FINAL DECISION
:
: Appeal No.
90-1504
: Account
No. XXXXX
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a formal telephone 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 withholding tax.
2. The periods in question are the first and
second quarters of XXXXX.
3. Beginning with the periods in question,
XXXXX had to take over the business of Petitioner from a previous owner who had
purchased the business previously from the XXXXX and had then left the business
and defaulted on his obligations, leaving the business in the XXXXX hands.
The
XXXXX had not operated the business for the previous five years and had grown
unaccustomed to the mechanics of operating the business, including the filing
of tax returns.
4. The returns sent to Petitioner from the Tax
Commission for the periods in question indicate the correct address and account
number, but have a person by the name of "XXXXX" as the owner of
Petitioner. XXXXX testified that they
do not know who XXXXX is and that, as far as they know, he has never had any
connection with Petitioner.
5. Confused by the incorrect name on the return
for the first quarter of XXXXX, Petitioner contacted the Tax Commission in
XXXXX for instructions and was initially told to scratch out the name of XXXXX
and insert the XXXXX names instead, and to remit the tax. However, the Tax Commission employee with
whom Petitioner had consulted later called back and told Petitioner not to
pursue that course, since confusion might result, and to await new withholding
return forms which that employee would mail to Petitioner. Petitioner states that it never received
these new forms. The XXXXX do not know
the name of the person at the Tax Commission with whom they consulted.
6. After receiving this last instruction from
the Tax Commission, Petitioner set aside the papers and the money concerned to
await the arrival of the new forms.
This was done with the form for the second quarter of XXXXX as well,
when the wrong name still appeared on that form. Petitioner was still awaiting the new returns from the Tax
Commission. Petitioner thereafter
forgot about the problem and, therefore, the taxes for the periods in question
were not filed and paid until XXXXX after Petitioner had received a notice from
the Tax Commission.
7. Based upon the foregoing facts, Petitioner
requests that the penalty and interest assessed in this case be waived.
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
In
view of the confusion created by the erroneous name on the returns and the
instructions from the Tax Commission employee for Petitioner to await the
arrival of new forms from the Commission, the Tax Commission finds that the
penalty in this case should be waived.
Interest, however, should not be waived because the state was deprived
of the use 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 first and
second quarters of XXXXX. Interest
shall be adjusted to account for the waiver of the penalty. It is so ordered.
DATED
this 20 day of February, 1991.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
Abstained
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner