90-1518 - Withholding

 

BEFORE THE UTAH STATE TAX COMMISSION

_____________________________________

In Re: ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

XXXXX ) AND FINAL DECISION

:

: Appeal No. 90-1518

: Account No. XXXXX

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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 withholding tax.

2. The periods in question are XXXXX and XXXXX.

3. Petitioner changed ownership in XXXXX and at the same time changed its withholding tax account number. Prior to this time, Petitioner had been filing its withholding taxes on a monthly basis and continued to do so after the change in ownership and the change of the withholding account number. However, when the new withholding account number was issued, Petitioner received a booklet for quarterly deposits instead of monthly deposits. Petitioner thereafter used the quarterly tax forms to make its monthly tax deposits.

4. Petitioner used the last of these forms to file its withholding taxes for XXXXX. Tax Commission records show that this return and payment were filed XXXXX, one day past the deadline. The tax return is dated by Petitioner XXXXX and the check which accompanied the return is dated XXXXX. The back of the canceled check shows that it was deposited by the Tax Commission on XXXXX. Penalty and interest was assessed because of the fact that this return and payment were filed one day late.

5. When Petitioner ran out of the tax return forms, after filing its XXXXX return, Petitioner contacted the Tax Commission for instructions. The Tax Commission employee with whom Petitioner spoke indicated that she would mail the new tax return forms, but that if they did not arrive in time for Petitioner to make its monthly payment, then Petitioner was to file for both the months of XXXXX and XXXXX at the time of the XXXXX filing, i.e., XXXXX. Petitioner did not receive the booklet timely, and therefore did as it was instructed and filed for both the months of XXXXX and XXXXX on XXXXX. Penalty and interest were assessed for XXXXX, since the filing and payment should have been made at the end of XXXXX instead of at the end of XXXXX.

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 finds that the penalty in this case should be waived only for the month of XXXXX, due to the fact that XXXXX return and payment were just one day late. Penalty for the month of XXXXX, however, should not be waived because Petitioner should have contacted the Tax Commission sooner instead of waiting until its last tax return form was gone. Petitioner's own lack of prompt action contributed to the problem, and there is insufficient evidence upon which to base a finding of reasonable cause.

Interest should not be waived because 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 Petitioner's withholding tax for XXXXX. The penalty for XXXXX is not waived. Interest is not waived but shall be adjusted to account for the reduction of the penalty. It is so ordered.

DATED this 13th day of June, 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