BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
XXXXX ) AND FINAL DECISION
:
: Appeal No.
90-1536
: 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 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 individual income
tax.
2. The period in question is the tax year
XXXXX.
3. Petitioner recently moved to her present
residence from her former residence and employment in the XXXXX area. While Petitioner was there she was audited
by the Internal Revenue Service (IRS) for the year in question and a deficiency
was determined by the IRS.
4. On one occasion, while Petitioner was with
the IRS auditor assigned to her case, she asked the auditor to call the Utah
State Tax Commission to inquire whether any deficiencies existed for the year
in question as far as the state was concerned.
The IRS auditor talked to someone at the Tax Commission on the telephone
while Petitioner was present. The IRS
agent told Petitioner that the person from the Tax Commission had said that
there were no deficiencies indicated for the year in question on Petitioner's
state account, and that absent any further notification to either Petitioner or
the IRS agent, Petitioner was to assume that no deficiency would be assessed by
the state.
5. Petitioner did not receive any notice of an
audit deficiency until XXXXX, when Petitioner was notified that her XXXXX tax
refund was being applied to the audit deficiency, which by this time included
penalty and interest charges.
Petitioner then filed this appeal specifically requesting a waiver of
the interest which has been assessed.
6. The letter filed by Petitioner which has
given rise to this case, was addressed to one of the Tax Commission's employees
in the Appeals Section. Therefore, the letter was sent to the Appeals Section
and has been dealt with as a regular appeal.
However, Petitioner has not filed a waiver request form for initial
action by the Commission before appeal to the Appeals Section, as is the usual
procedure. Petitioner requested at the
hearing that the case be resolved at the hearing level with the Appeals Section
without having to file a waiver request form.
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. S59-1-401(8).)
DECISION AND ORDER
In
most instances where an IRS audit discloses a federal tax deficiency, there
will also be a corresponding tax deficiency on the state level upon
notification to the state by the IRS of the federal tax deficiency. Interest is
appropriately assessed from the time this deficiency should have been paid to
the time that it is paid. In this case,
such interest was assessed as well as a required $$$$$ late payment penalty. Sufficient cause has not been shown to
indicate that a waiver of the penalty and interest is appropriate. Regarding
the interest charges in particular, the state has been 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 not been
shown which would justify a waiver of the penalty and interest associated with
the tax year XXXXX. It is so ordered.
DATED
this 15 day of February, 1991.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
ABSENT
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner