90-1560 - Corporation Franchise

 

BEFORE THE UTAH STATE TAX COMMISSION

_____________________________________

XXXXX,

Petitioner, : FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

v. : AND FINAL DECISION

:

COLLECTION DIVISION OF THE : Appeal No. 90-1560

UTAH STATE TAX COMMISSION, :

: Account No. XXXXX

Respondent. :

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. Paul F. Iwasaki, Presiding Officer, heard the matter for and on behalf of the Commission. Present and representing the Petitioner was XXXXX, attorney at law.

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 corporate income tax.

2. The period in question is the fourth quarter XXXXX.

3. The Petitioner corporation was formed with the sole purpose of acquiring property located in XXXXX, Utah.

4. After the Petitioner entered into a contract to purchase the property, its plans changed. Thereafter the Petitioner sold its contract to another party, thus creating a taxable gain. That transaction was the sole transaction the Petitioner did in Utah.

5. The Petitioner had employed a management corporation whose responsibility was to manage the accounting and tax functions of the Petitioner.

6. When the proceeds from the sale were received by the management company, the funds were deposited in an account separate from the Petitioner's. It was not until sometime after the transaction that the sales were booked into the records of the Petitioner.

7. In XXXXX, an audit of their books by the management company revealed that the tax on the gains made by the Petitioner had not been paid. A return was immediately filed along with an estimate of the tax due. That occurred on or about XXXXX.

8. As a result of the untimely filing and payment of the $$$$$ in tax due, a penalty in the amount of $$$$$ was assessed as well as interest applied at the statutorily prescribed rate.

9. The Petitioner seeks waiver of the penalty amount only.

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

Based upon the foregoing, the Tax Commission finds that sufficient cause has been shown which would justify a reduction of the penalty associated with the fourth quarter XXXXX corporate income tax to the amount of XXXXX of the tax due. It is so ordered.

DATED this 27 day of November, 1990.

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