BEFORE THE UTAH STATE TAX
COMMISSION
____________________________________
In Re: )
: ORDER
XXXXX )
: Appeal No.
90-1651
: Account
No. XXXXX
____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission upon a Petition for
Reconsideration, dated XXXXX, filed by the Petitioner as a result of the
Commission's final decision, dated XXXXX.
FINDINGS
1. Utah Administrative Rule R861-1A-5(P)
provides that a Petition for Reconsideration "will allege as grounds for
reconsideration either a mistake in law or fact, or the discovery of new
evidence." Under this rule, the
Tax Commission may exercise its discretion in granting or denying a Petition
for Reconsideration.
2. In paragraph seven on page three, the final
decision states: "Petitioner later decided that he should check into his
tax liability for the period in question and, therefore, contacted XXXXX for
that purpose." The period in
question in this case is the tax year XXXXX.
The Petition for Reconsideration states that Petitioner did not contact
XXXXX until XXXXX because he was aware that he had incurred tax liability for
the tax year XXXXX. At this time he did
not know that he had incurred any liability for XXXXX, and he was surprised to
learn from XXXXX that he owed the tax for the period in question as well as for
XXXXX. Petitioner states that it is
difficult for him to understand how "in equity" he could be liable
for tax in XXXXX when all of his income except for "very basic living
expenses" was spent in paying off loans which Petitioner had obtained in
order to help defer the cost of his litigation. Petitioner states that
"the standard of care required from an American citizen who has been used
to filing tax returns all his life would be higher than that called for from a
XXXXX citizen who had no previous experience of filing tax returns in the
U.S." Previous to the year in
question, Petitioner had utilized professional tax preparers in preparing his
income taxes. Petitioner relies on
equity rather than the law to support his contention that penalty and interest
should be waived in this case.
3. Other than the above, the Petition states no
mistake in law or fact, nor does it assert the discovery of new evidence. The above contentions by Petitioner are
unpersuasive. Whether Petitioner did or
did not know that he was liable for tax for the year in question is irrelevant
since Petitioner was liable for the tax and was negligent in not remitting the
same. The fact that all of his income
was consumed to pay off his loans is also irrelevant. The deciding factor is that Petitioner did have income which was
taxable. How Petitioner used that
income does not alter the fact that it was income upon which tax was due.
4. As far as the standard of care to which
Petitioner refers is concerned, Petitioner, by living in the United States, has
subjected himself to the laws of the United States regarding the filing and
payment of income taxes. Petitioner did file and pay income taxes previous to
the year in question. Under the law,
Petitioner is held to the same standard of care as anyone else who is required
to file tax returns.
5. The Tax Commission is bound by the terms of
the law to carry into effect the provisions of the law. Petitioner's appeal to equity does not
change the fact that the law has been correctly applied in this case. Equity cannot mandate a different result.
6. Petitioner states that the burden of proof is
on the state in proving Petitioner's negligence, similar to a criminal
case. Petitioner states that where
there is a reasonable doubt regarding negligence, the benefit of the doubt
should go to Petitioner. However,
Petitioner is mistaken. Utah Code Ann.
§59-10-543 provides that the burden of proof is on the Petitioner in cases such
as this one. Petitioner has not met the
burden of proof to show that he was not negligent in this case.
7. The fact that Petitioner consulted with a
graduate student at XXXXX does not indicate that Petitioner took reasonable
care. Petitioner may have had trust in the graduate student, but this is no
indication that Petitioner's trust was well placed. Apparently, in this case it was not. A prudent person in
Petitioner's position would have taken the time to look into his tax liability
further to determine whether a tax liability was due, and if it was determined
that no liability was due, then a prudent person may well have filed a return
showing that fact.
8. Petitioner states that it is difficult for
him to conceive of a stronger case for establishing reasonable cause to waive
the penalty and interest. Under the
above reasoning, however, this case does not meet the standard of reasonable
cause. That standard requires that the
difficulties which led to the late filing or payment of the tax were
circumstances beyond the control of the taxpayer. In this case, such circumstances did not exist. The taxpayer was at all times in control of
the situation, but did not sufficiently follow up to insure that his tax
liability for the year in question was paid in a timely manner.
DECISION AND ORDER
Based
upon the foregoing, it is the decision and order of the Utah State Tax
Commission that the Petition for Reconsideration is denied. It is so ordered.
DATED
this 28 day of March, 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