BEFORE THE UTAH STATE TAX
COMMISSION
____________________________________
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
XXXXX ) AND FINAL DECISION
:
: Appeal No.
90-2376
: Account
No. XXXXX
_____________________________________
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. Present and representing the
Operations Division of the Utah State Tax Commission 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 requests a "refund" of
penalties and interest which Petitioner was required to pay to the Internal
Revenue Service (IRS) for the late filing and payment of his federal income tax
for the year in question.
4. Petitioner states that when he mailed his
state and federal income tax extension forms for the period in question, it
appears the check which Petitioner had made payable to the IRS was mistakenly
included by Petitioner in the envelope with the state extension form. Petitioner states that a refund was being
anticipated from the state for the year in question.
5. When the Tax Commission received
Petitioner's extension form with the check, the Tax Commission stamped the
check payable to itself and deposited the check. XXXXX, representative for the Operations Division of the Utah
State Tax Commission, testified that Tax Commission policy is that when the
dollar amount on the check matches the amount on the federal extension form,
the check is cashed by the Tax Commission.
XXXXX testified that only when the dollar amount on the check does not
match the amount on the extension form will the Tax Commission withhold cashing
the check and consult with the taxpayer.
He also testified that it is commonplace for the Tax Commission to
receive checks made payable to the IRS in cases where the taxpayer has intended
to pay the tax to the Tax Commission, but through confusion on the taxpayer's
part has written the check out to the IRS.
He testified that at the time the Tax Commission received Petitioner's
check and extension form, the Tax Commission had no way of knowing whether or
not Petitioner owed tax, and if so, how much tax was owed.
6. Petitioner states that the Tax Commission
"fraudulently" altered his check by making it payable to itself
rather than consulting with him, and that the state had the benefit of the
money which was supposed to be remitted to the IRS. Petitioner states that the Tax Commission was not a holder in due
course of the check and that, therefore, he is seeking damages under the
provisions of the Uniform Commercial Code (UCC).
7. A refund, with interest, was paid to the
Petitioner from the Tax Commission for the amount of the check which Petitioner
had mailed to the state with the extension form.
CONCLUSIONS OF LAW
1. The provisions in Utah relative to income
tax refunds are Utah Code Ann. §§59-10-529(7)(b),
(12),59-10-531,59-10-532,59-10-533, and59-10-538, and Tax Commission
RulesR865-9I-28 andR865-9I-29. In none of
these statutes or rules is there any provision for a refund of the type which
Petitioner seeks.
DECISION AND ORDER
The
refund provisions in Utah statutes and rules contemplate that refunds shall be
given in cases where a tax amount has been overpaid or paid erroneously to the
state, and that these refunds are to be accompanied by appropriate
interest. This was done in this case
and the Tax Commission fully complied with the law. The IRS penalty and interest amounts are not amounts which were
ever remitted to the Utah State Tax Commission, the Tax Commission never had
possession of the funds, and, therefore, a request for refund on those amounts
is inappropriate. Petitioner's
difficulty regarding the IRS penalty and interest assessments is a problem which
must be resolved between Petitioner and the IRS. The state has already fulfilled its obligations under the law and
is no longer obligated to Petitioner.
Petitioner's
citations to the UCC and his allegation that the Tax Commission was not a
holder in due course are inapposite in this case. These are matters appropriately within the jurisdiction of a
court of law and are not to be determined by an administrative body such as the
Tax Commission.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has not been
shown which would justify any refund on Petitioner's income tax account for the
tax year XXXXX, beyond the refund which has already been remitted according to
law. It is so ordered.
DATED
this 2 day of December, 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