90-3094 - Sales

 

BEFORE THE UTAH STATE TAX COMMISSION

_____________________________________

In Re: ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

XXXXX ) AND FINAL DECISION

:

: Appeal No. 90-3094

: 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 sales tax.

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

3. Petitioner mailed the sales tax return and payment to the Tax Commission on XXXXX. XXXXX testified at the hearing that he may have mistakenly mailed the sales tax check in the same envelope with Petitioner's special fuels tax payment. This envelope was preprinted with the Tax Commission's address.

4. After several days, Petitioner received a phone call from the Tax Commission indicating that Petitioner's sales tax check had been received by the special fuels tax personnel of the Tax Commission and that this was the wrong department. Petitioner instructed the person who called him from the Tax Commission to take the return and payment to the sales tax personnel for proper credit. She indicated that she would do so.

5. After receiving his XXXXX bank statement, and checking his own records, XXXXX determined that the original check for the period in question had not cleared his account. He therefore called the Tax Commission and was told that the check had not been received by the Tax Commission. Therefore, XXXXX issued another check to replace the missing check. XXXXX has never received the missing check back from the bank or from the Tax commission. Petitioner brought the difficulty to the attention of the Tax Commission before the Tax Commission notified him of the problem.

6. A review of Petitioner's bank statement shows that Petitioner's bank account did have sufficient funds at the time the original check was issued to cover the amount of that check.

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

Under the circumstances of this case, the Tax Commission finds that a penalty waiver is appropriate. Interest, however, should not be waived because the state was deprived of the use of the funds in question for a period of time and should be compensated for that loss of use, particularly when it appears that the difficulty was initially caused by Petitioner's negligence in including the payment and return of the sales tax in the wrong envelope to the Tax Commission.

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 first quarter of XXXXX. Interest is not waived but shall be adjusted to account for the waiver of the penalty. It is so ordered.

DATED this 2 day of April, 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