91-0033

Corporation Franchise

Signed 4/10/91

 

                   BEFORE THE UTAH STATE TAX COMMISSION

                   _____________________________________

 

In Re:                            )    INFORMAL DECISION

XXXXX                             )    Appeal No. 91‑0033

                                  )    Account No. XXXXX

                   _____________________________________

 

                             STATEMENT OF CASE

          This matter came before the Utah State Tax Commission pursuant to the Administrative Procedures Act and the rules of the Utah State Tax Commission for informal proceedings.  No hearing was requested, therefore, this decision is based upon information contained in the Tax Commission's file.

                                 FINDINGS

          The tax in question in this case is corporate franchise tax for the period XXXXX through XXXXX.  Petitioner states that it did not receive the appropriate form, Form TC‑20, from the Tax Commission for filing its taxes for the period in question, but it did receive a booklet containing four (4) Forms TC‑20 ES, Utah Estimated Corporation Franchise Tax prepayment forms. Petitioner cites the Commission's attention to a paragraph in the general information section of the TC‑20 ES booklet.  It reads as follows:

          Every corporation subject to a corporate franchise tax by the State     of Utah and expecting to have a Utah tax liability of $$$$$ or more      in the current year, or every corporation which had a tax liability                         of $$$$$ or more in the previous tax year, must make estimated tax           prepayments of not less than 90% of the anticipated tax liability.

          Petitioner did not anticipate any tax liability for the period in question.  In the previous tax year, Petitioner had a tax liability which it paid in the amount of the $$$$$ minimum tax.  Based upon the above, Petitioner concluded that there was no tax liability for the period in question and, therefore, did not file a return.  The instructions included with the Forms TC‑20 ES did not state that a minimum tax was required.

          Although Petitioner should have been aware of the requirement to pay the $$$$$ minimum tax for the period in question because Petitioner had made that payment in previous years, the Tax Commission finds that the penalty should be waived because Petitioner had received the wrong tax forms and instructions from the Commission, which was the cause of the confusion in this case.  To a taxpayer in Petitioner's situation, the instructions cited by Petitioner could be confusing if the taxpayer relied solely upon those instructions.  However, although the Commission finds that the penalty should be waived, the Commission emphasizes that Petitioner should have obtained and relied upon the complete instructions included with the usual return, Form TC‑20, with which Petitioner was familiar because Petitioner had filed the Form TC‑20 in the past.

                            DECISION AND ORDER

          The Tax Commission finds sufficient cause does exist to waive the penalty associated with Petitioner's corporation franchise tax for the period XXXXX, through XXXXX.  Interest shall be adjusted to account for the waiver of the penalty.  It is so ordered.

          DATED this 10 day of April, 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

 

NOTICE: You have twenty (20) days after the date of the final order to file a request for reconsideration or thirty (30) days after the date of final order to file in District Court a petition for judicial review.  Utah State Tax Commission Administrative Rule R861‑5A‑l(p) and Utah Code Ann. '63‑46b‑14(3)(a).

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