BEFORE THE UTAH STATE TAX COMMISSION
In Re: : INFORMAL DECISION
: Appeal No. 91-0080
: 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.
The tax in question is Petitioner's corporate franchise tax for the tax year XXXXX through XXXXX. Petitioner states that it, along with its parent corporation, was placed into bankruptcy reorganization on XXXXX, two days before the due date of Petitioner's tax return for the period in question. Petitioner was not allowed by the bankruptcy trustees to make disbursements for tax purposes at that time and for some time thereafter. Therefore, Petitioner was not able to make payment of its minimum tax in a timely manner. Petitioner did not file a request for extension since that request would have been rejected by the Tax Commission due to the lack of a prepayment. Instead, Petitioner filed a federal extension with its Utah return. This extension and the return were filed on the date upon which a valid extension would have expired. The Tax Commission received payment on XXXXX. Petitioner requests waiver of the penalty and interest in this case due to the fact that Petitioner was prohibited by circumstances beyond its control from paying the tax in a timely manner.
The Tax Commission finds that under the above circumstances, the penalty should be waived. Interest, however, should not be waived because the state was deprived of the use of the tax funds in question for a period of time, through no fault of its own, and should be compensated for that loss of use.
DECISION AND ORDER
The Tax Commission finds that sufficient cause does exist to waive the penalty associated with the Petitioner's corporate franchise tax for the tax year XXXXX, through XXXXX. Interest shall be adjusted to account for the waiver of the penalty. It is so ordered.
DATED this 24 day of April, 1991.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis