BEFORE THE UTAH STATE TAX
COMMISSION
__________________________
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
XXXXX ) AND FINAL DECISION
: Appeal No.
91-0089
: Account
No. XXXXX
_______________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a formal telephone 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 corporate franchise
tax.
2. The periods in question are the tax years
XXXXX, and XXXXX.
3. Petitioner is a small family corporation
with family members serving as officers and directors. Petitioner's tax matters were handled by a
professional tax consultant employed by Petitioner. Petitioner essentially turned over all tax matters to this
consultant and assumed that the consultant would take care of all of the taxes,
including the tax in question.
4. Petitioner's officers were not aware that
Petitioner was liable for the state franchise tax until they were notified
about the delinquent payments for the periods in question in XXXXX. Once notified, Petitioner promptly paid the
tax for the periods in question. The
tax for subsequent years has been paid timely.
5. When Petitioner approached the tax
consultant and inquired as to why the state franchise tax had not been paid,
the consultant replied that he thought that perhaps the Petitioner could just
get away with not paying the tax and hopefully no one would notice. Upon receiving this reply, Petitioner fired
the tax consultant.
6. Petitioner is of the opinion that the Tax
Commission should have notified Petitioner earlier about the delinquency of its
corporation franchise tax payments.
Petitioner states that the accumulation of the delinquent payments for
this long period of time has made the tax liability into a heavy financial
burden on Petitioner, which has limited assets.
5. Petitioner relied heavily upon the
professional tax consultant for direction and advice, since none of the
officers of Petitioner had legal or business backgrounds. All of Petitioner's officers are involved in
other professional activities and the business of Petitioner is conducted by
them "on the side".
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
The
penalty and interest in this case should not be waived. As a corporation operating under the laws of
Utah, Petitioner is responsible for determining the tax laws applicable to
Petitioner and complying with them. Petitioner is also responsible for the
actions of the professional tax consultant in its employ. It is apparent in this case that Petitioner
did not exercise sufficient oversight relative to the tax consultant, which led
to Petitioner's tax difficulties.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has not been
shown which would justify a waiver of the penalty and interest on Petitioner's
corporate franchise tax for the tax years XXXXX, and XXXXX. It is so ordered.
DATED
this 7th day of June, 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