BEFORE THE UTAH STATE TAX
COMMISSION
_______________________________
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
XXXXX ) AND FINAL DECISION
:
: Appeal No.
91-0335
: 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 Petitioners was
XXXXX, CPA.
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. Petitioners assert that XXXXX illness with
cancer and the accompanying surgeries and treatments are the cause of
Petitioners' failure to file and pay their income taxes for the period in
question in a timely manner. XXXXX had "extensive surgery" in XXXXX.
Petitioners' representative, XXXXX, testified at the hearing that he thought a
less extensive surgery was also performed sometime in XXXXX. XXXXX also
testified that the treatments for XXXXX illness were ongoing and that XXXXX was
incapacitated by the illness. XXXXX
testified that this is the reason why the tax in question was not remitted
until XXXXX. XXXXX is not involved in
the financial affairs of the family, and therefore was not able to take care of
the tax matters while XXXXX was ill.
4. Petitioners submitted billing statements
which detail the dates upon which certain treatments were received by XXXXX for
his cancer. All of the dates indicated
are in XXXXX.
5. Petitioners assert that the Internal Revenue
Service (IRS) waived the total amount of penalties for the year in question,
and also for XXXXX and XXXXX, based upon the above reasons. A letter from the IRS dated XXXXX, addressed
to XXXXX, indicates that the IRS would "reduce the late filing and late
payment penalties."
6. XXXXX testified at the hearing that he could
not remember if an extension was filed for the period in question in Utah. He testified that his records showed that a
federal extension and a XXXXX extension were filed, but that he had no record
of an extension being filed with the state of Utah. Tax Commission records do
not show that an extension was filed.
7. Petitioners request that the penalty amounts
be waived in this case because of the above circumstances.
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
facts as presented in this case do not indicate that a full penalty waiver
should be granted. All of the evidence,
beyond vague and unsubstantiated testimony, shows that XXXXX underwent most of
his treatment during XXXXX. The tax
liability was not due until XXXXX. This
should have given Petitioners adequate time in which to prepare their records
in order to file timely for the year in question. Moreover, the fact that the tax liability was not paid until
XXXXX, indicates that the penalty should not be waived. It is conceivable that the difficulties
asserted by Petitioners in this case could perhaps have been a contributing
factor to the late payment of the tax in question. But when the tax was not paid until more than a year past the due
date, with no extension being filed, this was too long a time for the
difficulties cited by Petitioners to have continued to render Petitioners
unable to file and pay their taxes for the period in question. However, the
Commission does find sufficient cause to reduce the total penalty to 10% of the
tax amount.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has been
shown to justify a reduction of the penalty associated with Petitioners' income
tax for the tax year XXXXX, to the amount of $$$$$. It is so ordered.
DATED
this 13th day of June, 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