91-0335 - Income

 

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