91-0346 - Corporation Franchise

 

BEFORE THE UTAH STATE TAX COMMISSION

_________________________________

In Re: ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

XXXXX ) AND FINAL DECISION

:

: Appeal No. 91-0346

: Account No. XXXXX

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STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. Joseph G. Linford, Presiding Officer, heard the matter for and on behalf of the Commission. Present and representing the Petitioner were XXXXX and 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 corporate franchise tax.

2. The periods in question are the tax years XXXXX and XXXXX.

3. During the years in question, Petitioner was in the process of going out of business. Petitioner's last year of operations was in XXXXX, and Petitioner went formally out of business in XXXXX.

4. In XXXXX there were changes in Petitioner's stock ownership. When Petitioner filed its extension for the XXXXX tax year, Petitioner, which was previously a subchapter S corporation, was under the impression that there were no out of state shareholders existing at that time. Therefore, Petitioner made no tax payment with the extension. When the return was later prepared, it was discovered that there was one nonresident shareholder, and that tax was, therefore, due

5. In XXXXX, Petitioner filed its extension, but did not file any payment with that extension. Petitioner believed that the $$$$$ tax had been paid with the extension, but this was apparently not the case.

6. Petitioner has paid the tax and interest, but not the penalty assessments. Petitioner requests that the penalty be waived based upon the above facts.

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 Tax Commission finds that reasonable cause to waive the penalties in this case does not exist. Petitioner was assessed a negligence penalty for each of the years in question. This penalty is appropriate since Petitioner was negligent in neglecting to timely file and pay its taxes under the circumstances noted above.

Based upon the foregoing, the Tax Commission finds that sufficient cause has not been shown which would justify a waiver of the penalty associated with Petitioner's corporate franchise tax for the tax years XXXXX and XXXXX. It is so ordered.

DATED this 25th day of June, 1991.

BY ORDER OF UTAH STATE TAX COMMISSION.

R. H. Hansen Roger O. Tew

Chairman Commissioner

ABSENT

Joe B. Pacheco G. Blaine Davis

Commissioner Commissioner