91-0347 - Corporation Franchise

 

BEFORE THE UTAH STATE TAX COMMISSION

___________________________

In Re: ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

XXXXX ) AND FINAL DECISION

:

: Appeal No. 91-0347

: 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 Petitioner's fiscal years of XXXXX through XXXXX, and XXXXX through XXXXX.

3. Petitioner began operations in Utah in XXXXX, and was not aware that tax would be due for that year in Utah. Petitioner had just changed its CPA firm and did not expect sufficient income in Utah upon which to pay tax for the year XXXXX to XXXXX. Therefore, no extension was filed, and the return and payment were filed late.

4. For the year XXXXX through XXXXX, an extension was filed by Petitioner, but without the required prepayment. This extension was, therefore, invalid and Petitioner's later filing of the return and payment of the tax was, accordingly, untimely.

5. Petitioner requests that a waiver of the penalty and interest be granted for the years in question.

CONCLUSIONS OF LAW

1. 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).)

2. Utah Code Ann. 59-10-516 and Utah Administrative RuleR865-9I-23 provide that, in order for an extension to be valid, a taxpayer must pay with the extension a prepayment of at least 90% of the current year's tax liability or 100% of the previous year's tax liability.

DECISION AND ORDER

The Petitioner has not presented anything which would indicate that reasonable cause exists for waiver of the penalty and interest for the years in question. Petitioner was negligent in failing to properly file its extensions, and in timely filing and paying its taxes. Therefore, the negligence penalty and interest assessments are appropriate.

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 associated with Petitioner's corporate franchise tax for Petitioner's fiscal years XXXXX through XXXXX, and XXXXX through XXXXX. It is so ordered.

DATED this 25th 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