BEFORE THE UTAH STATE TAX COMMISSION
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
XXXXX ) AND FINAL DECISION
: Appeal No. 91-0352
: Account No. XXXXX
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.
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 sales tax.
2. The period in question is the first quarter of XXXXX.
3. Petitioner maintains that check XXXXX for the entire tax amount was mailed timely with the sales tax return for the period in question on XXXXX. XXXXX testified under oath at the hearing that she was absolutely positive that the check was included with the tax return. Petitioner has in operation, and did have in operation during the period in question, a "triple checking" system which insures that all checks mailed by Petitioner match the reports which they accompany and that they are mailed to the proper recipients. XXXXX testified that she has at least two other people besides herself check each mailing, particularly tax mailings, to ensure that the amount of the check and the amount on the tax return match, that the check and the return are included in the same envelope, and that the envelope is addressed correctly and mailed timely. XXXXX testified that this did occur in this case. Petitioner also asserts that the check was stapled to the tax return for the period in question.
4. During the latter part of XXXXX, Petitioner received a Notice and Demand for Payment of Tax from the Tax Commission. Petitioner contacted the Commission offices and was informed that the Commission had not received the check. The return was timely received but the accompanying check was allegedly not received by the Tax Commission. Petitioner then stopped payment on the first check and immediately sent replacement check XXXXX on XXXXX.
5. Later in XXXXX, Petitioner was contacted by XXXXX of the Tax Commission and told that the second check had not been received. However, Petitioner had contacted its bank which had verified that the check had been cashed in early XXXXX. XXXXX thereafter checked into the matter and discovered that there had been an error in posting. The payment had not been posted to Petitioner's account. XXXXX assured Petitioner that she would take care of the problem.
6. In early XXXXX, Petitioner received another notice from the Tax Commission demanding the payment of penalty and interest, which had been assessed because of the late receipt by the Tax Commission of the payment for the period in question. Petitioner thereafter appealed the assessment of the penalty and interest. By letter dated XXXXX, the Tax Commission waived the penalty which had been assessed, but not the interest which at the time of the letter amounted to $$$$$. Petitioner has paid this amount. Petitioner now appeals for waiver and refund of the interest.
7. Given the above fact situation, Petitioner maintains that the Tax Commission did receive the first check mailed with Petitioner's timely filed tax return, but that the Tax Commission apparently lost the check. Petitioner maintains that Petitioner did not earn any interest on the funds in question, inasmuch as its checking account does not bear interest. A review of Petitioner's bank statement shows that Petitioner had sufficient funds in the bank during the time the initial check was written to cover the amount of that check.
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 indicate that Petitioner did timely mail its tax payment along with the tax return for the period in question. Petitioner's "triple checking" system, as well as the fact that Petitioner states that the check was stapled to the return, verifies that both the payment and the return were submitted by Petitioner together and timely.
Based upon the foregoing, the Tax Commission finds that sufficient cause has been shown which would justify a waiver of the interest associated with Petitioner's sales tax account for the first quarter of XXXXX. The payment of interest previously made by Petitioner to the Tax Commission is ordered to be refunded to Petitioner. It is so ordered.
DATED this 6th day of June, 1991.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis