BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________
XXXXX )
Petitioner : FINDINGS OF FACT,
:
CONCLUSIONS OF LAW,
v. : AND FINAL DECISION
AUDITING
DIVISION OF THE : Appeal No. 91-0433
UTAH STATE TAX COMMISSION : Account
No. XXXXX
Respondent :
___________________________
STATEMENT OF CASE
After
submitting briefs on the subject matter of this case, both Petitioner and
Respondent waived the right to a formal hearing. This decision is based on the entire contents of the file as
presently constituted as of XXXXX.
Based
upon the evidence and information contained in the file, the Tax Commission
hereby makes its:
FINDINGS OF FACT
1. The tax in question is corporate franchise
tax.
2. The period in question is XXXXX through
XXXXX.
3. Petitioner was audited for the period in
question.
4. During the audit, it was discovered that
Petitioner had carried forward losses from the fiscal years ending XXXXX,
XXXXX, XXXXX and XXXXX without first carrying them back to prior years.
5. Petitioner reported income in fiscal years
ending XXXXX, XXXXX, and XXXXX.
6. The Auditing Division recalculated
Petitioner's taxes after applying the losses to the prior years as required by
Utah Code Ann. §59-7-108(14). As a
result, Petitioner was assessed a tax deficiency of $$$$$, including interest.
CONCLUSIONS OF LAW
A
net loss is first carried back to the earliest of the next preceding three
years; if not entirely used to offset income of that year, it is carried to the
second year preceding the loss year; and any remaining amount is next carried
to the taxable year immediately preceding the loss year. Any amount then remaining can be carried to
each of the five taxable years following the taxable year of the net loss. (Utah Code Ann. §59-7-108(14)(c).
If
the claim for credit or refund relates to an overpayment attributable to a net
loss carryback adjustment as provided in SubSection 59-7-108(14), in lieu of
the three-year period provided for in Subsection (2)(a), the period shall be
that period which ends with the expiration of the 15th day of the 40th month
following the end of the taxable year of the net loss which results in the
carryback. (Utah Code Ann.
§59-7-141(2)(b).
...[I]n some instances, the Tax Commission
may disagree with the federal determinations and does not consider them
controlling for Utah corporation franchise tax purposes.
11. The items of major importance ordinarily
allowed in conformity with federal requirements are:
12. If loss carry-overs and carry-backs (Utah
Admin. CodeR865-6F-14 (1991).)
DECISION AND ORDER
In
the present case, none of the relevant facts are in controversy. The issue
before the Commission is whether or not the relief the Petitioner seeks can be
granted. After having reviewed the
applicable statutes and rules, the Tax Commission finds that it is unable to
grant the Petitioner's request. The statutory provisions covering this
situation clearly indicate that the accounting procedures the Petitioner used
were not allowed under Utah law and that the statute of limitations for
claiming a credit or refund due to the overpayment unfortunately has run.
Based
upon the foregoing, the Tax Commission affirms the determination of the
Auditing Division in its assessment of a tax deficiency for the audit
period. It is so ordered.
DATED
this 13th day of February, 1992.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco S.
Blaine Willes
Commissioner Commissioner