BEFORE THE UTAH STATE TAX
COMMISSION
__________________________
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
XXXXX ) AND FINAL DECISION
: Appeal No.
91-0449
: Account
No. XXXXX
______________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a formal hearing on
XXXXX. Alan Hennebold, 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 individual income
tax.
2. The periods in question are XXXXX and XXXXX.
3. With respect to XXXXX, Commission records
indicate that the Petitioner filed his income tax return and paid the liability
established thereby in a timely manner.
An audit performed in XXXXX increased the Petitioner's tax liability
from $$$$$ to $$$$$. A 10% negligence
penalty was imposed on the amount of tax found due by the audit. Interest charges were also assessed against
the Petitioner. The Petitioner has paid
$$$$$ toward his liability, leaving $$$$$ attributable to penalty and interest
unpaid. The Petitioner does not recall
the circumstances surrounding his XXXXX tax liability.
5. With respect to XXXXX, the Petitioner again
filed and paid his income tax liability in a timely manner. However, as a result of an audit of his
federal return, his federal adjusted gross income was increased. The Petitioner did not amend his state
income tax return to reflect the change in adjusted gross income. As a result, Commission staff made the
necessary adjustment and his state income tax liability was increased by $$$$$. When the Petitioner did not pay the additional
tax due within 30 days, a $$$$$ late payment penalty and a $$$$$ legal fee were
assessed against him, as well as interest.
The Petitioner has now paid $$$$$, which is the amount of his tax
liability, leaving unpaid the $$$$$ attributable to penalty and interest.
CONCLUSIONS OF LAW
Utah
law imposes a penalty of either $50 or 10% of the tax, whichever is larger, for
late filing of a tax-due return. An
equal penalty is imposed for late payment of tax. (Utah Code Ann. §59-1-401(2).)
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
Petitioner seeks waiver of the various penalties and interest assessed against
his XXXXX and XXXXX income tax liability.
The Petitioner concedes he does not recall the circumstances of his
liability for the XXXXX tax year. With
respect to the XXXXX tax year, he explains that he attempted to obtain
information regarding the reasons for the additional tax, penalty and interest,
but received no clear explanation.
As
noted above, the Commission is authorized to waive or reduce such penalty upon
a showing of reasonable cause.
Reasonable cause, as determined by the Commission, is a cause which
arises despite ordinary care and prudence exercised by the taxpayer. In this case, the Petitioner has been unable
to recall any circumstances which would support waiver of penalty and interest
for XXXXX. With respect to XXXXX, the
Petitioner's state income tax liability was increased as a result of an audit
of his federal income tax return. The
Petitioner may not have agreed with, or even understood, the result of the
audit of his federal income tax return.
However, once that audit became final, he was obligated to make
corresponding adjustments to his state income tax return, as well as pay any
increase in liability. It is his
failure to pay the increased state liability within a timely manner that has
resulted in the assessment of penalty and interest.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has not been
shown which would justify a waiver of the interest or penalty associated with
the XXXXX and XXXXX tax years. It is so
ordered.
DATED
this 15th day of July, 1991.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
ABSENT
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco S.
Blaine Willes
Commissioner Commissioner