BEFORE THE UTAH STATE TAX
COMMISSION
___________________________
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
XXXXX ) AND FINAL DECISION
: Appeal No.
91-0463
: 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. The Petitioner appeared on his own behalf.
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, the Petitioner
obtained a six month extension for filing his individual income tax return,
which would otherwise have been due on XXXXX.
He did not file his return until XXXXX, XXXXX after the extension
expired. When filed, the return
established a tax liability of $$$$$ which was reduced by credits of $$$$$,
leaving a balance due of $$$$$.
Extension late filing and late payment penalties of $$$$$ were assessed
against the Petitioner, as were interest charges. The Petitioner has paid $$$$$ toward his liability, leaving $$$$$
attributable to penalty and interest unpaid.
5. With respect to XXXXX, the Petitioner
obtained a six month extension for filing his income tax return. The return, filed within the extension
period, established his tax liability of $$$$$, less withholding credits of
$$$$$, leaving a balance of $$$$$. Late
filing and late payment penalties of $$$$$ each were assessed against the Petitioner,
as were interest charges. The
Petitioner has paid $$$$$ toward his liability, leaving $$$$$ attributable to
penalty and interest unpaid.
6. The Petitioner's wages have been attached
for child support purposes. He also
owes a substantial tax liability to the federal government.
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 law also imposes a penalty of 2% per month of the unpaid tax
if an extension is not accompanied by payment of at least 80% of the tax due,
or alternatively, the total amount of tax due for the prior year. (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 assessed against his XXXXX and
XXXXX income tax liability. The
Petitioner concedes he failed to timely file his return for XXXXX, and also
failed to make timely payment of his tax liability for XXXXX and XXXXX. However, he cites his financial
circumstances as a basis for waiver of penalty.
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. A taxpayer's failure to reserve sufficient
funds to pay income tax liability when that liability comes due does not
constitute ordinary care and prudence.
The Commission therefore holds that the Petitioner has not established
reasonable cause for his late payment of the tax in question.
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