BEFORE THE UTAH STATE TAX
COMMISSION
__________________________
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
XXXXX ) AND FINAL DECISION
: Appeal No.
91-0465
: 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 period in question is XXXXX.
3. The Petitioner filed his individual income
tax return for XXXXX in a timely manner, thereby establishing his tax liability
of $$$$$. The liability was reduced to
$$$$$ by a $$$$$ credit for taxes previously withheld.
4. The Petitioner was unemployed at the time
his XXXXX tax liability came due. He
had also suffered reverses in various business endeavors. As a result, he could neither pay nor borrow
funds to satisfy his tax liability.
5. The Petitioner subsequently agreed to pay
his tax liability on an installment basis.
The Petitioner was able to pay his entire tax liability and associated
interest by XXXXX, earlier than required by his installment payment agreement.
6. The Petitioner has been assessed a penalty
of $$$$$ for late payment of the XXXXX tax liability.
CONCLUSIONS OF LAW
Utah
law authorizes imposition of a 10% penalty 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 10% late payment penalty assessed against his
XXXXX income tax liability. The
Petitioner concedes he failed to make timely payment of his tax liability for
that year. However, he cites his
financial circumstances at the time the tax was due and his subsequent success
in paying the tax 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 penalty associated with the XXXXX tax
year. 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