BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
In Re: )
: INFORMAL
DECISION
XXXXX ) Appeal No. 91-0537
: 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 sales tax.
2. The periods in question are the fourth
quarter of XXXXX, and the second, third and fourth quarters of XXXXX.
3. During XXXXX, XXXXX began operating XXXXX
Services. XXXXX had recently immigrated
to the United States from XXXXX and was unfamiliar with federal and state tax
laws. He therefore employed a local tax
preparation service to obtain the necessary tax accounts and to explain his tax
obligations to him. As part of that
process, XXXXX obtained a sales tax account with the Utah State Tax Commission.
4. Despite his efforts to fulfill his tax
obligations, XXXXX was confused about the requirements for filing sales tax
returns. As a result, his sales tax
return for the fourth quarter of XXXXX, due on XXXXX, was not filed until
XXXXX. When filed, it was accompanied
by full payment of the tax due. XXXXX
was also late in filing his sales tax returns for the second, third and fourth
quarters of XXXXX. In each case, the
return was filed approximately two months late and was accompanied by full
payment of the tax liability shown on the return.
5. With respect to each of the quarterly sales
tax returns in question, XXXXX was assessed a 10% late filing penalty. Added together, the penalties total $$$$$.
6. After XXXXX discovered that he had failed to
file his sales tax returns on time, he discontinued the services of his
original accounting service and obtained other professional assistance. The business was then incorporated as XXXXX.
Since then, all sales tax returns have been filed on time, with full payment of
all tax liability.
7. In XXXXX, the Petitioner sent a letter to
Commission staff seeking relief from the penalties imposed in this matter. Petitioner was informally advised that the
penalties would be abated. No further
communication was received on the subject until four years later, when
Petitioner received a telephone call from Commission staff. Petitioner was asked to submit a copy of its
previous letter, which it did. The gap
in communication between Commission staff and Petitioner may have been due to
Petitioner's incorporation and name change.
CONCLUSIONS OF LAW
Utah
law authorizes imposition of a 10% penalty for late filing of a tax-due
return. (Utah Code Ann. §59-1-401(1).)
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-l-401(8).)
DECISION AND ORDER
The
record in this matter establishes that the Petitioner began business operations
in Utah without experience in American tax practices. He sought professional assistance in complying with tax
requirements, but still failed to understand the filing requirements of Utah's
sales tax law. Petitioner's misunderstanding led to late filing for the first
few quarters his business was in operation.
However, when the Petitioner comprehended the nature of the problem, he
obtained the professional assistance necessary to resolve the matter. Since that time, his record of compliance
with the sales tax requirements has been spotless.
In
view of the foregoing, the Commission concludes the Petitioner has made a
conscientious effort to comply with the provisions of Utah's sales tax
law. Under these circumstances, the Tax
Commission finds sufficient cause exists to waive the penalty associated with
the Petitioner's sales tax liability for the fourth quarter of XXXXX, and the
second, third and fourth quarters of XXXXX.
Interest assessed with respect to those periods is not waived, but will
be recomputed in accordance with this decision. It is so ordered.
DATED
this 31 day of May, 1991.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner