BEFORE THE UTAH STATE TAX COMMISSION
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
XXXXX ) AND FINAL DECISION
) Appeal No. 91‑0719
: Account No. XXXXX
STATEMENT OF CASE
This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. Paul F. Iwasaki, Presiding Officer, heard the matter for and on behalf of the Commission. Present and representing the Petitioner was Dennis Heaton.
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 period in question is the third quarter of XXXXX.
3. XXXXX has two subsidiaries, each of which pay their portion of sales tax through XXXXX. Those two subsidiaries are XXXXX and XXXXX.
4. For the period in question, the manager of XXXXX wrote out a check on XXXXX account to cover its proportionate share of sales tax for that period. The manager of XXXXX informed the Petitioner that the check might not clear because of insufficient funds in the account. That check was drawn on an account held with XXXXX.
5. Because of the possible problem with the check clearing, the Petitioner's representative testified that he talked to an official at XXXXX. The Petitioner's representative testified that he had made an agreement with the bank official that if the check drawn on the XXXXX account had trouble clearing, funds from the XXXXX account would be transferred to cover the possible overdraft. Sufficient funds existed in the XXXXX account to cover the XXXXX account's check.
6. The check drawn on the XXXXX account was presented for payment and payment was refused due to insufficient funds.
7. The Petitioner was not aware of the refusal until XXXXX.
8. A letter dated XXXXX, from an official with XXXXX neither verified nor disputed the Petitioner's representative's testimony that a transfer of funds agreement had been worked out with the bank concerning the check in question.
CONCLUSIONS OF LAW
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
In the present case, the Petitioner's representative maintained that the failure of the bank to transfer funds from one account to cover the overdraft in another, led to the dishonorment of the check offered as payment for the sales tax due. It is based upon that fact that the Petitioner's representative requests a waiver of the penalty and interest associated with the period in question.
Although the bank may have acted contrary to the agreement it had with the Petitioner, nevertheless, the Petitioner had the opportunity to ensure that adequate funds were in the checking account in question, yet consciously chose not to do so simply as a matter of convenience. By so choosing, the Petitioner acts at its own peril and is responsible for the foreseeable consequences that arise when, as in this case, the bank fails to act in the manner to which it may have agreed.
Based upon the foregoing, the Tax Commission finds that sufficient cause has not been shown which would justify a waiver of the penalty or interest associated with the third quarter XXXXX sales tax. It is so ordered.
DATED this 15th day of August, 1991.
BY ORDER OF THE UTAH STATE TAX COMMISSION
R. H. Hansen Roger O. Tew
Joe B. Pacheco S. Blaine Willes*
NOTICE: You have twenty (20) days after the date of the final order to file a request for reconsideration or thirty (30) days after the date of final order to file in Supreme Court a petition for judicial review. Utah Code Ann. ''63‑46b‑13(1), 63‑46b‑14(2)(a).
*Since the hearing on this case, Commissioner G. Blaine Davis has been replaced by S. Blaine Willes. Commissioner Willes has been duly advised of the facts and circumstances regarding this case, and is qualified to sign this decision.