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
ABSENT
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco S.
Blaine Willes*
Commissioner Commissioner