BEFORE THE UTAH STATE TAX
COMMISSION
___________________________
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
XXXXX ) AND FINAL DECISION
:
: Appeal No.
91-0816
: 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 Petitioners was 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 individual income tax.
2.
The period in question is XXXXX.
3.
During XXXXX, Petitioner XXXXX was transferred by his employer from XXXXX to
Utah. In connection with the transfer, he received substantial expense
reimbursements from his employer. Also as a result of the transfer, Petitioners
sold their home in XXXXX.
4.
In filing their XXXXX income tax returns, Petitioners were required to elect
whether to take the one time capital gain exclusion on the sale of their home
in XXXXX. In order to have time to further consider that question, they
requested extensions of their state and federal income tax filing deadlines.
5.
Petitioners filed their state and federal income tax returns on XXXXX. In
completing the returns, they determined they were entitled to a deduction for
only $$$$$ out of $$$$$ received as moving expense reimbursement, with the
remaining $$$$$ reportable as income. Their state income tax liability was
$$$$$, of which $$$$$ had previously been withheld from income, leaving tax due
of $$$$$. Petitioners paid the remaining tax with their return.
6.
Because Petitioners had not paid at least 90% of their total state income tax
liability at the time they requested their extension, an extension penalty of
$$$$$ was assessed against them. Subsequently, an additional $$$$$ late payment
penalty was also assessed against them.
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
Utah
Code Ann. §59-10-516 permits a taxpayer an extension of up to 6 months for
filing an income tax return, provided the request for extension is accompanied
by payment of the lesser of either (a) 90% of the tax due, or (b) the total
amount of tax paid for the previous year. In the present case, Petitioners were
first time filers in Utah, and were therefore unable to take advantage of test
(b), above. Likewise, due to circumstances surrounding their transfer to Utah
and the sale of their home in XXXXX, they were unable to ascertain the amount
of their ultimate state income tax liability. Even in the face of the foregoing
difficulties, Petitioners actually paid 80% of their ultimate tax liability
through withholding.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has been
shown which would justify a waiver of the penalty associated with Petitioners
XXXXX individual income tax liability. Their request for waiver is therefore granted.
Petitioners' request for waiver of interest is denied. It is so ordered.
Dated
this 24th day of October, 1991.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco S.
Blaine Willes*
Commissioner Commissioner