91-0922 - Corporation Franchise




In Re: )


XXXXX ) Appeal No. 91-0922

: Account No. XXXXX



This matter came before the Utah State Tax Commission pursuant to the Administrative Procedures Act and the rules of the Utah State Tax Commission for informal proceedings. No hearing was requested, therefore, this decision is based upon information contained in the Tax Commission's file.


1. The tax in question is corporate franchise tax.

2. The periods in question are XXXXX, XXXXX and XXXXX.

3. With respect to XXXXX, Petitioner's tax return was due by XXXXX. Petitioner filed a timely request for extension of the filing deadline and paid the required tax. With the extension, Petitioner's return was due on XXXXX. However, the return was not filed until XXXXX. A $$$$$ late filing penalty was therefore assessed against Petitioner.

4. For the XXXXX tax year, Petitioner again requested an extension and paid the tax. The return was due on XXXXX but was not filed until XXXXX. Another $$$$$ late filing penalty was assessed against Petitioner.

5. Petitioner's tax return for XXXXX was due on XXXXX. Petitioner neither requested an extension nor paid the tax due by the filing deadline. A late filing and late payment penalty of $$$$$ each were therefore assessed against Petitioner. Petitioner filed its return on XXXXX, and paid the tax on XXXXX.

6. The Petitioner's failure to file its corporate tax returns within the time allowed by law was due to financial difficulties that forced Petitioner to reduce its staff. After the reductions, it had insufficient staff to prepare and submit the returns in a timely manner. Ultimately, these financial difficulties forced Petitioner out of business.


Utah law imposes a penalty of either $50 or 10% of the tax, whichever is larger, for late filing of a tax-due return. An equal penalty is imposed 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).)

In the present case, Petitioner seeks waiver of penalties that were imposed due to Petitioner's failure to comply with the filing and payment requirements of the corporate franchise tax law. While Petitioner's financial difficulties are recognized by the Commission, such difficulties do not constitute reasonable cause for the Petitioner to neglect its obligation to file required tax returns and pay such tax as is due. The Tax Commission finds sufficient cause does not exist to waive the penalty associated with the Petitioner's corporate franchise tax for the tax periods XXXXX, XXXXX and XXXXX. It is so ordered.

DATED this 28 day of May, 1991.


R. H. Hansen Roger O. Tew

Chairman Commissioner

Joe B. Pacheco G. Blaine Davis

Commissioner Commissioner