BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
In Re: )
: INFORMAL
DECISION
XXXXX ) Appeal No. 91-0922
: Account
No. XXXXX
_____________________________________
STATEMENT OF CASE
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.
FINDINGS
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.
DECISION AND ORDER
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.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner