BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
: AND FINAL
DECISION
: Appeal No.
91-1067
: 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 were XXXXX and 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. The Petitioners filed their XXXXX individual
income tax return in a timely fashion.
Thereafter, an audit by the Internal Revenue Service increased their
taxable income for that year, with a corresponding increase in their federal
income tax.
4. Although the Petitioners were aware of the
increase in income resulting from the federal audit of their XXXXX income tax
return, they did not file an amended income tax return with the state of Utah
for that year. Neither party was aware
of their obligation to do so. The Internal
Revenue Service subsequently advised the Tax Commission of the results of its
audit of Petitioners' XXXXX return.
Commission staff then adjusted the Petitioners' XXXXX state income tax
return accordingly. As a result,
Petitioners' state income tax increased by $$$$$.
5. Commission records indicate that notice of
the additional tax liability was sent to Petitioners. However, the address used may have been incomplete. Furthermore, Petitioners had divorced and
only one of them continued to live at the address used by the Commission. The Petitioners did not receive the
Commission's notices until XXXXX.
Petitioner XXXXX then responded with payment of the tax due.
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
The
Petitioners ask the Commission to waive late payment penalties imposed with respect
to their XXXXX tax liability, which liability arises from a federal audit of
their income tax return for that year.
The Petitioners concede they were aware that the federal audit had
increased their taxable income for the year in question. However, Petitioners failed to file an
amended income tax return to advise the Commission of their additional
income. Utah Code Ann. §59-10-536(5)
requires that taxpayers report any change in their federal net income to the
Tax Commission within 90 days. It was
Petitioners' failure to report the increase in their XXXXX net income which led
to the imposition of penalty against them.
Had Petitioners amended their state tax return, as required by law, no
such penalty would have been imposed.
While the Petitioners may not have received notice that a penalty had
been imposed, the lack of notice did not cause the imposition of the penalty.
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 Petitioners' XXXXX individual income tax liability. It is so ordered.
DATED
this 3rd day of December, 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