BEFORE THE UTAH STATE TAX
COMMISSION
____________________________
In Re: )
:
: FINDINGS
OF FACT,
XXXXX : CONCLUSIONS OF LAW,
: AND FINAL
DECISION
: Appeal No.
91-1179
_____________________________________
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 by telephone and representing the
Petitioner was XXXXX, Petitioner's Vice President.
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 withholding tax.
2. The periods in question are XXXXX and XXXXX;
and XXXXX and XXXXX.
3. For several years prior to the periods in
question, Petitioner relied upon an experienced employee to prepare and file
its withholding tax returns. Beginning
with the withholding tax return for XXXXX, the employee began to sporadically
miss filing deadlines. As a result, the
commission imposed a 10% late filing penalty and an additional 10% late payment
penalty against Petitioner's withholding tax liability for XXXXX. A 10% late
filing penalty was imposed against Petitioner's withholding tax liability for
XXXXX. However, because the same
employee who failed to file the returns also received the notices of penalty,
Petitioner was not advised of the problem.
During early XXXXX, Petitioner finally discovered that penalty and
interest had been assessed with respect to its withholding tax liability. The Petitioner then took measures to insure
that future withholding tax returns were filed and paid in a timely
manner. There have been no further
delinquent withholding tax returns since that time.
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
Petitioner's
failure to file and pay withholding tax in a timely manner is due to the
negligence of one of Petitioner's employees.
Because the employee had previously demonstrated the ability to file the
required returns, Petitioner relied upon her to continue to perform that
duty. When the employee failed to make
the required filings she withheld that information from the Petitioner, thereby
preventing corrective action until after penalties had been imposed for the
periods now in question.
Because
an employer has a duty to supervise and monitor its employees in the
performance of their work, the foregoing circumstances do not constitute a
sufficient basis to completely waive the penalties which have been assessed
against Petitioner. However, they do
tend to instigate Petitioner's responsibility for the late filing and payment
of the returns in question. Furthermore, Petitioner has corrected the problem
and is now filing and paying its withholding taxes on time.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has been
shown which would justify a reduction of the penalty associated with the
Petitioner's withholding tax liability for XXXXX to 10%. The penalty previously imposed with respect
to XXXXX will remain unchanged. Interest
is not waived but will be recomputed in accordance with this decision. It is so ordered.
DATED
this 20th 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