BEFORE THE UTAH STATE TAX COMMISSION
In Re: )
XXXXX ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
: AND FINAL DECISION
: Appeal No. 91-1281
STATEMENT OF CASE
This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. G. Blaine Davis, Administrative Law Judge, Presiding Officer, heard the matter for and on behalf of the Commission. At the time set for hearing, no one appeared or represented the Petitioner, and an Order of Default was prepared. However, prior to the time the Order of Default was sent, Petitioner contacted the Administrative Law Judge by telephone and apologized for not appearing, but represented he had not seen the notice prior to the date set for hearing, because he had been out of town. The notice had been sent two weeks prior to the date set for hearing, but the time did include the XXXXX weekend and one other weekend. The case was discussed over the telephone and thereafter other phone calls took place between XXXXX and XXXXX to discuss the case. It was ultimately agreed that the case would be heard as a telephone hearing and a decision would be made upon the merits of the case.
Based upon the evidence and testimony presented over the telephone, the Tax Commission hereby makes its:
FINDINGS OF FACT
1. The tax in question is payroll withholding tax.
2. The periods in question are the second, third and fourth quarters of XXXXX.
3. XXXXX was a company owned by XXXXX and XXXXX.
4. XXXXX and XXXXX terminated their business relationship, and XXXXX agreed to continue the business, but it was on a very minimal basis.
5. The company last had employees on XXXXX.
6. The withholding return for the second quarter of XXXXX was filed 45 days late.
7. The return for the third quarter XXXXX was not filed until XXXXX, and the return for the fourth quarter XXXXX was also filed on XXXXX.
8. The notices for the delinquencies were being sent to XXXXX. XXXXX, remained in charge of the business and did not receive the notices being sent from the Tax Commission. However, the returns for the second and third quarter XXXXX were already substantially delinquent before XXXXX and XXXXX severed their business relationship.
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 returns on which the penalty has been assessed were already delinquent prior to the time the parties severed their business relationship, and the penalty had already been incurred prior to the time the parties severed their relationship. Therefore, the fact that the notices were sent to the withdrawing owner did not cause the penalty to be incurred.
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 withholding return for the second, third and fourth quarters of XXXXX. It is so ordered.
DATED this 6th day of December, 1991.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco S. Blaine Willes