BEFORE THE UTAH STATE TAX
COMMISSION
In Re: :
XXXXX ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
: AND FINAL
DECISION
: Appeal No.
91-1311
: 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 Petitioner was
XXXXX, attorney at law, with XXXXX and XXXXX.
Based
upon the evidence and testimony presented at the hearing, the Tax Commission
hereby makes its:
FINDINGS OF FACT
1. Petitioner seeks waiver of penalty assessed
against it with respect to its XXXXX corporate franchise tax liability.
2. Prior to XXXXX, Petitioner and its parent
company, XXXXX both filed their respective corporate franchise tax returns on a
calendar year basis.
3. During XXXXX, Petitioner merged into XXXXX.
4. Both Petitioner and XXXXX federal returns
for XXXXX were due by XXXXX.
5. Petitioner filed a timely extension request
with the Commission, accompanied with a check in the amount of $$$$$, in payment
of its estimated tax liability.
Petitioner's application for extension was approved, establishing a new
due date of XXXXX.
6. On XXXXX, Petitioner filed its return,
accompanied with a check in the amount of $$$$$ in payment of its remaining ax
liability.
7. When Petitioner's return was received by
Commission staff, it was processed as a late return. A penalty of $$$$$ was assessed against Petitioner for that
reason.
8. Upon receipt of notice of penalty,
Petitioner's accounting firm, XXXXX, filed a request for waiver. In its request on behalf of Petitioner,
XXXXX explained that the Commission had previously granted an extension for
filing.
9. Pursuant to Commission practice, a
"XXXXX" was prepared by Commission staff which reported the reason
for Petitioner's request as "Taxpayer would like penalty waived because
XXXXX." No mention was made of the
fact that an extension had been properly requested and granted.
10. Based upon the incomplete information
contained in the waiver request, the waiver request was denied. Notice of the denial was not sent to
Petitioner's agent, XXXXX, but instead to Petitioner itself on XXXXX.
11. After the request for waiver was denied, no
further action was taken by the Commission until collection efforts were
commenced on XXXXX. Petitioner, which
had been unaware of any delinquency, requested an explanation of the
collection action and was advised that
the delinquency arose from the penalty discussed above. Petitioner resubmitted a request for waiver
of the penalty, but was orally advised that a second request for waiver would
not be entertained by the Commission.
Petitioner then filed this appeal.
CONCLUSIONS OF LAW
Any
party adversely affected by a Commission action may file a petition for agency
action. Such a petition shall be filed
within 30 days of the date of the notice of the Commission action. (See Utah Administrative Code R861-1A-4).
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
At
first blush, it appears Petitioner failed to file a timely appeal in XXXXX of
the denial of its request for penalty waiver.
However, notice of that denial was not mailed to Petitioner's designated
agent, but instead was mailed to Petitioner itself. No further action was taken by Commission staff for several
years. Consequently, Petitioner's agent
did not know an appeal was necessary, Petitioner assumed its agent was handling
the matter, and neither Petitioner nor its agent had cause to discover the
truth until much later. Under these
circumstances, the Commission concluded that the period for filing an appeal in
this matter did not begin until Petitioner became aware of the waiver denial in
early XXXXX. The Commission therefore
finds Petitioner's appeal to be timely, and will consider the merits of that
appeal.
The
record clearly establishes that Petitioner was unable to file its XXXXX
corporate franchise tax by XXXXX due to its merger with another company. The record is also clear that Petitioner
properly obtained an extension of the normal filing deadline, then filed and
paid its tax liability within the extension period. Under these circumstances, penalty was improperly assessed
against Petitioner. The commission
hereby waives the penalty assessed against Petitioner with respect to its XXXXX
corporate franchise tax. It is so
ordered.
DATED
this 7 day of October, 1992.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
ABSENT
Joe B.
Pacheco S.
Blaine Willes
Commissioner Commissioner