BEFORE THE UTAH STATE TAX
COMMISSION
____________________________
In Re: )
:
XXXXX ) FINDINGS
OF FACT,
: CONCLUSIONS
OF LAW,
: AND FINAL
DECISION
:
: Appeal
Nos. 91-1366 &
: 91-1367
_______________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a formal hearing by
telephone on XXXXX. Lisa L. Olpin,
Presiding Officer, heard the matter for and on behalf of the Commission. Present and representing the Petitioner was
XXXXX, and XXXXX, manager of corporate taxes, both of 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 sales and use tax.
2. The two periods in question are (1) XXXXX
through XXXXX and (2) XXXXX through XXXXX.
3. In XXXXX, XXXXX, a XXXXX, bought XXXXX of
Utah. XXXXX was a XXXXX company.
4. Later, XXXXX changed XXXXX name to XXXXX
Corporation.
5. When XXXXX first purchased XXXXX, it
retained the same staff of employees.
6. In late XXXXX or early XXXXX, the office
manager of XXXXX left. A new office
manager from the XXXXX office took over.
He was not knowledgeable of Utah tax laws.
7. XXXXX sent directives to XXXXX regarding the
proper tax procedures to follow. XXXXX
felt confident in their Salt Lake City staff to meet those criteria.
8. XXXXX conducted internal audits of itself.
Everything always appeared to be in order.
XXXXX never checked over the audits or the audit procedures.
9. In XXXXX, XXXXX sold XXXXX.
10. Later, the Tax Commission audited XXXXX and
found two periods wherein sales and use tax were outstanding.
11. For the period of XXXXX through XXXXX, XXXXX
failed to file and to pay sales tax in the amount of $$$$$. A penalty in the amount of $$$$$ was
assessed, plus interest.
12. For the period of XXXXX through XXXXX, XXXXX
failed to file and to pay sales tax in the amount of $$$$$. A penalty in the amount of $$$$$ was
assessed, plus interest.
13. XXXXX filed its returns and paid its
delinquent taxes for the periods in question on XXXXX.
14. Poor record keeping and a misunderstanding
of the law are the reasons why the returns and payments were never made.
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
Tax Commission understands that Petitioner did not purposely try to avoid
paying taxes; however, the circumstances of this case do not describe a
situation where a waiver of the penalty is appropriate.
Here,
it is clear that Petitioner had the responsibility to oversee the financial
affairs of XXXXX. Sending communiques
and memos regarding financial obligations was an attempt to meet this
responsibility, however, it was ineffective and incomprehensive. Leaving the task to lesser employees was
Petitioner's choice that has resulted in tax penalties. The consequences of electing to do business
in this manner falls on Petitioner.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has not been
shown which would justify a waiver of the penalty associated with the two
periods in question. It is so ordered.
DATED
this 22nd day of January, 1992.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
ABSENT
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco S.
Blaine Willes
Commissioner Commissioner