91-1377 - Withholding Tax

 

BEFORE THE UTAH STATE TAX COMMISSION

______________________________

In Re: ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

XXXXX ) AND FINAL DECISION

:

: Appeal No. 91-1377

: Account No. XXXXX

____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. The matter had been set for a telephone hearing the previous day, but Petitioner called one day later and stated that he had not timely received the notice of telephone conference. The matter had previously been set for a formal hearing, but the Petitioner requested that it be heard on the telephone and assumed that it would be set for a different day. Nevertheless, when Petitioner called on the telephone, the telephone hearing was conducted as though it were set for that time. XXXXX, Presiding Officer, heard the matter for and on behalf of the Commission. Present and representing the Petitioner on the telephone was 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 employee withholding.

2. The period in question is the month of XXXXX.

3. Petitioner represented that the return was timely filed and a check was enclosed therewith for payment. He represented that the check was prepared on XXXXX, and was mailed on or before XXXXX. The return was due on XXXXX.

4. The return was timely received at the Commission, but the check was never received, cashed or credited.

5. Petitioner represents that at all times it had sufficient funds in the bank to clear this check, and that checks are not written out of sequence and that the check was in fact prepared on XXXXX.

6. When inquiry was made as to why Petitioner let the check show on its outstanding check list for over two and one half years without contacting the Tax Commission, Petitioner responded that it is because of the volume of checks handled by Petitioner, and that they always have a large number of checks outstanding.

7. In Petitioner's request for waiver, it was represented that the amount was recently added back to their cash account. Thus, inquiry was made as to why it was added back into their cash account rather than checking with the Tax Commission to determine why it had never been cleared. Petitioner was not sure, but believed that it was not added back to the cash account until after contact was made by the Tax Commission and a new check had been written to cover said amount.

8. Petitioner also represented that they have a spotless record other than this one occurrence, and they have never previously been late or delinquent in any way on the filing or payment of any of their tax returns.

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 does have a very good record regarding timely filing and payment of their tax returns, and based upon the representation of Petitioner's accountant that the company had sufficient funds to pay the tax, the check was timely prepared, and that its failure to clear the bank is unexplained, the Commission would normally waive the penalty in such a situation. However, because Petitioner let the outstanding check sit on its bank reconciliation for approximately two and one half years without making inquiry as to why the check had not cleared the bank without at least making some contact with the Tax Commission to try to follow up on said check, the Commission determines that Petitioner was not diligent in fulfilling its responsibilities once the check did not clear the bank and that the penalty imposed should not be waived.

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 XXXXX employee withholding tax return. 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

Chairman Commissioner

Joe B. Pacheco S. Blaine Willes

Commissioner Commissioner