BEFORE THE UTAH STATE TAX
COMMISSION
______________________________
XXXXX )
Petitioner, : FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
v. : AND FINAL DECISION
AUDITING
DIVISION OF THE : Appeal No. 91-1576
UTAH STATE TAX COMMISSION, :
Respondent. :
___________________________________
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. Representing the Petitioner by telephone was
XXXXX, tax manager for Petitioner.
Present and representing the Respondent was XXXXX, Assistant Utah
Attorney General.
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 audit period in question is XXXXX
through XXXXX.
3. A sales and use tax assessment in the amount
of $$$$$ was assessed for the period in question.
4. An additional 15% penalty for intentional
disregard of a law or rule was assessed in the amount of $$$$$.
5. Petitioner had previously been audited for
the period of XXXXX. Sales and use tax
in the amount of $$$$$ was assessed as a result of this audit. No penalty was applied.
6. Both audits showed that Petitioner had a tax
error rate of approximately 24%.
7. In both audits, Petitioner had failed to pay
or accrue sales tax on all goods consumed and on all equipment purchases and
rentals.
8. Petitioner explained that the sales and use
tax is collected and reported at the individual job sites located in Utah
(between 10-30 locations).
9. Attempts to properly train personnel include
issuing annual bulletins from the XXXXX, XXXXX office and in-person training
every XXXXX years.
10. Petitioner claims that employee turnover
also has caused problems in its accounting abilities.
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).
The
penalty for underpayment of tax is as follows: (a) If any underpayment of tax
is due to negligence, the penalty is 10% of the underpayment. (b) If any underpayment of tax is due to
intentional disregard of law or rule, the penalty is 15% of the
underpayment. Utah Code Ann.
§59-1-401(3)(a)(b).
DECISION AND ORDER
The
evidence presented supports a finding that Petitioner was negligent in
maintaining proper accounting controls and procedures in the collection and
remittance of sales and use tax for the period in question. The facts do not support the contention that
Petitioner intentionally disregarded a law or rule.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has been
shown which would justify a reduction of the penalty from 15% to 10% for the
period in question. It is so ordered.
DATED
this 13 day of July, 1992.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco S.
Blaine Willes
Commissioner Commissioner