BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
In Re: ) FINDINGS OF FACT
:
)
XXXXX : CONCLUSIONS OF LAW
) AND FINAL
DECISION
:
) Appeal No.
92-0074
: 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. XXXXX, C.P.A., represented Petitioner by telephone. XXXXX, Assistant Utah Attorney General,
represented the Auditing Division of the Utah State Tax Commission.
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 tax.
2. The period in question is XXXXX through
XXXXX.
3. As a result of an audit for the period in
question, the Auditing Division assessed Petitioner with additional sales tax
of $$$$$, a 10% negligence penalty, and interest. Petitioner appeals only the assessment of penalty and interest.
4. Approximately $$$$$ of the additional tax
assessed against Petitioner arises from a bookkeeping error for the second
quarter of XXXXX. An improper credit on
Petitioner's "sales tax payable" account understated Petitioner's
sales tax liability. The error was not
discovered until the Auditing Division's audit.
As
a result of the error, funds collected as sales tax remained in Petitioner's
possession.
5. Upon notification of the foregoing error,
Petitioner paid the improperly retained sales tax funds to the Commission,
together with interest at the rate earned in Petitioner's bank account.
6. A prior audit for the period of XXXXX
through XXXXX resulted in assessment of additional tax of $$$$$, a 10%
negligence penalty, and interest.
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
only issue before the Commission is Petitioner's request that penalty and
interest assessed against it be waived.
In
support of its request, Petitioner argues it has attempted in good faith to
comply with sales tax requirements.
Petitioner further argues that it was an inadvertent mistake, rather
than any intent to evade tax, that caused the underpayment of tax in this case.
Petitioner's
error may have been committed innocently.
However, the size of the error, the lack of sufficient supervision to
prevent such an error, and the fact that a prior audit also disclosed unpaid
sales tax liability justify assessment of a 10% negligence penalty.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has not been
shown which would justify a waiver of the penalty and interest associated with
Petitioner's sales tax liability for the period of XXXXX through XXXXX. It is so ordered.
DATED
this 6th day of August, 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