BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
XXXXX ) AND FINAL DECISION
:
) Appeal No.
92-0077
: Account
No. XXXXX
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a formal hearing on
XXXXX. Lisa L. Olpin, Presiding
Officer, heard the matter for and on behalf of the Commission. Present and representing the Petitioner were
XXXXX, attorney at law, and XXXXX, president of XXXXX.
Present
and representing the Collection Division were XXXXX, a tax compliance agent and
XXXXX, a tax compliance supervisor.
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 periods in question are all of the
quarters between XXXXX and XXXXX, excepting the first and third quarters of
XXXXX.
3. For all periods in question, Petitioner filed
and paid its sales and use taxes late.
4. Penalties and interest were assessed,
totalling approximately $$$$$ and $$$$$ respectively.
5. XXXXX, a tax compliance agent, was assigned
to Petitioner's account in XXXXX.
6. She met with XXXXX and set up a payment
schedule with him to help bring the account current.
7. She told XXXXX that he would need to pay the
taxes before he could seek relief on the penalties and interest
assessments. She told XXXXX that after
the taxes were paid XXXXX could initiate the waiver process by writing a letter
to the Tax Commission requesting a waiver of the penalties and interest.
8. XXXXX began paying his back taxes.
9. On or about XXXXX, XXXXX, his certified
public accountant, and XXXXX met. At
this meeting, XXXXX gave XXXXX a check in the amount of approximately $$$$$
that would bring him current on his taxes.
10. At this time, XXXXX gave XXXXX a letter
written on his accountant's letterhead addressed to the Utah State Tax
Commission and signed by his accountant.
In the letter, XXXXX listed five reasons why Petitioner was late in
paying its sales and use taxes. (See
Exhibit 1)
11. Also stated in the letter, it reads "we
ask that you waive all penalties and the balance of any interest owing".
12. XXXXX never specifically told XXXXX that the
penalties would be waived. She told him something to the effect that she
thought he had valid reasons on which a waiver of the penalties could be
based. She further stated that she
hoped he would be granted his waiver request.
XXXXX told him that it was very unlikely that the interest would be
waived.
13. XXXXX knew that XXXXX did not have the
authority to waive penalty and interest assessments, but that the request would
need to be processed and submitted to someone else. Further, XXXXX admitted that he and XXXXX were not 100% sure that
the waiver request would be granted.
14. XXXXX did not pay his taxes based upon any
representation by XXXXX that if he did pay, the penalties would then be waived.
15. After talking about the contents of the
letter with XXXXX, XXXXX believed that the penalties would be waived.
16. The five reasons why Petitioner did not pay
its sales and use taxes are:
a. In XXXXX, Petitioner moved to a new
location, necessitating a cessation in business.
b. XXXXX and his business partner broke up and
a lawsuit ensued.
c. XXXXX's father was hospitalized for several
weeks.
d. Petitioner's store was robbed of merchandise
in XXXXX. A lawsuit with the insurance company left Petitioner with a $$$$$
settlement.
e. The ski industry is suffering in this
recessionary period.
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
While
Petitioner lists five reasons in its letter explaining why it failed to file
and pay its sales and use taxes, Petitioner expended its efforts in the hearing
discussing how XXXXX arrived at the understanding that the penalties would be
waived.
Based
on the testimony and evidence presented, Petitioner voluntarily paid its past
due taxes. Tax compliance agent XXXXX
did not represent to XXXXX that the penalties would be abated on condition that
he pay the tax amounts owing.
Procedurally, Petitioner followed the steps outlined by XXXXX in paying
its taxes and initiating the waiver process.
XXXXX's conclusion that the penalties would be waived is a result of his
own assumptions for XXXXX never represented to him that the penalties would be
automatically waived at some point.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has not been
shown which would justify a waiver of the penalties and interest associated
with the quarters in question. It is so
ordered.
DATED
this 11th day of May, 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