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
Joe B. Pacheco S. Blaine Willes