92-0368 - Corporate Franchise

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

In Re: )

:

XXXXX, ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

) AND FINAL DECISION

:

) Appeal No. 92-0368

: 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. Petitioner was represented by XXXXX by telephone.

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 corporate franchise tax.

2. The years in question are XXXXX and XXXXX.

3. Petitioner filed and paid its corporate franchise tax for the year ending XXXXX on XXXXX, nearly four months late.

4. Petitioner filed and paid the same tax for the year ending XXXXX on XXXXX, nearly five months late.

5. For each period, Petitioner owed the minimum tax of $$$$$.

6. The Tax Commission assessed Petitioner two $$$$$ penalties for late payment and late filing for each quarter in question. Petitioner's owner acknowledged he began receiving penalty notices for the periods in question in XXXXX.

7. Tax Commission records show that late notices were sent in XXXXX.

8. Owner XXXXX Testified that the company was involved in a $$$$$ breach of contract lawsuit in XXXXX that caused financial hardship over the succeeding years.

9. Internal Revenue Service audits resulted in further problems. When federal taxes were paid, the I.R.S. waived a portion of the penalties.

10. In addition to the financial hardship, Petitioner asserts that the penalties should be waived because he believes that the three year statute of limitations has run on this case.

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

Both Petitioner and the Tax Commission agree that Petitioner was notified of the tax deficiencies for the years in question within three years of the franchise tax filing deadlines. Under these facts, there is no viable statute of limitations defense. The penalties were assessed on the dates Petitioner filed the returns; the Commission notified Petitioner of the deficiencies within three years.

In light of all of the circumstances of this case, the Tax Commission finds that sufficient cause has not been shown which would justify a waiver of the penalties in question for the years XXXXX and XXXXX. Interest is not waived. It is so ordered.

DATED this 7th day of January, 1993.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

R. H. Hansen Roger O. Tew

Chairman Commissioner

Joe B. Pacheco S. Blaine Willes

Commissioner Commissioner