92-0372 - Income



In Re: )






) Appeal No. 92-0372

: Account No. XXXXX



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. XXXXX represented himself. XXXXX, Assistant Utah Attorney General, was present and represented the Auditing Division.

Based upon the evidence and testimony presented at the hearing, the Tax Commission hereby makes its:


1. The tax in question is individual income.

2. The period in question is the year XXXXX.

3. Petitioners admittedly filed their XXXXX state personal income tax return late and also paid the amount owed late.

4. As a result, the Tax Commission assessed Petitioners a ten percent late filing penalty and a ten percent late payment penalty, plus interest.

5. At issue is the date that Petitioners actually filed and paid their XXXXX taxes.

6. XXXXX states that he filed and included payment for his XXXXX taxes in XXXXX. He supports his position with a photocopy of a check carbon, showing check #XXXXX payable to the Tax Commission for $$$$$ for XXXXX taxes.

7. Further, XXXXX provided a copy of his XXXXX return dated XXXXX.

8. Additionally, XXXXX submitted a copy of his bank statement showing the check number sequence in XXXXX. Checks numbered XXXXX, XXXXX, and XXXXX are listed.

9. XXXXX maintains that his check #XXXXX was never presented to his bank for payment.

10. It is interesting to note that according to Petitioners' bank account balance in XXXXX and XXXXX, Petitioners never had sufficient funds in the bank that would enable check #XXXXX to the Tax Commission to clear.

11. The Auditing Division records show that in XXXXX the Tax Commission learned through the Internal Revenue Service that Petitioners did have income in XXXXX. At that time, the Tax Commission concluded that Petitioners did not file a XXXXX personal income tax return, nor did they make payment.

12. Based upon information from the I.R.S., the Tax Commission calculated Petitioners' Utah taxes and determined they owed $$$$$ for XXXXX. The two ten percent penalties were assessed after withholding credits were applied, plus interest.

13. As soon as the Tax Commission contacted Petitioners, they paid the outstanding balance.

14. XXXXX testified that he had always paid and filed his personal income taxes on time prior to XXXXX. In XXXXX, he was laid off from the XXXXX and had to take out his retirement to make ends meet. During this time, XXXXX became immersed in doing all that he could to survive financially. He did not balance his checking account at times and did not notice the absence of the check to the Tax Commission.

15. Petitioners timely filed and paid their XXXXX and XXXXX taxes; their XXXXX personal income taxes were late.

16. Petitioners claim that the Tax Commission should have notified them sooner of the XXXXX tax delinquency. The time between XXXXX and XXXXX is costly to them, especially as it relates to interest.


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 two ten percent negligence penalties assessed for lateness in filing and payment are justified for the simple fact that Petitioners did ignore their obligation to file and pay when required to do so. Other demands may have been upon them for other reasons, but they do not excuse the failure to act. Even if the Tax Commission accepted Petitioners claim that they filed only two years late as opposed to fours years as the Auditing Division asserts, two years is negligence. Petitioners had no problems filing and paying the intervening years of XXXXX and XXXXX on time.

Petitioners' assertion that they did file and pay their XXXXX taxes in XXXXX is not persuasive, especially in the light of the fact that Petitioners' bank account never had the funds to cover the check. It may well have been the case that Petitioners intended to file and make payment, but they have not met their burden of proof to show that they did.

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 assessed for the year XXXXX. It is so ordered.

DATED this 12th day of November, 1992.



R. H. Hansen Roger O. Tew

Chairman Commissioner

Joe B. Pacheco S. Blaine Willes

Commissioner Commissioner