92-0992 - Withholding

BEFORE THE UTAH STATE TAX COMMISSION

_______________________________

XXXXX, )

:

Petitioner, ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

v. ) AND FINAL DECISION

:

AUDITING DIVISION OF THE ) Appeal No. 92-0992

UTAH STATE TAX COMMISSION, :

) Account No. XXXXX

Respondent. :

____________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a prehearing conference on XXXXX. Alan Hennelbold Presiding Officer, heard the matter for and on behalf of the Commission. Present and representing the Petitioner was XXXXX, owner. XXXXX, Assistant Utah Attorney General represented Respondent.

With the consent of the parties, the prehearing conference was converted to a formal hearing on the merits of Petitioner's appeal. 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 withholding tax.

2. The period in question is XXXXX through XXXXX.

3. Petitioner was incorporated during XXXXX. Ceased doing business during XXXXX.

4. For the XXXXX tax year, Petitioner properly withheld tax from its employees' wages and remitted the same to the Commission. However, in winding up Petitioner's tax affairs in connection with its cessation of business, Petitioner's accountant failed to file copies of Petitioner's W-2 forms for XXXXX, and also failed to file a withholding tax reconciliation form (TC-96) for that year.

5. An office audit of Petitioner's withholding tax liability was conducted by Tax Commission staff in late XXXXX. Because Petitioner had failed to submit copies of its W-2 forms or file its TC-96, a penalty of $700 was imposed. Upon production of the required documents, the penalty was reduced to $310.

6. Commission records indicate Petitioner has properly filed and paid its withholding tax liability for the other periods of its existence, with the exception of minor penalties imposed for the 3rd and 4th quarters of XXXXX.

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 admittedly failed to properly submit the required W-2 forms and TC-96 for the period in question, its omission is mitigated by the inadvertent nature of the error, the fact that it had paid the tax actually due, and the additional fact that the mistake occurred in the course of Petitioner's cessation of business activity.

Based upon the foregoing, the Tax Commission finds that sufficient cause has been shown to waive the penalty associated with Petitioner's XXXXX withholding tax liability. It is so ordered.

DATED this 28th day of October, 1992.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

ABSENT

R. H. Hansen Roger O. Tew

Chairman Commissioner

Joe B. Pacheco S. Blaine Willes

Commissioner Commissioner