BEFORE THE UTAH STATE TAX
COMMISSION
___________________________________
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
XXXXX AND ) AND FINAL DECISION
XXXXX, :
) Appeal No.
92-1238
: Account
No. XXXXX
)
___________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a formal hearing on
XXXXX. Alan Hennebold, Presiding
Officer, heard the matter for and on behalf of the Commission. XXXXX appeared in person on behalf of
himself and XXXXX.
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 individual income
tax.
2. The period in question is XXXXX.
3. During XXXXX, Petitioner XXXXX retired from
his employment and received a lump sum distribution of retirement
benefits. Because Petitioners were
unsure of the proper manner in which to report the retirement benefits on their
tax returns, they engaged a Certified Public Accountant to prepare their
returns for them.
4. Petitioners filed their Utah income tax
return on XXXXX, reporting tax liability of $$$$$ less withholding credits of
$$$$$. The return was accompanied by
payment of the remaining tax due.
5. In XXXXX, Petitioners received a request
from Respondent for a copy of their XXXXX federal return. They mailed the requested copy
immediately. Shortly thereafter, they
received the return back from Respondent, with no comment or request for any
further action. Petitioners assumed
their income tax returns had been reviewed and were in order.
6. In fact, Respondent had audited Petitioners'
XXXXX return during mid-XXXXX and increased Petitioners' liability from $$$$$
to $$$$$.
7. On XXXXX, Petitioners received their first
notice of the increase in their tax liability.
The notice assessed additional tax of $$$$$, a 10% penalty of $$$$$ and
interest at the statutory rate of 12% per annum.
8. Petitioners immediately paid the additional
tax due and requested waiver of penalty and interest.
9. Petitioners have previously filed and paid
their Utah income tax liability in a timely manner.
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
Petitioners
do not contest the additional income tax assessed for XXXXX, but seek waiver of
penalty and interest.
Petitioners
made reasonable effort to properly file their XXXXX income tax return, even
hiring a C.P.A. to complete their return for them. Petitioners have complied with Respondent's requests for
information and paid the additional tax due as soon as they received notice of
the assessment. Finally, Petitioners' have
a history of properly filing and paying their state income tax. Under these circumstances, the Commission
finds reasonable cause to waive the penalty assessed against Petitioners with
respect to their XXXXX Utah income tax liability.
Petitioners
also request waiver of interest which was assessed on Petitioners' unpaid
income tax. Petitioners point out that
Respondent was slow in discovering Petitioners' tax deficiency and that even
after Respondent discovered the deficiency, Petitioners were not notified for
several more months. As a result,
interest continued to accrue.
The
record in this matter shows that Petitioners could have been advised of their
XXXXX tax liability by XXXXX, but did not receive notice until XXXXX. For that reason, the Commission abates
interest assessed after XXXXX. Interest
accrued prior to XXXXX is not waived.
In
summary, the Commission waives all penalties assessed against Petitioners in
this matter. The Commission also waives
interest charges after XXXXX.
Respondent is instructed to recompute Petitioner's remaining liability
in accordance with this decision, then notify Petitioner of the amount due, if
any. IT IS SO ORDERED.
DATED
this 13th 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