BEFORE THE UTAH STATE TAX COMMISSION
Petitioner, ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
v. ) AND FINAL DECISION
AUDITING DIVISION OF THE ) Appeal No. 92-1249
UTAH STATE TAX COMMISSION, :
) Account No. XXXXX
STATEMENT OF CASE
This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. XXXXX, Presiding Officer, heard the matter for and on behalf of the Commission. Petitioner XXXXX appeared on XXXXX own behalf. Respondent was represented by XXXXX, Assistant Utah Attorney General.
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 periods in question are XXXXX through XXXXX.
3. Petitioner is self-employed as a XXXXX in Utah County.
4. Petitioner did not file either federal or Utah income tax returns for the years XXXXX through XXXXX.
5. The Internal Revenue Service determined Petitioner's federal income tax liability for each of the years in question based upon estimates of Petitioner's income from his XXXXX XXXXX. The I.R.S. determinations of Petitioner's income and XXXXX federal income tax liability remain in effect.
6. On XXXXX, Respondent assessed Petitioner with individual income tax for each of the years in question. The assessment was based upon the I.R.S.'s determination of Petitioner's taxable income. Respondent also imposed 10% late filing penalty and a 10% late payment penalty with respect to the tax found due for each year. Interest at the statutory rate of 12% per annum was also assessed, accrued through XXXXX. The amounts of tax, penalty and interest so assessed are set forth below:
Year Tax Penalty Interest (To XXXXX)
XXXXX $ $$$$$$ $$$$$$ $$$$$
7. Petitioner filed a timely Petition For Redetermination of the foregoing assessment with the Utah State Tax Commission.
8. Petitioner has not come forward with any evidence to contradict either the I.R.S. determination of his taxable income, or Respondent's determination of his Utah individual income tax liability.
CONCLUSIONS OF LAW
Utah Code Ann. §59-10-104 imposes a tax on the state taxable income, as defined in Sections59-10-111 and59-10-112, of every resident individual.
"Federal taxable income" means taxable income as currently defined in Section 63, Internal Revenue Code of 1986. (Utah Code Ann. §59-10-111).
"State Taxable income" in the case of a resident individual means his federal taxable income (as defined by Section 59-10-111) with the modifications, subtractions, and adjustments provided in Section 59-10-114. (Utah Code Ann. §59-10-112).
DECISION AND ORDER
The primary thrust of Petitioner's arguments in this matter is that XXXXX has not federal taxable income, and therefore no state taxable income. However, the I.R.S. has determined that Petitioner did, in fact, have taxable income for the years in question and has assessed federal income tax upon such income. The I.R.S. determination of Petitioner's federal taxable income for the years in question remains in effect. Furthermore, Petitioner has presented no evidence to contradict either the I.R.S. determination of income or Respondent's assessment of state income tax. As noted by the Utah Supreme Court in Jensen v. State Tax Commission, filed July 23, 1992, No. 910151:
The Code imposes a tax
on a Utah resident's federal taxable income with certain adjustments. Utah Code Ann. §§59-14A-5, -11 (1974): §§59-10-104, -112 (1987). Federal taxable income is defined by the
Utah Code as taxable income under 26 U.S.C. §63. Utah Code Ann. §59-14A-10 (1974); §59-10-111 (1987). Section 63 of title 26 of the United States
Code, in conjunction with income from whatever source derived, including gross
income derived from a business and compensation for services, such as fees,
commission, and fringe benefits. 26
U.S.C. §§ 61(1), 61(2), 63 (1988).
Although Petitioner contends the I.R.S. has exaggerated XXXXX income, XXXXX has not provided a more accurate statement of XXXXX income, nor has XXXXX filed any federal or state returns for the years in question.
Based on the foregoing, the Commission concludes Petitioner has failed to demonstrate that Respondent's assessment in this matter is incorrect. The Commission therefore affirms Respondent's assessment with respect to each of the years in question. It is so ordered.
DATED this 3rd day of February, 1993.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco S. Blaine Willes