BEFORE THE UTAH STATE TAX COMMISSION
Petitioner, ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
v. ) AND FINAL DECISION
AUDITING DIVISION OF THE ) Appeal No. 92-1291
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. Lisa L. Olpin, Administrative Law Judge, heard the matter for and on behalf of the Commission. Petitioner represented herself by telephone. Present and representing Respondent was 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 personal income tax.
2. The year in question is XXXXX.
3. Petitioner received a refund of $$$$$ as a result of her XXXXX income tax return information.
4. After an audit, Petitioner's Utah taxable income for the same year was adjusted upwards, leaving Petitioner with a $$$$$ tax liability, penalty and interest.
5. Petitioner appeals the tax adjustment, the penalty and the interest assessments.
6. Petitioner filed her XXXXX personal federal income tax return using a 1040 form.
7. When Petitioner reported her XXXXX personal state income taxes, she used a resident short form. She also referred to the XXXXX Utah income tax return instruction booklet for direction in filling out her state form.
8. At page 5 of the instruction booklet, tax preparers are instructed to "Enter one-half of your federal income tax from line 7 of the federal return, form 1040EZ or line 22 form 1040A" on line 6 of the state form (emphasis added).
9. Petitioner referred to line 7 or possibly line 23 of her 1040 federal form and reported one-half of this amount on line 6 of her state income tax return.
10. The problem is that the figure on lines 7 and 23 on the 1040 federal form was Petitioner's total federal income amount. The figure Petitioner should have used was line 55 of her 1040 form which represented her total federal tax liability.
11. Using the wrong figure, Petitioner's XXXXX state income tax return was in error.
12. Petitioner contends that the state instruction booklet was misprinted, or at least misleading. She asserts she made an honest effort to file her return correctly. She wants the Tax Commission to accept her return as filed.
13. Petitioner also maintains that because the Tax Commission discovered the error nearly two years later she cannot be required to pay the penalty or the interest.
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).)
Further, "the amount of any tax imposed by this chapter shall be assessed within three years after the return was filed..." (Utah Code Ann. §59-10-536.)
DECISION AND ORDER
Based upon the foregoing, the Tax Commission finds that the Auditing Division did properly adjust Petitioner's XXXXX state income tax amount. The penalty assessment is waived; the interest is not.
Petitioner is responsible for the correct amount of taxes owing for the year in question. As stated above, the law allows the Tax Commission three years to assess taxes on a filed return.
Petitioner may contact the Collections Division to arrange a payment plan.
DATED this 21st day of December, 1992.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco S. Blaine Willes