BEFORE THE UTAH STATE TAX
COMMISSION
_________________________________
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
XXXXX, ) AND FINAL DECISION
:
) Appeal No.
92-1471
: Account
No. XXXXX
_____________________________________
STATEMENT OF CASE
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. Petitioner was present and accompanied by
XXXXX, the tax preparer who prepared her XXXXX personal income tax return.
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 period in question is XXXXX.
3. Petitioner timely filed her XXXXX personal
income tax return and received a refund therefrom.
4. In filing the return on Petitioner's behalf,
the tax preparer, XXXXX XXXXX, did not include Petitioner's XXXXX lump sum
federal civil service payment as taxable income
5. In so doing, Mr. XXXXX included a statement
with the return, explaining why the federal income amount was higher than the
state income amount.
6. On XXXXX, the Auditing Division sent
Petitioner a letter, requesting an explanation for the difference in federal
adjusted income and state adjusted income per information from the Internal
Revenue Service.
7. Petitioner responded and pointed out that
she had previously explained the discrepancy when she initially filed her XXXXX
return.
8. The Auditing Division subsequently
disallowed the exemption Petitioner had taken with regards to the lump sum
payment.
9. In turn, Petitioner requested a waiver of
the ten percent penalty assessment and the interest.
10. This request was denied on XXXXX.
11. Petitioner argues that the penalty and
interest should be abated because she filed timely with a full explanation for
the reason why the lump sum amount was not included on her return. She believes that the Tax Commission should
have discovered her error sooner.
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
Apparently,
in this case, Petitioner's XXXXX personal income tax return was not questioned
until the Internal Revenue Service provided information to the Auditing
Division indicating that Petitioner's stated federal taxable income was not the
same as Petitioner's state taxable income.
At
that point in time, the Auditing Division scrutinized Petitioner's XXXXX return
and asked for the explanation, unaware that one had been previously submitted.
In
any case, the Tax Commission has three years to verify a filed return. The fact this error on Petitioner's return
wasn't discovered until nearly two and half years after the filing is of no
consequence.
Petitioner's
accountant offered no explanation for why the lump sum payment was excluded
from income on the XXXXX return in the first place. It may be the case that Petitioner may seek compensation for any
additional costs from XXXXX, accountant.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has not been
shown which would justify a waiver of the penalty and interest associated with
the personal income tax for the year XXXXX.
It is so ordered.
DATED
this 12th day of November, 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