BEFORE THE UTAH STATE TAX
COMMISSION
_________________________________
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
XXXXX, ) AND FINAL DECISION
:
) Appeal No.
92-1612
: Account
No. XXXXX
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a formal hearing on
XXXXX. Paul F. Iwasaki, Presiding
Officer, heard the matter for and on behalf of the Commission. Present and representing the Petitioner was
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 income tax.
2. The period in question is XXXXX.
3. When the Petitioner filed his XXXXX Utah
income tax return, he did so using form TC-40S.
4. On line 6 of that return the taxpayer is
instructed to enter "1/2 federal tax liability on federal return (see
instructions, page 5)".
5. The instructions of page 5 state, "Line
6-Federal Tax: enter one half of your federal income tax from line 7 of the
federal return, form 1040EZ or line 22 of form 1040A."
6. The Petitioner misunderstood the instruction
to refer to form 1040, which is the federal income tax return form he used, as
well as to form 1040EZ. Line 7 of form
1040 is the line on which wages, salaries, and tips are reported. Therefore, the Petitioner entered $$$$$ as
one half of his federal tax liability.
7. The Petitioner realized the possibility that
there had been an error made when he finished the return and calculated that a
refund was due him. The Petitioner did
not call the Tax Commission nor seek outside help because he believed that he
followed the instructions correctly.
8. The Petitioner later received notice from
the Commission that additional tax was due and was also made aware that a
penalty in the amount of $$$$$ was assessed as well as interest applied at the
statutorily prescribed rate.
9. The Petitioner requested a waiver of the
penalty and interest associated with the XXXXX income tax year. By subsequent Commission action, the penalty
portion was waived. The Petitioner
seeks waiver of the interest assessed.
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
In
the present case, the Petitioner asserts that waiver of the interest assessed
would be appropriate because the instructions provided him when filing his
return were confusing thus leading to an incorrect return being filed. The Commission finds that under the
circumstances of the present case, a bona fide mistake on the Petitioner's part
could have been prompted by his misreading of the instructions. Therefore, waiver of the penalty which had
been imposed was appropriate. Such an
error, however, does not necessarily also require a finding that waiver of the
interest is also appropriate.
The
Tax Commission finds that because the Petitioner had use of the money which he
otherwise would not have had during the time in question, a waiver of the
interest assessed would not be appropriate.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has not been
shown which would justify a waiver of the interest associated with the XXXXX
income tax year. It is so ordered.
DATED
this 12th day of November, 1992.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B. Pacheco S.
Blaine Willes
Commissioner Commissioner