BEFORE THE UTAH STATE TAX
COMMISSION
________________________________
In Re: )
:
XXXXX &
XXXXX, ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
) AND FINAL
DECISION
:
) Appeal No.
92-1678
: 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. Present and representing Petitioners were
XXXXX 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 personal income tax.
2. The periods in question are the years XXXXX
through XXXXX.
3. Petitioners are requesting a waiver of the
penalty and interest assessments for the years in question.
4. In XXXXX, Petitioners filed their return
nearly four weeks late. An audit in
XXXXX increased Petitioners' tax liability for XXXXX substantially.
5. In XXXXX and XXXXX, Petitioners filed their
respective returns XXXXX years late.
6. Then in XXXXX, Petitioners again filed
late. By mistake, they attached their
son's W-2 form to the return, showing a withholding amount of only $$$$$. After the error was discovered, the true
withholding amount of $$$$$ was applied.
Tax Commission records show that Petitioners were charged interest on
the resulting $$$$$ deficit and not the originally computed $$$$$ deficit.
7. In XXXXX, Petitioners requested an extension
at the time they filed in October XXXXX.
Other than withholding credit, no additional payment was sent to cover
the delinquency.
8. Petitioners paid off all years in question
in February XXXXX.
9. Mr. XXXXX explained that in the early
XXXXX's he and his wife purchased an old church for use as a residence and
dance studio.
10. In XXXXX, however, Mrs. XXXXX, a dance
instructor, became legally blind, causing Petitioners to suffer
financially. Mr. XXXXX, a teacher,
could not keep up with the financial needs of the family without his wife's
income. They had five children.
11. Petitioners filed Chapter 13 bankruptcy, but
could not keep up with the payment schedule.
12. In XXXXX, Petitioners were getting by with
just enough money for food.
13. Then, in XXXXX, Mr. XXXXX got a second job
with the State of Utah in Youth Corrections.
Unbeknownst to Mr. XXXXX, his paycheck from the state did not take out
sufficient withholding tax as Mr. XXXXX was paid a small amount on each paycheck.
14. This became a problem at tax time on XXXXX
when Mr. XXXXX' second income was added to his full-time teaching income, Mr.
XXXXX was short on withholding credits.
15. Mrs. XXXXX, in the meantime, underwent three
cornea eye transplants and regained much of her vision by XXXXX.
16. By this time, however, Petitioners had filed
Chapter 7 bankruptcy in August XXXXX.
The bankruptcy was granted in December XXXXX. Petitioners lost their home.
17. In XXXXX, Petitioners obtained a loan from
their credit union to pay the Internal Revenue Service and the Tax
Commission. Petitioners are paying
$$$$$ in monthly payments on the loan.
18. Mrs. XXXXX is doing better and is again
teaching dance.
19. Petitioners feel they have paid an emotional
price and request that the Tax Commission reduce or waive the penalties and
interest to some degree.
20. Mr. XXXXX stated that he did not file the
returns on time because he knew he didn't have the money to pay. He did not realize that there was a penalty
for non-filing as well as nonpayment.
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).)
Pertinent
to this case is Utah Code Ann. §59-10-516(1), The commission shall allow an
extension of time, not exceeding six months, for filing returns . . . The
payment accompanying the request shall be at least 90% of the total tax
reported on the income tax return when it is filed or the same as the total
amount of tax paid on the income tax return for the previous year. The extension request and payment are due by
April 15th following the close of the taxable year.
DECISION AND ORDER
Aside
from Mrs. XXXXX' eyesight problems, Petitioners filed incorrectly in XXXXX,
resulting in twice as much tax liability as initially reported. Then, Petitioners did not file for the next
two years. In the last year, the
extension request was filed untimely.
Petitioners
should have at least filed their returns appropriately during the years in
question.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has not been
shown which would justify a waiver of the penalties associated with the
personal income tax due on the years XXXXX-XXXXX. Interest for the time period of August XXXXX through December
XXXXX is waived. It is so ordered.
DATED
this 25th day of February, 1993.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco S.
Blaine Willes
Commissioner Commissioner