BEFORE THE UTAH STATE TAX
COMMISSION
____________________________________
XXXXX, )
:
Petitioner, ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW AND
v. ) FINAL DECISION
:
AUDITING
DIVISION OF THE ) APPEAL No. 92-1744
UTAH STATE TAX
COMMISSION, :
) Acct. No.
XXXXX
:
Respondent. )
_____________________________________
STATEMENT OF CASE
This
case was heard before the Utah State Tax Commission in a formal hearing on
XXXXX. Lisa L. Olpin, Presiding
Officer, heard the matter for and on behalf of the Commission. Petitioner was present with his wife,
XXXXX. Respondent was represented by
XXXXX, Assistant Utah Attorney General.
Based
upon the evidence and testimony presented at the hearing, the Tax Commission
makes its findings of fact:
FINDINGS OF FACT
1. The tax in question is individual income
tax.
2. The years in question are XXXXX, XXXXX and
XXXXX.
3. According to Tax Commission records,
Petitioner filed his XXXXX, XXXXX and XXXXX returns in XXXXX. As a result, the Auditing Division assessed
Petitioner two ten percent penalties on the year XXXXX, two $$$$$ penalties on
the year XXXXX and two ten percent penalties on the year XXXXX. The penalties are for late filing and late
payment.
4. Commission records also show that Petitioner
filed an extension request for XXXXX and submitted a prepayment in the amount
of $$$$$, but did not file the actual return with full payment until XXXXX.
5. Petitioner recalls that he had his XXXXX and
XXXXX returns prepared for him by XXXXX, but that he did not file these returns
until XXXXX. He believes that he filed
late because he did not have enough funds at the time they were due.
6. Petitioner remembers, however, that he sent
in the late returns with a single check paying for both years.
7. Petitioner provided a letter from his bank,
XXXXX Bank, which states that the bank destroys all records older than seven
years. The bank, therefore, could not
assist Petitioner in locating the check.
8. Turning to the year XXXXX, Petitioner states
that he did file that return on time.
Petitioner's wife, XXXXX, explained that she mailed this return, but
forgot to enclose a check.
9. The Tax Commission notified Petitioner for
the first time in XXXXX that no return had been filed nor had payment been
received on any of the three years in question.
10. Petitioner argued that the Tax Commission
should not have taken so long to contact him about these returns. He contends that the length of time that has
passed significantly harms his ability to adequately represent himself, i.e.,
he can't find any records, the bank has destroyed its records, etc.
11. Adding to the problem is that Petitioner
moved in XXXXX and his wife threw out a lot of papers which may or may not have
been helpful to him with this case.
12. The Auditing Division responded that
Petitioner has a duty to maintain records and that Petitioner's non-filing of
returns for three of the last ten years shows a pattern of noncompliance.
13. Petitioner is seeking a waiver of the tax,
penalty and interest assessments for the years XXXXX and XXXXX. Additionally, Petitioner is requesting a
waiver of the penalty assessment associated with the year XXXXX.
CONCLUSIONS OF LAW
Upon
reasonable cause shown, the Commission may waive, reduce, or compromise any of
the penalties or interest imposed. Utah
Code Ann. §59-1-401(8).
"Every
taxpayer shall keep adequate records for income tax purposes of a type which
clearly reflect income and expense, gain or loss, and all transactions
necessary in the conduct of business activities. Records of all transactions affecting income or expense, or gain
or loss, and of all transactions for which deductions may be claimed, should be
preserved by the taxpayer to enable preparation of returns correctly and to
substantiate claims." Utah
Administrative Rule R865-9-18(I).
Further,
the tax may be assessed at any time if: (a) no return is filed...Utah Code Ann.
§59-10-536(3). The Tax Commission has
three years to assess taxes on a filed return.
Utah Code Ann. §59-10-536(1).
DECISION AND ORDER
Petitioner
has not presented sufficient evidence in this case to persuade the Tax
Commission that he filed the returns in question timely and with payment as he
proposes.
The
Commission elects, however, to grant Petitioner a reduction in the amount of
penalties given the circumstances Petitioner has presented.
Based
upon the foregoing, the Tax Commission finds sufficient cause exists to reduce the
penalties in question to a single 10% penalty on individual income tax for each
of the years XXXXX, XXXXX and XXXXX.
The tax assessments and interest amounts are not waived or reduced. It is so ordered.
DATED
this 4th day of August, 1993.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val
Oveson* Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco Alice
Shearer*
Commissioner Commissioner