BEFORE THE UTAH STATE TAX COMMISSION
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
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
Joe B. Pacheco Alice Shearer*