92-1772 - Corporate Franchise

BEFORE THE UTAH STATE TAX COMMISSION

_______________________________

In Re: )

:

XXXXX, XXXXX ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

) AND FINAL DECISION

:

) Appeal No. 92-1772

: 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 the Petitioner were XXXXX, a certified public accountant, and XXXXX, vice-president of 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 corporate franchise tax.

2. The period in question is XXXXX through XXXXX.

3. Petitioner did not file its corporate franchise return and pay the amount due for the year in question until six months past the deadline. It was due XXXXX.

4. As a result, Petitioner was penalized $$$$$ plus interest.

5. The Tax Commission then reduced the penalty to $$$$$ after Petitioner submitted a request for abatement of penalties and interest.

6. The $$$$$ reduction in penalties is ten percent of the total tax due ($$$$$) added to ten percent of ninety percent of the total tax due that Petitioner should have filed with an extension request ($$$$$).

7. Mr. XXXXX explained that in XXXXX Petitioner's inhouse accountant left the company.

8. Sometime thereafter he learned that the former accountant's books were incomplete and sloppy. The accountant had correctly filed, however, two previous corporate tax returns.

9. Petitioner claims it filed a request for extension in XXXXX while it endeavored to rectify the bookkeeping problems.

10. Concluding that the bookkeeping was too far gone, Petitioner contacted certified public accountant XXXXX late in XXXXX to reconstruct the books.

11. With XXXXX's help, Petitioner filed in XXXXX.

12. Petitioner is requesting a waiver of the remaining penalty and interest assessments, claiming that it was unable to submit an accurate return until the bookkeeping was straightened out.

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

Less than desirable bookkeeping is not an excuse for failing to file and pay taxes on time. Petitioner is liable for the actions/inactions of its employees. In this case, Petitioner compounded the problems by trying to handle the accounting problems without the expertise it needed.

Based upon the foregoing, the Tax Commission finds that sufficient cause has not been shown which would justify a further waiver of the penalty assessments associated with the corporate franchise tax due on the period in question. Interest is not waived. It is so ordered.

DATED this 19th day of March, 1993.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

R. H. Hansen Roger O. Tew

Chairman Commissioner

ABSTAINED

Joe B. Pacheco S. Blaine Willes

Commissioner Commissioner