92-1801 to 92-1802 - Sales & Withholding

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

In Re: ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

XXXXX ) AND FINAL DECISION

XXXXX INC., :

) Appeal Nos. 92-1801

: and 92-1802

) Account Nos. XXXXX

: and 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. Petitioner was present and represented by XXXXX, owner.

Based upon the evidence and testimony presented at the hearing, the Tax Commission hereby makes its:

FINDINGS OF FACT

1. The taxes in question are sales and use tax and withholding tax.

2. Pertaining to the sales and use tax, all quarters of XXXXX and XXXXX are at issue. Pertaining to the withholding tax, all quarters of XXXXX are at issue.

3. Petitioner paid all of the delinquent quarters in question above in XXXXX.

4. Petitioner was assessed a ten percent late filing and a ten percent late payment penalty on each of the quarters in question plus interest.

5. Petitioner is requesting a waiver of these penalty and interest amounts.

6. XXXXX, owner of XXXXX, testified that in XXXXX he opened a second restaurant in the XXXXX Mall. Just prior to the opening, his mother was diagnosed with terminal cancer.

7. XXXXX flew home to his mother to care for her. At intervals, he would return to his business for brief periods of time.

8. Shortly after his mother was diagnosed with cancer, XXXXX' grandmother died. In XXXXX, XXXXX lost his mother to cancer. He had been with her for two weeks prior to her death. XXXXX handled the funeral arrangements.

9. XXXXX explained that the losses of his mother and grandmother, both of whom he was very close to, caused him substantial emotional setbacks.

10. During the time XXXXX had attended to his mother, he let his business responsibilities slide. The second restaurant was not doing well in its location and without XXXXX' direction the restaurant fell even further behind.

11. During the next year or so, XXXXX understood that Petitioner's certified public accountant was handling the withholding tax return filings and sales and use tax return filings. When XXXXX later learned that this was not the case, he realized that there was miscommunication somewhere along the line.

12. XXXXX, in order to keep this second location on its feet, had spent $$$$$ of his mother's inheritance and had mortgaged his home. Despite XXXXX' efforts, the new location was losing some $$$$$ per month. XXXXX began working double shifts and doing all of the restaurant shopping himself. He did not draw a salary for two years.

13. When the Tax Commission contacted XXXXX and told him that Petitioner was behind $$$$$ in taxes, XXXXX put the restaurant up for sale. He took the proceeds from the sale and paid off the outstanding tax and interest amounts.

14. Petitioner is requesting a waiver or reduction of the penalty and interest assessments in that XXXXX had been unable to get the restaurant off to a good start due to the deaths in the family. Further, XXXXX assumed that the taxes were being paid throughout the short existence of the second restaurant, believing that the taxes had been taken care of by the accountant.

15. At the time, XXXXX is struggling to meet his financial obligations worsened by the events described.

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

Based upon the foregoing, the Tax Commission finds that sufficient cause has been shown which would justify a reduction of the penalties associated with the sales and use tax and withholding tax due on the years XXXXX and XXXXX to ten percent. Interest is not waived. It is so ordered.

DATED this 7th day of May, 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