BEFORE THE UTAH STATE TAX
COMMISSION
__________________________________
In Re: ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
XXXXX, ) AND FINAL DECISION
:
) Appeal No.
92-1803
: 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, executor of Petitioner's estate.
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 years in question are XXXXX, XXXXX,
XXXXX.
3. Petitioner was diagnosed with Parkinson's
Disease in XXXXX.
4. In years prior to that time, Petitioner had
timely filed and paid his personal income taxes.
5. In succeeding years, after diagnosis,
Petitioner's health began to steadily decline.
Petitioner did not talk or communicate well.
6. In XXXXX when Petitioner died, his son,
XXXXX, was named executor of his father's estate.
7. XXXXX testified he went to the Tax
Commission in XXXXX to determine if his father's personal income taxes were
current. He recalls that a Commission
employee told him that his father was not delinquent for the years XXXXX and
XXXXX. XXXXX remembers the employee's
name was XXXXX.
8. In XXXXX, XXXXX received a letter from the
Internal Revenue Service stating that Petitioner had not filed his personal
income tax return for XXXXX.
9.
At this time, XXXXX and C.P.A. XXXXX
undertook the task of reconstructing the last three years of Petitioner's life
for they also learned that Petitioner had not filed federal and state returns
for XXXXX and XXXXX as well.
10. XXXXX testified that the amount of work
necessary to file accurate returns was incredible. He and XXXXX had to track down every stock sale in addition to
locating other information.
11. Petitioner's records were misplaced, lost or
stolen. Petitioner's home had been
burglarized since Petitioner's death.
12. After months and months of research with the
help of the Internal Revenue Service, XXXXX filed the past due returns as the
information became available to him.
13. XXXXX filed an extension request with the
state for XXXXX in anticipation of delay due to the state of his father's
affairs.
14. XXXXX first filed the federal returns and
then concentrated on the delinquent state returns.
15. Petitioner's XXXXX and XXXXX personal state income
tax returns were filed and paid on XXXXX.
Petitioner's XXXXX personal state income tax return was filed and paid
on XXXXX.
16. XXXXX thinks he disbursed the remaining
funds in his father's estate sometime in mid-XXXXX. At the time of disbursement, the penalty and interest assessments
for late filings and late payments on state returns for XXXXX, XXXXX and XXXXX
were still outstanding.
17. Petitioner's request for a waiver of these
penalties and interest assessments was denied in XXXXX. Then, for some reason, in XXXXX, the Tax
Commission reversed itself and waived all of the penalty assessments. The
interest assessment was reduced from $$$$$ to $$$$$.
18. XXXXX is requesting a waiver of the
remaining interest amount, contending that the late filings and payments were
not intentional in that Petitioner was incapacitated during the time they were
due.
19. In any case, the estate has been settled and
no funds remain to pay the interest amount.
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
In
this case, Petitioner's executor voluntarily distributed the funds in
Petitioner's estate before Petitioner's account with the State Tax Commission
was rectified. At the very least, the
executor should have withheld from disbursement the amount of penalties and
interest, knowing that they were viable assessments against Petitioner's
account. Then if indeed, some or all of
the assessments were later waived, a second disbursement would have been
possible.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has not been
shown which would justify a further reduction of the remaining interest
assessment associated with the personal income taxes due on the years XXXXX,
XXXXX and XXXXX. The interest is not
waived because Petitioner had use of the money during the time it should have
been remitted to the state. It is so ordered.
DATED this 12th day of March, 1993.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
ABSENT
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco S.
Blaine Willes
Commissioner Commissioner