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.
R. H. Hansen Roger O. Tew
Joe B. Pacheco S. Blaine Willes