BEFORE THE UTAH STATE TAX
COMMISSION
____________________________________
XXXXX, )
:
Petitioner, ) FINDINGS OF FACT,
: CONCLUSIONS
OF LAW
v. ) AND FINAL DECISION
:
AUDITING
DIVISION OF THE ) Appeal No. 92-1871
UTAH STATE TAX
COMMISSION, :
) Account
No. XXXXX
:
Respondent. )
_____________________________________
STATEMENT OF CASE
This
matter was heard in a formal hearing on XXXXX by the Utah State Tax
Commission. Lisa L. Olpin, Administrative
Law Judge, heard the matter for and on behalf of the Commission. Petitioner participated by telephone. Respondent was represented by XXXXX,
Assistant Utah Attorney General, who was present.
At
the start of the hearing and pursuant to Petitioner's brief, Petitioner
requested a summary judgment en banc on all issues. Petitioner's motion was denied.
Based
upon the evidence and testimony presented at the hearing, the Tax Commission
makes its:
FINDINGS OF FACT
1. The tax in question is individual income
tax.
2. The years in question are XXXXX-XXXXX.
3. Petitioner has not filed individual income
tax returns in Utah for the years in question nor has he paid any tax amount on
these respective years.
4. The Auditing Division has estimated Petitioner's
tax amount due for these years and has assessed Petitioner these tax
deficiencies. Two ten percent penalties
for non-filing and non-payment plus interest have also been added on each year
in question.
5. Petitioner maintains that the assessment of
individual income tax against him is unconstitutional. He has repeatedly requested exempt status
from any tax assessments on all of his personal income and feels that he has
never volunteered to pay any government any tax amount. He contends that he has never entered into
any contractual agreement to pay taxes to any entity and, therefore, cannot be
required to pay.
6. While there appears to be no dispute on the
facts of this case, rather a difference of interpretation on the constitutionality
of individual income taxation only, Petitioner testified to the following:
7. For the year XXXXX, Petitioner thinks he was
living in XXXXX. He did, however, in
XXXXX, list a XXXXX, Utah rental address on his Utah driver's license.
8.
In either XXXXX or XXXXX, Petitioner
remembers he came to Utah and worked for six months at XXXXX in Utah. He recalls that he requested exempt status
on all of his Internal Revenue Service tax forms.
9. Also in XXXXX or XXXXX, Petitioner worked
for XXXXX XXXXX in Nevada. He remembers
moving to XXXXX, Nevada where he rented an apartment.
10. From XXXXX through XXXXX, Petitioner recalls
he lived in XXXXX, Utah at an XXXXX address.
During these years he worked for XXXXX XXXXX and XXXXX in XXXXX (outside
Utah), XXXXX (Utah), XXXXX (Utah), XXXXX (Utah) and XXXXX (Utah).
11. He did not file state or federal returns
during any of the years in question even though he received compensation by all
of his employers.
12. Petitioner maintained a Utah driver's
license during the years in question.
He registered one vehicle in Utah in XXXXX.
13. He also obtained an Arizona driver's license
at one point during the years in question.
14. In XXXXX, Petitioner used his XXXXX, Utah
address on his small game Utah hunting license.
15. According to Auditing Division employee,
XXXXX, the Tax Commission estimated Petitioner's tax liabilities for the years
XXXXX and XXXXX. For tax year XXXXX,
the Tax Commission obtained information from the I.R.S. on the amount of wages
Petitioner earned. For tax years XXXXX
and XXXXX, the Commission obtained copies of W-2 forms from the XXXXX and
XXXXX.
16. Petitioner does not dispute the amount of
taxes the Auditing Division says he owes on the years in question. He argues that the tax is unlawful on
several grounds as cited in his brief.
Generally, Petitioner states that he has a natural right to exchange
labor without incurring a liability in the form of taxes. He believes that Article I, Section 9 of the
U.S. Constitution bans taxation. He
also referred to the 16th Amendment on slavery whereby the anti-tax clause was
never repealed. Petitioner also stated
that income is not defined by the I.R.S. as wages earned in exchange for
labor. For these reasons and others as
incorporated in Petitioner's brief, Petitioner contends that the tax in
question is illegal.
17. The Auditing Division responds that the
taxation of individual income by the State is appropriate under Utah law.
CONCLUSIONS OF LAW
The
Individual Income Tax Act states that one of its objectives is to "impose
on each resident individual, estate, or trust for each taxable year measured by
the amount of his "taxable income" for such year, as determined for
federal income tax purposes, subject to certain adjustments." Utah Code Ann. §59-10-102(a).
"State
taxable income" in the case of a resident individual means his federal
taxable income ... with the modifications, subtractions, and adjustments
provided in Section 59-10-114."
Utah Code Ann. §59-10-112.
"Federal
taxable income" means taxable income as currently defined in Section 63,
Internal Revenue Code of 1986."
Utah Code Ann. §59-10-111.
Generally,
the term "taxable income" means gross income minus the deductions
allowed. Gross income is defined by the
Internal Revenue Code 61(a) as "all income from whatever source derived,
including (but not limited to) the following items: (1) Compensation for
services, including fees, commissions, fringe benefits, and similar items; (2)
Gross income derived from businesses;...".
Further,
if any person fails to make and file any return required...the commission shall
make such return from its own knowledge and from such information as it can
obtain through testimony or otherwise.
Any return so made and subscribed by the commission shall be prima facie
good and sufficient for all legal purposes.
Utah Code Ann. §59-10-506(2).
The
petitioning party has the burden of proof to establish that the petition should
be granted. Utah Admin. Rule
R861-1A-7(G).
DECISION AND ORDER
The
Tax Commission finds that Petitioner was correctly assessed individual income
tax for the years XXXXX-XXXXX based upon Petitioner's own testimony and the
information provided by the Auditing Division.
The penalty and interest amounts are not waived. It is so ordered.
DATED
this 27th day of October, 1993.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val
Oveson* Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco Alice
Shearer*
Commissioner Commissioner