BEFORE THE UTAH STATE TAX COMMISSION
In Re: )
XXXXX ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
) AND FINAL DECISION
) Appeal No. 92-2090
: Account No. XXXXX
STATEMENT OF CASE
This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. XXXXX, Presiding Officer, heard the matter for and on behalf of the Commission. Present and representing Petitioner was XXXXX, an attorney.
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 sales and use tax.
2. The periods in question are the first three quarters of XXXXX and the first three quarters of XXXXX.
3. Petitioner failed to timely file and pay the sales and use taxes due on the quarters in question. Consequently, the Tax Commission assessed Petitioner $$$$$ penalty on each quarter which reflects a $$$$$ late filing fee and a $$$$$ late payment fee.
4. Petitioner is requesting a waiver of the penalty and interest amounts.
5. Petitioner began as a California corporation in XXXXX and existed solely as a service-oriented business. As such, Petitioner was not liable for collecting sales and use tax.
6. Then, in XXXXX, Petitioner expanded business to Utah where it employed a single employee and began retail sales for the first time.
7. Petitioner did not formally set up accounting procedures right away as the Utah business was still new and organizing itself.
8. After Petitioner hired a bookkeeper that same year, the bookkeeper discovered that Petitioner had failed to file and pay sales and use taxes for the first three quarters of XXXXX. Petitioner rectified the problem by XXXXX.
9. Then, in the end of XXXXX, the bookkeeper quit Petitioner's employment.
10. Petitioner hired XXXXX to handle its books although she had no familiarity with taxes. At the same time, Petitioner went to a certified public accountant, XXXXX, for advice on tax filings.
11. XXXXX provided Petitioner a list of all of its tax filing obligations and filing deadlines.
12. Later, in XXXXX, Petitioner realized that it was collecting Utah sales tax and that it was not being remitted. Petitioner then filed and paid on the outstanding XXXXX quarters in XXXXX.
13. Petitioner discovered that the sales and use tax in XXXXX was not remitted because XXXXX had been following the accountant's list of tax filings which omitted any reference to sales and use tax filings. Petitioner provided a copy of the C.P.A.'s list, showing the omission.
14. Petitioner is requesting a waiver of penalties at the very least, as it was unfamiliar with filing requirements during the first three quarters of XXXXX. In XXXXX, the list of tax obligations from the accountant omitted the sales and use tax filings causing another delay.
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 penalty associated with the sales and use tax due on the first three quarters of XXXXX and the first three quarters of XXXXX by $$$$$ on each quarter. The interest is not waived. It is so ordered.
DATED this 4TH day of AUGUST, 1993.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val Oveson* Roger O. Tew
Joe B. Pacheco Alice Shearer*