BEFORE THE UTAH STATE TAX COMMISSION
In Re: )
XXXXXX ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
) AND FINAL DECISION
) Appeal No. 93-0146
: Account No. XXXXXX
STATEMENT OF CASE
This matter came before the Utah State Tax Commission for a formal hearing on XXXXXX. Lisa L. Olpin, Presiding Officer, heard the matter for and on behalf of the Commission. Present and representing the Petitioner was XXXXXX, a partner in XXXXXX at one time.
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 quarters in question are the third quarter XXXXXX, the XXXXX quarter XXXXXX and the first quarter XXXXXX.
3. Petitioner filed and paid its XXXXXX quarter XXXXXX sales and use tax return in XXXXXX nearly three months late. The Tax Commission assessed Petitioner a ten percent late penalty plus interest. Another $50 charge was added for failing to pay this balance after notice was given.
4. Petitioner filed its fourth quarter XXXXXX sales and use tax return on time. The payment check remitted with the return, however, was returned for insufficient funds. A $10 legal fee and interest were assessed. (A penalty earlier charged was waived in XXXXXX.)
5. Petitioner filed its first quarter XXXXXX sales and use tax return on XXXXXX nearly four months late. Full payment was made in XXXXXX. As a result, two ten percent penalties were assessed, one for late filing and the other for late payment in addition to a $10 legal fee and interest.
6. Petitioner is requesting a waiver of the penalty and interest amounts.
7. XXXXXX testified that XXXXXXX was a partner in the business in question with XXXXXX until XXXXXX when they went out of business. XXXXXX had handled the design aspect of the company while XXXXXX was in charge of the bookkeeping.
8. At the time of closing out the business, XXXXXX met with XXXXXX Burtell and their accountant to resolve remaining matters. XXXXXX explained that XXXXXXX stated that he would pay all of the outstanding tax liabilities, including the last quarter of business which was the first quarter XXXXXX.
9. XXXXXX had assumed that XXXXXX had paid the taxes until the Tax Commission sent XXXXXX notice of delinquency in the summer of XXXXXX for the first quarter XXXXXX sales and use taxes.
10. XXXXXX paid these XXXXXX sales taxes off over a year's time. XXXXXX stated that Tax Commission collector, XXXXXX, had told XXXXXX that the penalty and interest amounts would be waived once XXXXXX made full payment. XXXXXX is upset these penalty and interest amounts were not waived after full payment, especially after the collector's representations and the fact that XXXXXX wrote "payment in full" on XXXXXX last check.
11. XXXXXX also stated that XXXXXX collection practices were extremely irritating.
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
Stated generally, business partners are equally liable for each other's actions. In this case, XXXXXX was a partner in the business in question in the years XXXXX when these tax deficiencies occurred, causing penalty and interest amounts to accrue. XXXXXX cannot escape liability simply because XXXXXX partner told XXXXXX he would take care of something he later did not do.
As to the collection actions of an employee, the Commission will look into the matter internally.
Based upon the foregoing, the Tax Commission finds that sufficient cause has not been shown to waive the penalty assessments on the third quarter XXXXXXX and fourth quarter XXXXXX sales and use tax. Sufficient cause has been shown to reduce the penalty assessment on the first quarter XXXXXX sales and use tax to a single ten percent penalty. Legal fees and interest amounts are not waived on any of the quarters in question. It is so ordered.
DATED this 10TH day of SEPTEMBER, 1993.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val Oveson Roger O. Tew
Joe B. Pacheco Alice Shearer