93-0307
Income
Signed 5/7/93
BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
In Re: )
) INFORMAL DECISION
XXXXX, )
) Appeal No. 93‑0307
) Account No. XXXXX
_____________________________________
STATEMENT OF
CASE
This matter came before the Utah State
Tax Commission pursuant to the Administrative Procedures Act and the rules of
the Utah State Tax Commission for informal proceedings. As provided for by Utah Code Ann. 63‑46b‑5,
this decision is based upon information contained in the Tax Commission's file.
FINDINGS
Petitioners filed their XXXXX
individual income tax returns on XXXXX, showing tax due of $$$$$ and credits
for withholding tax of $$$$$. The Tax
Commission issued a refund check of $$$$$.
A subsequent audit of Petitioner's
return disclosed that Petitioners had deducted 100% of their federal income tax
liability on their state return, rather than 50% as permitted by law. As a result, the audit increased their tax
liability from $$$$$ to $$$$$. An audit
assessment letter was sent to Petitioners on XXXXX. On XXXXX, Petitioners paid the amount of additional tax due. With their payment they requested waiver of
a portion of the accrued interest in the amount of $$$$$, on the grounds the
Tax Commission had failed to discover Petitioners' error on their XXXXX tax
return within a reasonable time.
On XXXXX, Petitioners paid the
interest accrued to that date of $$$$$.
However, that same day a $$$$$ late payment penalty was assessed against
them.
DECISION AND
ORDER
Once notified of their error,
Petitioners have responded promptly to pay their additional tax in this
matter. No penalty should have been
assessed against Petitioners, and all penalties are hereby waived by the Tax
Commission with respect to the XXXXX tax year.
As to Petitioners' contention that
interest should be abated because of the time it took Commission staff to
discover Petitioners' error, the Commission does not agree. The error could not be discovered until
Petitioners' federal tax information had been received from the Internal
Revenue Service and compared to Petitioners' state return. Furthermore, the assessment of interest is
merely a charge for the time value of tax funds during the period it was held
by Petitioners. The Tax Commission
finds sufficient cause does not exist to waive the interest associated with
Petitioners' XXXXX Utah income tax liability. It is so ordered.
DATED this 7 day of May, 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
NOTICE: You
have twenty (20) days after the date of the final order to file a request for
reconsideration or thirty (30) days after the date of the final order to file
in District Court a petition for judicial review. Utah State Tax Commission
Administrative Rule R861‑5A‑1(p) and Utah Code Ann. '63‑46b-14(3)(a).
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