93-0335 INCOME

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

In Re: )

:

XXXXX, ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

) AND FINAL DECISION

:

) Appeal No. 93-0335

: Account No. XXXXX

)

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STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a formal hearing on XXXXX, XXXXX. Lisa L. Olpin, Presiding Officer, heard the matter for and on behalf of the Commission. Present and representing the Petitioners was XXXXX.

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 individual income tax.

2. The periods in question are the years XXXXX-XXXXX.

3. Petitioners filed their individual income tax returns in question in XXXXX XXXXX. The tax amounts owing were paid in full a year later.

4. The Tax Commission assessed Petitioners late filing penalties on each of the years in question. The Commission later reduced the penalties to $100 total for all years in question. Interest amounts were not reduced.

5. Petitioners are requesting a waiver of the remaining penalty and interest amounts as they feel that they are being penalized for causes beyond their control.

6. Petitioners owned XXXXX in the early XXXXX's, leasing tractors, tools, heavy equipment, etc. In XXXXX, Petitioners lost over ($$$$) in accounts receivables over a three-month period when contractors failed to pay. This situation caused Petitioners to file Chapter 11 bankruptcy.

7. Since that time, Petitioners have been able to pay off past debts according to the bankruptcy plan.

8. In the mid-XXXXX's, XXXXX went back through company books for the years XXXXX-XXXXX and discovered that the bookkeeping was inaccurately done by an employee. In fact, XXXXX determined that the employee had embezzled funds.

9. With the stress of the failed business, XXXXX suffered a heart attack in XXXXX, requiring a seven artery by-pass operation. He has pulmonary heart disease and arthritic lungs with reduced respiratory capacity at this time.

10. Due to tight finances, XXXXX has taken a job at a XXXXX as a store manager.

11. Petitioners accumulated enormous medical bills as a result of XXXXX's heart condition. The bankruptcy situation and needs of their ten children strapped Petitioners financially during the years in question.

12. Petitioners feel that they should not be penalized for circumstances which arose outside of their own doing.

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

The $100 penalty amount remaining on Petitioners' account for the years in question is not waived as Petitioners should have at least filed their returns even though there was an inability to pay.

Additionally, the interest amounts are not waived because it accounts for the amount of money that the state of Utah lost the use of while Petitioners were delinquent.

The earlier reduction in penalties was granted given the circumstances Petitioners described above.

Based upon the foregoing, the Tax Commission finds that sufficient cause has not been shown which would justify a further reduction of the penalties associated with the individual income tax due on the years XXXXX-XXXXX. Interest is not waived. It is so ordered.

Petitioners may contact the Collections Division for payment assistance.

DATED this 10th day of September, 1993.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Roger O. Tew

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner