93-0408 INCOME

 

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX, )

: FINDINGS OF FACT,

Petitioner, ) CONCLUSIONS OF LAW,

: AND FINAL DECISION

v. )

:

AUDITING DIVISION OF THE ) Appeal No. 93-0408

UTAH STATE TAX COMMISSION, :

) Account No. XXXXX

:

Respondent. )

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a prehearing conference on XXXXX, XXXXX. With the consent of the parties, the matter was converted from a prehearing conference to a formal hearing. Paul F. Iwasaki, Presiding Officer, heard the matter for and on behalf of the Commission. Present and representing the Petitioner was XXXXX. Present and representing the Respondent was XXXXX, Assistant Utah Attorney General.

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 year in question is XXXXX.

3. The Petitioner filed her XXXXX Utah income tax return in a timely manner using the resident long form, form TC-40.

4. On line 5 of that form, the Petitioner, relying upon the instructions provided in the booklet, entered the amount of ($$$$). That amount was taken from line 4 of her XXXXX federal return form 1040EZ.

5. In the instructions accompanying the XXXXX Utah individual income tax forms, the taxpayers are instructed that if they filed federal form 1040EZ then they are to enter the amount from line 4 of that form onto line 5 of the Utah return. This is precisely what the Petitioner did.

6. The instructions contained in the income tax forms and instructions booklet were erroneous. A correction to that instruction was made in later versions of that booklet.

7. The ($$$$) claimed on the federal return represented the standard deduction and personal exemption. The correct amount that should have been stated on the Utah return was ($$$$). Because of that error, the Petitioner was assessed additional tax in the amount of ($$$$) as well as interest applied at the statutorily prescribed rate.

8. The Petitioner argued that no additional tax should be imposed. She argued that because the error was made by the Tax Commission in its forms and instructions booklet, the Commission is estopped from assessing the additional tax and interest due.

CONCLUSIONS OF LAW

There is imposed upon every resident individual of the state a state taxable income as defined in sections59-10-111 and59-10-112. (Utah Code Ann. 59-10-104).

"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).

The standard deduction amount in XXXXX for a single taxpayer was ($$$$).

DECISION AND ORDER

In the present case, the Petitioner argued that because she followed the instructions, albeit erroneous instructions, contained in the Tax Commission booklet, she should be allowed to deduction ($$$$) as the standard deduction for that year and not be liable for additional tax due.

Although it is true that the instruction booklet contained an error in its instructions, such fact does not relieve the Petitioner from paying the appropriate amount of tax legitimately due nor does it entitle her to more of a deduction than she is legitimately allowed. Here, both parties agree that the appropriate standard deduction for the year in question was ($$$$), no more and no less.

The Tax Commission finds that although it acknowledges the error in the information booklet, the Petitioner's argument is without merit. The statute is clear in establishing the basis for determining one's taxable income and the Commission does not have the authority to do otherwise. Indeed, if the Petitioner's position were adopted, it would mean that she would receive a windfall as opposed to paying the appropriate amount of tax which is legitimately due.

The Tax Commission does find however that sufficient cause exists to waive the amount of interest imposed for the year in question.

Based upon the foregoing, the Tax Commission affirms the determination of the Auditing Division to the extent that it established a income tax deficiency for the year in question. The Tax Commission also finds, however, that sufficient cause exists with which to waive the interest associated with that period. It is so ordered.

DATED this 22nd day of June, 1993.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

R. H. Hansen Roger O. Tew

Chairman Commissioner

Joe B. Pacheco S. Blaine Willes

Commissioner Commissioner