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