93‑0477
Income
Signed 6/22/93
BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX, ) FINDINGS OF FACT,
Petitioner, ) CONCLUSIONS OF
LAW,
) AND FINAL DECISION
v. )
) Appeal No. 93‑0477
AUDITING
DIVISION OF THE )
UTAH STATE TAX
COMMISSION, ) Account No. XXXXX
Respondent. )
_____________________________________
STATEMENT OF
CASE
This matter came before the Utah State
Tax Commission for a formal hearing on XXXXX.
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 income tax.
2.
The period in question is XXXXX.
3.
The Petitioner timely filed his XXXXX income tax return.
4.
Subsequent to the filing of the return, the Internal Revenue Service
determined that certain income had been unreported and assessed additional tax
due on the unreported income.
5.
The Petitioner's representative at the hearing stated that the
additional income was the result of a Caribbean Cruise which had been given to
the Petitioner by his son who had been awarded the cruise as a result of
business dealings.
6.
The Petitioner did not challenge the IRS determination that the value of
the trip was attributable as income to the Petitioner.
7.
Records of the Tax Commission show that the Tax Commission was notified
by the IRS of the changes to the Petitioner's XXXXX income tax return. Records
further show that the Petitioner did not report such changes to the Tax
Commission.
8.
Notice of the additional tax due was sent to the Petitioner by way of a
notice dated XXXXX. The deficiency was
not paid until XXXXX. As a result of
the failure to notify the Commission of the changes to the federal income tax
return, the Petitioner was assessed a XXXXX percent penalty. The Petitioner was also assessed an
additional XXXXX percent penalty for failure to pay the assessment within
thirty days. The total penalty assessed
was $$$$$. The Petitioner was also
assessed interest applied at the statutorily prescribed rate.
9.
The Petitioner had been relying upon his accountant to handle these
matters. That accountant had since
passed away. Therefore, it is unknown
why the Petitioner did not notify the Commission of the change in a timely
manner nor is it known why the deficiency was not paid within the thirty day
period.
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
In the present case, while there may
be some question as to whether the trip was a gift to the Petitioner from his
son and therefore not taxable income, the Petitioner has not challenged such a
finding with the Internal Revenue Service nor was sufficient information
brought forth at the hearing to make such a determination. Therefore, the Tax Commission is constrained
to accept the determination of the Internal Revenue Service in its
determination that the value of the trip was includable as taxable income to
the Petitioner. The Tax Commission does find, however, that sufficient cause
exists with which to reduce the penalty to XXXXX percent for the period in
question. It is so ordered.
DATED this 22 day of June, 1993.
BY ORDER OF THE
UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Chairman Commissioner
ABSENT
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 final order to file in Supreme Court a Petition for Judicial
Review. Utah Code Ann. ''63-46b-13(1), 63-46b-14(2)(a).
^^