BEFORE THE UTAH STATE TAX COMMISSION
In Re: )
XXXXX, ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
) AND FINAL DECISION
) Appeal No. 93-0604
: Account No. XXXXX
STATEMENT OF CASE
This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. Lisa L. Olpin, Presiding Officer, heard the matter for and on behalf of the Commission. Representing the Petitioner was XXXXX, Petitioner's certified public accountant.
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 period in question is the year XXXXX.
3. According to Tax Commission records, Petitioner filed and paid his XXXXX individual income tax ($$$$$) on XXXXX. At the time, Petitioner had $$$$$ in withholding tax credit; he paid the additional $$$$$ with the late return.
4. As a result of the failure to make a prepayment with his extension request, the Commission assessed Petitioner $$$$$ in penalties. Interest was also assessed.
5. The Commission then assessed Petitioner another $$$$$ penalty for failing to pay the interest and penalty amounts when he submitted his late return.
6. Petitioner testified that he failed to file his return by the
XXXXX due date because he was in Alaska on a court subpoena from XXXXX to XXXXX. His accountant had delivered the return to Petitioner for mailing, but the return was given to Petitioner's child who didn't inform Petitioner in time.
7. When Petitioner returned from Alaska, he mailed in the return and payment.
8. Petitioner's certified public accountant, XXXXX, stated that no pre-payment was made in this case because he thought that Petitioner had enough withholding credits to cover this extension request obligation. (It is further noted that Petitioner had a tax liability of XXXXX in the preceding year XXXXX).
9. As it turned out, Petitioner received a cash distribution from a limited partnership that he was not expecting, increasing his tax liability.
10. The I.R.S. waived the late penalty it had assessed Petitioner, but retained the underpayment of tax penalty and interest charges.
11. Petitioner is requesting a waiver of the penalty amount only.
CONCLUSIONS OF LAW
Relevant Utah law states:
(1)(a) The commission shall allow an extension of time, not exceeding six months, for filing returns. Payment of the amount of the tax estimated to be due, less credit for W-2 withholding or other prepayments, shall be made on or before the 15th day of the fourth month following the close of the taxpayer's taxable year.
(b) The payment accompanying the extension request shall be at least 90% of the total tax reported on the income tax return when it is filed or the same as the total amount of tax paid on the income tax return for the previous year.
(c) If the amount of payment is less than 90% of the total tax reported on the income tax return when it is filed or is less than the amount of total tax paid on the income tax return for the previous year, the commission may apply a penalty to the total of the balance due as provided in Section 59-1-401. (Utah Code Ann. '59-10-516(1)(a)(b)(c).)
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 this case, the Tax Commission assessed Petitioner the $$$$$ penalty for failure to pre-pay as the statute cited above directs. Sufficient cause has not been shown to justify a waiver of this penalty.
The $$$$$ late penalty reflects Petitioner's failure to remit the interest ($$$$$) that accumulated from XXXXX with the tax payment.
Given the circumstances of this case with inaccurate advice from Petitioner's accountant as a factor, the Commission waives the $$$$$ penalty. Interest is computed from the due date to the payment date of XXXXX. It is so ordered.
DATED this 24th day of September, 1993.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val Oveson Roger O. Tew
Joe B. Pacheco Alice Shearer
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).