BEFORE THE UTAH STATE TAX COMMISSION
Petitioner, : ORDER
v. : Appeal No. 93-0742
AUDITING DIVISION OF THE : Account No. XXXXX
UTAH STATE TAX COMMISSION, :
Respondent. : Tax Type: CORPORATE FRANCHISE
STATEMENT OF CASE
This matter came before the Utah State Tax Commission for an Initial Hearing pursuant to the provisions of Utah Code Ann. §59-1-502.5, by way of submission from the parties based upon the briefs and information provided. G. Blaine Davis, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present in a telephone conference held on XXXXX and representing Petitioners were XXXXX and XXXXX. Present and representing Respondent were XXXXX, Assistant Attorney General, together with XXXXX, XXXXX, and XXXXX from the Auditing Division.
Respondent performed an audit on the books and records of Petitioner for the audit period XXXXX through XXXXX. As a result of the audit, an assessment of $$$$$ was made for additional Corporation Franchise tax, together with interest thereon at the statutory rate. The audit assessment was made on XXXXX.
Prior to the date of the audit assessment, the Petitioner had filed in the Bankruptcy Court for the XXXXX a bankruptcy petition for reorganization under Chapter 11 of the Bankruptcy Code. The Petition for Reorganization was filed on XXXXX and a Plan of Reorganization was confirmed on XXXXX. Respondent was aware of the filing of the bankruptcy petition, but Respondent never filed a Proof of Claim pursuant to Section 501(a) of the Bankruptcy Code. Therefore, the Plan of Reorganization did not provide for any payments to the state of Utah. The Bankruptcy Court in Texas entered an Order confirming the Plan of Reorganization, which did not provide for any payments to the Utah State Tax Commission for the tax which is at issue in this proceeding.
The parties were given an opportunity to file briefs relating to the issue. Petitioner filed substantial documentation including copies of the bankruptcy court documents, but Respondent did not file a brief relating to the issue. However, in a subsequent telephone call with XXXXX, Assistant Attorney General, representing Respondent, it was indicated that he believes the debt was probably discharged by the bankruptcy court, and did not feel it was worth his time to file a brief to try to argue otherwise.
Petitioner does dispute the correctness of the assessment of additional Corporate Franchise taxes, but argues that in view of the discharge of the bankruptcy court that regardless of any determination by the Commission, any amount of such taxes has been discharged so that it is a useless effort to determine the issues related to the correctness of the audit assessment.
DECISION AND ORDER
Based upon the foregoing, including the documents and information presented by the Petitioner and the Respondent’s concurrence that it has likely been discharged, the Commission finds that the taxes imposed by said audit assessment have been discharged and that the case is therefore moot and should not go forward. The appeal is therefore dismissed, with instructions to abate any tax, penalty and interest assessed by the audit.
This decision does not limit a party's right to a Formal Hearing. However, this Decision and Order will become the Final Decision and Order of the Commission unless any party to this case files a written request within thirty (30) days of the date of this decision to proceed to a Formal Hearing. Such a request shall be mailed to the address listed below and must include the Petitioner's name, address, and appeal number:
Utah State Tax Commission
210 North 1950 West
Salt Lake City,
Failure to request a Formal Hearing will preclude any further administrative action or appeal rights in this matter.
DATED this 17 day of April, 1996.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val Oveson Roger O. Tew
Joe B. Pacheco Alice Shearer