Sales & Withholding

Signed 4/13/94







Petitioner, ) ORDER


v. ) Appeal No. 93-0900





Respondent. :




This matter came before the Utah State Tax Commission for a Settlement Conference pursuant to the provisions of Utah Code Ann. '59-1-502.5, on XXXXX. Lisa L. Olpin, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing the Petitioner was attorney XXXXX. Present and representing the Respondent was XXXXX, Assistant Utah Attorney General.

The Collections Division assessed Petitioner personally for sales tax, waste tire tax and withholding tax for the period XXXXX in the amount of $$$$$ plus interest. Petitioner contends that he is not personally liable for this amount.

Petitioner was the president and vice-president of XXXXX during the period referred to above.[1]

According to Petitioner, prior to XXXXX he was an employee of XXXXX. His primary responsibility was to seek out distressed companies that a company named XXXXX might want to acquire.

While employed with XXXXX, XXXXX asked him if he would act as the president of a number of these newly acquired distressed companies on behalf of the parent company who apparently, at all times, was XXXXX.

Petitioner agreed to do so. In the present case, he served as president and vice-president of XXXXX while working for XXXXX. His office was located at XXXXX.

Also, during the period in question, Petitioner was corporate secretary for XXXXX.

As president and vice-president for XXXXX, Petitioner claims that he had very little to do with the actual running of this company. On infrequent occasions, someone from XXXXX would bring him a check to sign when the general manager, XXXXX, was unavailable for signature. He states he never attended a board meeting. In fact, he only went over to the XXXXX location two or three times.

Petitioner recalled signing a tax form once and asking XXXXX, an accountant at XXXXX, if there were sufficient funds to pay the amount due. He remembers Ms. XXXXX stated that funds were on their way. Later, he said she told him that the tax was paid.

Petitioner stated that XXXXX had been hired prior to the time he started as president of the company. Mr. XXXXX was responsible for hiring and firing employees, stocking inventory, doing payroll, maintaining bookkeeping and paying debts and generally everything else necessary in running a business.

XXXXX worked with Mr. XXXXX and had checksigning authority.

Petitioner further stated he was under the impression that the business was "moving smoothly" in XXXXX and XXXXX.

In XXXXX, Mr. XXXXX entered XXXXX into a $$$$$/month contract for a yellow page ad. Petitioner told him he could no longer obligate XXXXX in contracts without Petitioner's approval.

Also in XXXXX, Petitioner asked Ms. XXXXX for the current financial status of the business. She could not tell him what the outstanding receivables or payables were, or where the business was financially. She said she needed time to assimilate the information.

In or about XXXXX, XXXXX sent an accountant to XXXXX to check its books and records. Petitioner then learned that Mr. XXXX had given both himself and Ms. XXXXX unauthorized raises. Additionally, Mr. XXXXX had purchased a $$$$$ flagpole and a cellular phone without approval.

Petitioner believes that Mr. XXXXX also is probably liable for $$$$$ in missing auto parts and cash.

Mr. XXXXX was fired in XXXXX. Ms. XXXXX was fired in XXXXX.

At some point in time, XXXXX was hired as general manager, replacing Mr. XXXXX. He discovered that tax returns had not been filed for the quarters involved nor had payment been made.

All of the remaining assets at XXXXX were repossessed when the company went under. It may well be that at least one, if not more, of XXXXX creditors was a subsidiary company of XXXXX. The I.R.S. took control over some of the accounts receivable.

Petitioner maintains that he cannot be obligated for the personal assessment under the facts given above.


Based upon the information presented at the conference, and the records of the Tax Commission, the Commission determines that Petitioner is liable for the personal penalty as assessed by the Collections Division.[2]

This Decision and Order will become the Final Decision and Order of the Commission unless any party to this case files a written request for a Formal Hearing within ten (10) days of the date of this decision. 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

Appeals Division

160 East 300 South

Salt Lake City, Utah 84134


It is so ordered.

DATED this 13th day of April, 1994.


W. Val Oveson Roger O. Tew

Chairman Commissioner


Joe B. Pacheco Alice Shearer

Commissioner Commissioner




    [1]XXXXX began business on XXXXX.

    [2]Controlling law is found at Utah Code Ann. '59-1-302(9)(a-c)