93-0900
Sales
& Withholding
Signed 4/13/94
BEFORE
THE UTAH STATE TAX COMMISSION
____________________________________
XXXXX, )
:
Petitioner, ) ORDER
:
v. ) Appeal No. 93-0900
:
COLLECTIONS
DIVISION OF THE ) Account Nos. XXXXX
UTAH
STATE TAX COMMISSION, : and XXXXX
)
Respondent. :
_____________________________________
STATEMENT OF
CASE
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.
DECISION AND
ORDER
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.
BY ORDER
OF THE UTAH STATE TAX COMMISSION.
W. Val
Oveson Roger O. Tew
Chairman Commissioner
Joe B.
Pacheco Alice Shearer
Commissioner Commissioner
^^