BEFORE THE UTAH STATE TAX COMMISSION
In Re: )
: INFORMAL DECISION
: Appeal No. 93-0996
: Account No. XXXXX
STATEMENT OF CASE
This appeal came before the Utah State Tax Commission for hearing on XXXXX, Alan Hennebold, Administrative Law Judge, presiding. XXXXX participated by telephone on her own behalf.
Ms. XXXXX asks the Commission to waive both a $$$$$ "legal fee" and interest assessed against her for late payment of her XXXXX Utah individual income tax.
Ms. XXXXX reported her XXXXX federal income tax liability on IRS Form 1040EZ. Item 4 of that form instructed her to enter $$$$$ as her total standard deduction and personal exemption. In filing her Utah income tax return, she deducted $$$$$ as her standard deduction, then deducted an additional $$$$$ as a personal exemption. In doing so, she in effect claimed an extra personal exemption and therefore under-reported her state taxable income. As a result of her error, Ms. XXXXX reported a tax liability of $$$$$ and claimed a refund of $$$$$.
The error was not discovered by Tax Commission staff until mid-XXXXX. When Ms. XXXXX was notified that she owed $$$$$ in additional income tax, she immediately called Tax Commission staff for further explanation. She then agreed to pay the additional tax in installments. Her first payment was received on XXXXX, as scheduled.
The same day that Ms. XXXXX made her first installment payment, a $$$$$ "late payment" penalty was assessed against her. On XXXXX, Commission staff filed a tax warrant against her, thereby incurring a $$$$$ filing fee which was added to her penalty assessment.
The Commission has since waived the $$$$$ penalty. The assessment of interest and the $$$$$ legal fee remain in place.
DECISION AND ORDER
The Commission has already waived the $$$$$ late payment penalty in this matter. Ms. XXXXX also seeks waiver of the $$$$$ "legal fee" that was incurred when Commission staff filed a tax warrant against her. The Commission notes that by the time the warrant was filed, Ms. XXXXX had entered into a payment agreement and had made the first required payment. Furthermore, the tax due on her account was only $$$$$. Under such circumstances, the Commission concludes it was unnecessary to file the warrant and incur the filing cost. The Commission therefore waives the $$$$$ legal fee.
As to Ms. XXXXX's request that interest be waived, interest is a reasonable charge for use of tax funds after such funds should have been paid to the Commission. The Commission finds no basis for waiving interest in this case.
The Collection Division is instructed to compute the current balance of Ms. XXXXX's XXXXX income tax liability in accordance with this decision and advise her of any debit or credit balance in the account. It is so ordered.
DATED this 10th 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 the final order to file in District Court a petition for judicial review. Utah State Tax Commission Administrative Rule R861-5A-1(p) and Utah Code Ann. '63-46b-14(3)(a).