BEFORE THE UTAH STATE TAX COMMISSION
In Re: )
: INFORMAL DECISION
: Appeal No. 93-1727
: Account No. XXXXX
STATEMENT OF CASE
This matter came before the Utah State Tax Commission pursuant to the Administrative Procedures Act and the rules of the Utah State Tax Commission for informal proceedings. As provided for by Utah Code Ann. '63-46b-5, this decision is based upon information contained in the Tax Commission's file.
Petitioner is requesting a waiver of penalty and interest assessments on the corporate franchise tax due on the year XXXXX.
For the tax year XXXXX, Petitioner filed its state and federal subchapter S corporate franchise tax returns on XXXXX. A copy of a federal extension request for the same year was attached to the state return. No payment was remitted with this return, however.
The Internal Revenue Service later refused to accept Petitioner's federal subchapter S corporate return for the year in question because there was no documentation to support a finding that Petitioner had elected subchapter S corporation status.
Petitioner itself admits that it could not locate any evidence that an election had been made, so it filed a corporate return with the I.R.S. in XXXXX for the year XXXXX. At the same time, Petitioner filed its counterpart with the state, submitting a $$$$$ payment for the minimum tax due.
The Tax Commission assessed Petitioner a $$$$$ late filing penalty and a $$$$$ late payment penalty. A $$$$$ legal fee was also added along with interest.
DECISION AND ORDER
In this case, Petitioner should have prepaid on $$$$$ in order to validate the extension request. (Utah Code Ann. '59-7-126.) Petitioner left itself open to penalties thereafter. While Petitioner explains the confusion over the subchapter S corporate filings, a degree of lateness is involved at every turn.
Based upon the foregoing, the Tax Commission finds that a single $$$$$ penalty is in order and waives the second $$$$$ penalty for reasonable cause on the XXXXX corporate franchise tax. The interest and legal fee are not waived. It is so ordered.
DATED this 17th day of December, 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).