93-2119
Corporation Franchise
Signed 6/3/94
BEFORE
THE UTAH STATE TAX COMMISSION
____________________________________
XXXXX,
)
XXXXX : INFORMAL DECISION
Petitioner, )
v. : Appeal No. 93-2119
)
COLLECTION DIVISION OF THE : Account
No. XXXXX
UTAH STATE TAX COMMISSION, )
Respondent. : Tax Type: Corp. Fran.
_____________________________________
STATEMENT
OF CASE
This matter was heard before the Utah State
Tax Commission on XXXXX, in an informal hearing. Lisa L. Olpin, Administrative Law Judge, heard the case for and
on behalf of the Commission. Present
and representing the Petitioner were XXXXX and XXXXX. Present and representing the Respondent was XXXXX of the
Collection Division.
FINDINGS
According to Tax Commission records,
Petitioner filed its XXXXX corporate franchise tax return on XXXXX (late). It filed its XXXXX corporate franchise tax
return on XXXXX (on time). The minimum
payment of $$$$$ for each of the years in question was paid on XXXXX (late).[1]
Later, the Commission assessed Petitioner
$$$$$ in penalties for failing to file and for failing to pay the XXXXX taxes
on time. Another $$$$$ penalty is
pending on the XXXXX tax year for failing to pay timely.[2]
The Commission has subsequently waived a
single $$$$$ penalty on the year XXXXX and a second single $$$$$ penalty on the
year XXXXX.[3]
Remaining on Petitioner's account is the
single $$$$$ penalty for the year XXXXX and all interest assessments for both
XXXXX and XXXXX.[4]
Petitioner is requesting a waiver of these
amounts.
According to Petitioner's representative,
XXXXX, this corporation was formed in XXXXX for genealogical purposes relating
to their family organization. The
family had heard about other family groups incorporating and wanted to do the
same.
At all times, the XXXXX family assumed that
they would be a tax-exempt, non-profit organization.
In XXXXX, Petitioner obtained information
from the Tax Commission about how to go about securing tax-exempt status. The process appeared to be quite involved
with the I.R.S. and cost $$$$$ in fees.
Petitioner's representatives decided that
this whole idea of incorporating was probably "ill-conceived" and
sent a letter in XXXXX to the Department of Business Regulation asking to
"dis-incorporate."
In XXXXX, the Division of Corporations told
Petitioner to first obtain a tax clearance from the Tax Commission and pay a
$$$$$ filing fee.
Petitioner then wrote the Commission that
same month and asked for a waiver of taxes, penalties and interest on corporate
franchise tax for the year XXXXX, XXXXX, and XXXXX because it had not conducted
any business in Utah, had paid no wages and had not received any taxable
income.
The Commission responded on XXXXX and told
Petitioner that taxes could not be waived, but that possibly penalties and
interest would be. Commission employee
XXXXX further added that she would send Petitioner's letter on to the Commissioners
as a request for waiver of penalty and interest.
In XXXXX, Mr. XXXXX met with XXXXX of the
Auditing Division and restated Petitioner's case about not wanting to proceed
as a corporation. Mr. XXXXX understood
from the meeting that Mr. XXXXX would have the corporation dissolved, dating
back to the date of incorporation, thereby resolving Petitioner of all
outstanding tax liabilities.
The corporation was dissolved in XXXXX.
After continuing to receive billings for
corporate franchise taxes due, Petitioner contacted the Commission again in
XXXXX. Again, Petitioner requested a
waiver. It wasn't until XXXXX that the
Commission first told Petitioner that it had to pay the tax amount due before a
waiver of the penalty and interest could be considered.
Petitioner paid the total tax amount due of
XXXXX on XXXXX.
In XXXXX, the Commission informed Petitioner that
it had waived $$$$$ in penalties.
Mr. XXXXX admitted at the hearing that he
knew Petitioner had to file yearly corporate franchise tax returns and submit
the minimum $$$$$ payment. He stated
that Petitioner never had $$$$$ to pay and relied upon the idea that the
foundation would eventually be granted tax-exempt status anyway.
DECISION
AND ORDER
Based upon the testimony and evidence submitted at the hearing in this
case, the Tax Commission finds that sufficient cause has been shown to waive
the remaining XXXXX penalty assessed on corporate franchise tax for the year
XXXXX including interest. The
Commission deems this account paid in full.
It is so ordered.
DATED this 3rd day of June, 1994.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val Oveson Roger
O. Tew
Chairman Commissioner
Joe B. Pacheco Alice Shearer
Commissioner Commissioner
NOTICE:
You have twenty (20) days after the date of the final order to file a
request for reconsideration or thirty (30) days after the date of the final
order to file in District Court a
petition for judicial review.
Utah State Tax Commission Administrative Rule R861-5A-1(p) and Utah Code
Ann. '63-46b-14(3)(a).
^^
[1]Petitioner's
$$$$$ payment on XXXXX was mistakenly credited to the XXXXX corporate franchise
tax year rather than applied $$$$$ apiece to XXXXX and XXXXX.