Corporation Franchise

Signed 6/3/94








Petitioner, )

v. : Appeal No. 93-2119




Respondent. : Tax Type: Corp. Fran.




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.


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.


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.


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.

[2]As soon as the XXXXX payment credits $$$$$ to the XXXXX tax year, the computer system will update and automatically assess the $$$$$ late payment fee.

[3]Again, the computer will automatically update this information.

[4]At the informal hearing in this matter, the amount of the remaining penalty in question was thought to be $$$$$ plus interest. A subsequent review of this account shows this is not the case.