BEFORE THE UTAH STATE TAX COMMISSION
Petitioner, : ORDER
v. : Appeal No. 93-2311
COLLECTIONS DIVISION OF THE : Account No. XXXXX
UTAH STATE TAX COMMISSION, :
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 XXXXX, owner. Present and representing the Respondent was XXXXX.
According to Tax Commission records, Petitioner filed its first and second quarter XXXXX and XXXXX sales and use tax returns in XXXXX. Petitioner began making payments pursuant to a payment agreement soon thereafter.
As a result of the late filings and late payments, however, the Tax Commission assessed Petitioner double ten percent penalties on each filing period in question. Interest was also added.[i]1
Petitioner is requesting a waiver of the penalty and interest assessments.
XXXXX, the owner of XXXXX, explained that his business was audited by its workmen's compensation carrier in the latter part of XXXXX. This audit revealed an error that caused Petitioner to owe an additional $$$$$ in premium for the three year audit period.
In XXXXX, the State Insurance Fund sent a notice of intent to cancel based upon the unpaid assessment to Petitioner. Mr. XXXXX was never apprised of this notice from the bookkeeper.
Then, in early XXXXX, after one of Petitioner's employees was injured on the job, Mr. XXXXX found out that Petitioner's workmen's compensation coverage had been canceled.
The Industrial Commission then threatened to levy fines. Petitioner scrambled to obtain coverage which was costly to secure. In the meantime, Petitioner paid the employee's medical bills and weekly compensation.
Mr. XXXXX fired his bookkeeper for negligence and managed to pay Petitioner's debts "of the demand variety." In XXXXX, Petitioner hired a new bookkeeper.
Mr. XXXXX explained that he was in a situation where he chose to use the taxes collected to keep the business open rather than to allow the company to "be shut down through the intervention of the State Industrial Commission and risk the welfare of my employees."
Further, Mr. XXXXX expressed his belief and concern that the Auditing Division of the Tax Commission has selected him for audit as a result of these late payments and filings. He feels that the Commission is harassing his business and subjecting it to prolonged audits without cause.
Petitioner had only one late penalty prior to the periods in question and has remained in compliance ever since.
DECISION AND ORDER
Based upon the information presented at the conference, and the records of the Tax Commission, the Commission finds sufficient cause has been shown to waive a single ten percent penalty on each of the periods in question, i.e., the first quarter of XXXXX, the second quarter of XXXXX and the month of XXXXX. Interest is not waived.
Further, regarding Petitioner's contention that the Auditing Division is somehow after the business because of the late returns and payments, it is the understanding of the Administrative Law Judge that Mr. XXXXX assisted Mr. XXXXX in contacting the Auditing Division to resolve these issues.
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
160 East 300 South
Salt Lake City, Utah 84134
It is so ordered.
DATED this 24th day of May, 1994.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val Oveson Roger O. Tew
Joe B. Pacheco Alice Shearer
[i] 1Petitioner owed $$$$$ in sales tax for the first quarter XXXXX, $$$$$ for the second quarter XXXXX, and $$$$$ for XXXXX. The double penalties are each ten percent of these amounts.