94-0007

Withholding Tax

Signed 10/12/95

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX, )

:

Petitioner, ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

v. ) AND FINAL DECISION

:

AUDITING DIVISION OF THE ) Appeal No. 94-0007

UTAH STATE TAX COMMISSION, :

) Account No.

: XXXXX

Respondent. ) Tax Type: Withholding Tax

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a Formal Hearing on XXXXX. W. Val Oveson, Commission Chairman, heard the matter for and on behalf of the Commission. Present and representing Petitioner was XXXXX, XXXXX. Present and representing Respondent were XXXXX, Assistant Attorney General, XXXXX, XXXXX XXXXX of the Auditing Division and XXXXX, XXXXX.

Based upon the evidence and testimony presented at the hearing, the Tax Commission hereby makes its:

FINDINGS OF FACT

1. The tax in question is withholding tax.

2. The period in question is XXXXX.

3. An audit was conducted by the Respondent for the periods indicated and a Statutory Notice was issued on XXXXX, XXXXX in the amount of $$$$$.

4. The issues involved in the audit assessment are as follows: a. XXXXX of Petitioner was compensated outside of the payroll system. XXXXX received checks from Petitioner and had personal expenses paid by Petitioner. Income tax was not withheld on the compensation paid to the Officer by Petitioner as is required by law. b. A XXXXX penalty was assessed in accordance with the law for intentional disregard of the law, primarily due to failure to withhold on compensation to the Officer. c. A penalty of $$$$$ for each occurrence was assessed, in accordance with the law, for failure to file annual reconciliations on form TC-96.

APPLICABLE LAW

Utah Code annotated, section 59-10-402 requires an employer to withhold income tax on any employee compensation. The statutes read as follows:

(1) Each employer making payment of wages shall deduct and withhold from wages an amount to be determined by a commission rule which will, as closely as possible, pay the income tax imposed by this chapter....

(3) The amount withheld under this section shall be allowed to the recipient of the income as a credit against the tax imposed by this chapter. The amount so withheld during any calendar year shall be allowed as a credit for the taxable year beginning in such calendar year. If more than one taxable year begins in a calendar year, such amount shall be allowed as a credit for the last taxable year so beginning.

ANALYSIS

At the hearing, evidence was presented that convinced the Commission that Petitioner was liable for the withholding tax. A bench ruling was given verbally by Commissioner Oveson to that effect. Petitioner had produced evidence at prior division conferences that caused Respondent to reduce the liability from the statutory notice. Petitioner represented that additional evidence was available to show the liability was less than the adjusted assessment, but he had not brought the evidence with him to the hearing.

Commissioner Oveson requested that another conference be held between Petitioner and Respondent for the purpose of narrowing the amount of the assessment in relation to the additional evidence produced by Respondent.

Respondent has reviewed the information supplied by Petitioner and has agreed with Petitioner on the following assessment: the new assessment of tax is $$$$$, the penalty is $$$$$, and interest computed to XXXXX is $$$$$. There is a credit for taxes paid of $$$$$ and a balance due of $$$$$. Petitioner agrees to pay the $$$$$ balance due upon presentation of this order.

DECISION AND ORDER

Based upon the foregoing, the Tax Commission agrees with the stipulation entered into by Petitioner and Respondent. It is so ordered. Dated this 12th day of October, 1995.

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 a final order to file a Request for Reconsideration with the Commission. If you do not file a Request for Reconsideration with the Commission, you have thirty (30) days after the date of a final order to file a.) a Petition for Judicial Review in the Supreme Court, or b.) a Petition for Judicial Review by trial de novo in district court. (Utah Administrative Rule R861-1A-5(P) and Utah Code Ann. ''59-1-601(1), 63-46b-13 et. seq.)

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