BEFORE THE UTAH STATE TAX COMMISSION
) INFORMAL DECISION
COLLECTION DIVISION OF THE :
UTAH STATE TAX COMMISSION, ) Appeal No. 94-0199
Respondent. : Account No. XXXXX
STATEMENT OF CASE
This matter came before the Utah State Tax Commission for an informal hearing on XXXXX. G. Blaine Davis, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing the Petitioner was XXXXX. Present and representing the Respondent was 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 income tax.
2. The periods in question are XXXXX.
3. The Petitioner is XXXXX and operates a business, and when his XXXXX income tax return became due, he was undergoing an audit from the Internal Revenue Service. Therefore, to avoid the necessity of having to pay the accountants to prepare the returns, and to do it all over again at the conclusion of the federal audit, he wanted to wait until the conclusion of the federal audit before filing his returns.
4. The primary issues involved in the federal audit were the XXXXX, and the Petitioner felt that the final outcome of the federal audit would likely cause a change in the tax return for XXXXX.
5. At the conclusion of the audit, the Petitioner timely filed an amended return for XXXXX, and then filed his XXXXX income tax return on XXXXX. The Petitioner had previously requested an extension of time, but the extension had expired prior to the completion of the federal audit.
6. The Petitioner requested a waiver of the penalty from the Internal Revenue Service because of the federal audit, and the Internal Revenue Service agreed to waive all of the penalties associated with XXXXX.
7. For XXXXX, the Petitioner submitted a timely extension request and then filed his income tax return on XXXXX. However, there had not been sufficient prepayment or withholding to comply with the prepayment requirement for an extension, so Petitioner was assessed a penalty of XXXXX of the amount of the underpaid tax.
8. Petitioner did not have any reason for the underpayment of the tax, except that he did not believe the tax would be so large, because it was abnormally high, and he did not know the amount of the tax until he completed the XXXXX for his return.
9. Up until XXXXX, the Petitioner had an excellent record of compliance and had always been timely for the filing and payment of his returns prior to the XXXXX return.
CONCLUSIONS OF LAW
The Tax Commission is granted the authority to waive, reduce, or compromise penalties and interest upon a showing of reasonable cause. (Utah Code Ann. '59-1-401(8).)
DECISION AND ORDER
Based upon the foregoing, the Tax Commission finds that sufficient cause has been shown to justify a waiver of the penalty associated with the XXXXX income tax return, but sufficient cause has not been shown to justify a waiver of the penalty associated with the XXXXX return. It is so ordered.
DATED this 26th day of July, 1994.
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 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 Petition for Judicial Review by trial de novo in district court. (Utah Administrative Rule R861-1-5A(P) and Utah Code Ann. ''63-46-14(3)(a) and 63-46b-15.)