Signed 3/22/95


                                     BEFORE THE UTAH STATE TAX COMMISSION




Petitioner,                                 )           INFORMAL DECISION


v.                                                                     )


COLLECTION DIVISION OF THE              )           Appeal No. 94-1373

UTAH STATE TAX COMMISSION,            :                      

)           Account No. XXXXX


Respondent.                             )           Tax Type:  Income Tax



                                                          STATEMENT OF CASE

This matter came before the Utah State Tax Commission pursuant to the Administrative Procedures Act and the rules of the Utah State Tax Commission for informal proceedings.  An informal hearing was held on  XXXXX.   Jane Phan, Administrative Law Judge, heard the matter for and on behalf of the Commission.   Present and representing Petitioner was XXXXX.  Present and representing Respondent was XXXXX.

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


Penalties of $$$$$ and interest of approximately $$$$$were assessed against Petitioner relating to Petitioner's late filing and payment of income taxes for the tax year XXXXX.   Petitioner had requested a waiver of the penalties and interest from the Collection Division Waiver Unit which was denied.  The underlying amount of income tax owed by Petitioner for the XXXXX tax year was $$$$$.

At the hearing Petitioner stated that she did not work at anytime during XXXXX and her only income for that year was from state unemployment payments.  Petitioner stated that she did not know that she had  to file a return and pay taxes on the unemployment income and as soon as she was notified by the Tax Commission of this requirement she did so.

Respondent stated that ignorance of the law is not reasonable cause for the purpose of waiving penalties and interest.  However, Respondent conceded that the penalty was excessive compared to the amount of the underlying taxes and recommended reducing the penalty to $$$$$.                APPLICABLE 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(10).)


The Tax Commission finds sufficient cause does exist to reduce the penalties from $$$$$ to $$$$$ for the Petitioner's income tax for the year XXXXX.  Sufficient cause does not exist to waive the interest.

DATED this 22 day of March, 1995.


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(1), 63-46b-14(3)(a).)