94-1385 & 94-1386

Personal Penalty
Signed 10/4/95






Petitioner, : ORDER


v. :


COLLECTION DIVISION OF THE : Appeal Nos. 94-1385 &


: Account No. XXXXX

Respondent. : Tax Type: Personal Penalty



This matter came before the Utah State Tax Commission for oral arguments on whether or not the Commission should approve the Stipulation submitted by the parties on XXXXX. The hearing was held on XXXXX. Alice Shearer, Commissioner, and Jane Phan, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing the Petitioner were XXXXX, and XXXXX. Present and representing the Respondent were XXXXX, Assistant Attorney General, and XXXXX and XXXXX of the Collection Division.

At the hearing the representative for Respondent explained that after taking a significant amount of time and effort in the discovery process it was determined that Respondent's position for basing the personal penalty assessment against Petitioner was week and that the assessment should be withdrawn. Respondent's representative stated that there were basically three reasons for making this determination. One, after reviewing discovery and deposing the Petitioner, Respondent did not think it could show the "willfulness" required in upholding a personal penalty assessment. Second, Respondent determined the assessment would be virtually uncollectible. Third, some of the assessment was barred by the applicable statute of limitations.

Respondent's representative explained that after they had made the determination that their position was week, expending a significant amount of time and expense, Petitioner made its settlement offer. To recoup some of the costs expended Respondent had agreed to accept $$$$$ as settlement. Respondent's representatives stated that if Petitioner had not made the settlement offer the entire assessment against Petitioner would have been withdrawn. Respondent explained that it felt keeping the $$$$$ was justified due to the expenses it had incurred.

At the hearing Petitioner's representative added that it had made the settlement offer on behalf of Petitioner because of the costs involved in defending Petitioner against the assessment.


Based on the information presented at the hearing it appears that the assessment against Petitioner should have been withdrawn after Respondent determined that it could not sufficiently support the assessment. The Commission will not accept any funds as a settlement on an assessment that it cannot support. Approval of the Stipulation dated XXXXX is denied. Respondent is ordered to refund Petitioner's payment of $$$$$ with interest. Further, Respondent is ordered to withdraw the personal penalty assessment against Petitioner relating to sales, use and withholding tax for XXXXX, for the period of XXXXX through XXXXX, the audit periods of XXXXX through XXXXX and XXXXX through XXXXX. It is so Ordered

DATED this 4 day of October, 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).)