94-1470

Income Tax

Signed 3/28/95

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX, )

:

Petitioner, : ORDER

:

v. : Appeal No. 94-1470

:

COLLECTION DIVISION OF THE : Account No. XXXXX

UTAH STATE TAX COMMISSION, :

:

Respondent. : Tax Type: Income Tax

_____________________________________

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. Jane Phan, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing Petitioner by telephone conference call was XXXXX XXXXX. Present and representing Respondent was XXXXX.

Penalties in the amount of $$$$$ and interest in the amount of approximately $$$$$ were assessed against Petitioner relating to his filing of income tax for the tax year XXXXX. The amount of the underlying income tax owed for the year in question was $$$$$. Petitioner requested a waiver of the penalties and interest from the Collection Division Waiver Unit which was denied.

At the conference Petitioner stated that his late filing for XXXXX was due to XXXXX. Petitioner had understood that XXXXX XXXXX tax year. Petitioner thought that his accountant had filed for an extension. Petitioner said that although he and his attorney had made XXXXX the return. Petitioner provided copies of some of the correspondence whereby he had attempted to obtain his XXXXX. Petitioner said that it was not until XXXXX, that Petitioner was notified that XXXXX. Petitioner 's accountant then had to prepare a new return for Petitioner. Petitioner finally filed and paid his XXXXX income tax on XXXXX. Petitioner stated that requiring him to pay the penalty and interest would cause severe financial hardship for himself XXXXX.

Respondent stated that the extension was invalid because no estimated payments were made. Since the extension was invalid, the tax should have been paid on XXXXX and it was not paid until XXXXX. Respondent acknowledged that Petitioner had relied on his accountant to file the extension properly and stated that Petitioner had a good payment history prior to the year in question. For these reasons Respondent recommended reducing the penalties to $$$$$.

In considering Petitioner's request for waiver or reduction of the interest the Tax Commission applies more stringent reasonable cause standards because Petitioner continued to enjoy the benefit of the use of the funds and the State of Utah was denied the benefit of the use of the funds from the time the underlying taxes were due until they were actually paid by Petitioner.

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 reduce from $$$$$ to $$$$$ the penalties assessed for Petitioner's XXXXX income tax. Sufficient cause has not been shown to waive the interest.

This decision does not limit a party's right to a formal hearing. However, this Decision and Order will become the Final Decision and Order of the Commission unless any party to this case files a written request within thirty (30) days of the date of this decision to proceed to a Formal Hearing. 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

Appeals Division

210 North 1950 West

Salt Lake City, Utah 84134

Failure to request a Formal Hearing will preclude any further administrative action or appeal rights in this matter.

DATED this 28th day of March, 1995.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Roger O. Tew

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner

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