94-1539

Sales

Signed 4/17/96

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX,

Petitioner, : ORDER

v. : Appeal No. 94-1539

COLLECTION DIVISION OF THE : Account No. XXXXX

UTAH STATE TAX COMMISSION, :

Respondent. : Tax Type: Sales

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for an Initial Hearing pursuant to the provisions of Utah Code Ann. §59-1-502.5, on XXXXX. G. Blaine Davis, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing Petitioner was XXXXX, from the law firm of XXXXX. Present and representing Respondent was XXXXX, Assistant Attorney General.

Petitioner had previously filed a Motion for Summary Judgment, supported by the affidavit of XXXXX. Respondent had opposed that Motion for Summary Judgment, and had filed a brief and memorandum in Opposition to the Motion for Summary Judgment, together with affidavits from XXXXX and XXXXX.

Following the filing of both affidavits and the memorandums and motions, the parties stipulated that the matter could be submitted, without oral argument or hearing, upon the information contained in the file.

Based thereon, it is deemed that if each of the individuals who filed an affidavit had been called to the witness stand, their testimony would have been consistent with the affidavit signed and executed by them in this proceeding, and that such matters will be deemed to be the evidence received herein.

Petitioner and a partner operated a pool and spa business in XXXXX County from XXXXX through XXXXX or XXXXX. Petitioner, XXXXX, apparently continued the business after that date, without a partner, although the file is not complete as to the dates of the termination of such business relationship. The sales and use tax were timely filed and paid through the second quarter of XXXXX. For the third quarter of XXXXX, Petitioner did not timely file or pay the sales tax which was due in an amount of $$$$$. Petitioner, XXXXX, attributes the failure to pay to some severe financial difficulties because of certain unnamed activities of his partner.

From and after the third quarter of XXXXX, Petitioner was consistently behind and trying to catch up with the payments. For a very few quarters, he timely filed and paid the amount due with the return. However, for most of the periods, he was making payments on a weekly or other periodic basis, including sometimes having agents stop by his business to pick up funds. There were initially some disputes regarding whether Petitioner had been given credit for all of the payments which had been made, but the parties are now in agreement regarding the receipt and accounting of all of the payments alleged to have been made by Petitioner.

The primary issue remaining in this case is the imposition of penalties and interest as a result of the allocation of those payments by the Collections Division.

Petitioner alleges that the payments which were made following the third quarter of XXXXX delinquency were intended to apply to the current taxable period and to prospective taxable periods, rather than being allocated to the oldest amount due. Petitioner alleges that as a result of the allocation of the payments to the oldest amounts due, that additional penalties and interest were incurred which would not have been incurred had the payments been attributed to the current quarter and the prospective periods.

Petitioner further alleges that he instructed the agents and employees of Respondent to apply the payments to delinquent payments only when he had sufficient monies to pay the current tax and the entire amount of any delinquency. He further represents that he was assured by the agents and employees of Respondent that those instructions with respect to payments would be followed.

Respondent has filed affidavits from XXXXX and XXXXX which set forth the payments and the amounts thereof, but specifically deny that they ever made any agreements or arrangements with Petitioner regarding the application of the payments. They represent that if a sales tax return was received with a payment, that the payment was applied to the sales tax return, but that if a payment was received without a sales tax return, then in accordance with State Tax Commission policies it was applied to the oldest liability. XXXXX further represents that the manner in which the payments were applied was the most beneficial to Petitioner by stopping further interest payments, although he does not represent that it would have prevented any further penalties.

XXXXX also represented that he never made any arrangements with Petitioner regarding the application of the payments. The two affidavits from Respondent indicate that XXXXX and XXXXX were the agents responsible for collecting the tax from the Petitioner.

Petitioner never identified or documented any of his allegations that he had in any way instructed agents of Respondent to apply the payments in a particular way, and he did not identify the agents to whom such statements were allegedly made or any such agreements were allegedly made.

Petitioner has the burden of proof to establish that he is entitled to the relief requested. In this case, Petitioner has failed to sustain the burden of proof.

The Commission finds that the payments have been applied to the oldest debt existing with the Tax Commission, all in accordance with existing Commission policy, and that the accounting is a true, correct and lawful accounting prepared in accordance with state law and Tax Commission procedures.

Petitioner has also requested that he be awarded attorney’s fees in accordance with Section 59-1-1005, Utah Code Annotated, as amended. Petitioner has failed to substantiate with evidence any basis for awarding attorney’s fees in accordance with said statute.

DECISION AND ORDER

Based upon the information presented in this matter, and the records of the Tax Commission, the Tax Commission finds that the payments made by Petitioner have been duly and properly applied to the debts and obligations owed by Petitioner. The Petition for Redetermination filed by Petitioner herein is hereby denied.

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 17 day of April, 1996.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Roger O. Tew

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner