94-1609

Income
Signed 2/27/95

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX, )

:

Petitioner, : ORDER

:

v. : Appeal No. 94-1609

:

: Account No. XXXXX

COLLECTION DIVISION OF THE, :

UTAH STATE TAX COMMISSION, :

Respondent. : Tax Type: Income

_____________________________________

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. Present and representing Respondent was XXXXX.

Petitioner is appealing the assessment of penalties in the amount of $$$$$ and interest in the amount of approximately $$$$$ for the late filing and payment of individual income taxes for the tax years $$$$$ and XXXXX. The Collection Division Waiver Unit had denied Petitioner's request for a waiver of the penalties and interest.

Petitioner stated that he was a graduate student in Utah during the years in question and had received incorrect information as to the tax treatment of funds he earned in the state for research. Petitioner felt that since the underlying amount of the deficiency was only $$$$$ the penalties totalling $$$$$ were excessive. Further, Petitioner stated that after the Tax Commission had contacted him about his tax treatment of his XXXXX income he requested that they also look at his XXXXX income which had the same issues as the XXXXX income.

Respondent stated that the penalty was excessive in relation to the underlying tax. Respondent recommended decreasing the penalties for XXXXX to a $$$$$ failure to file, $$$$$ failure to pay and the $$$$$ lien filing fee. Respondent recommended reducing the penalties for XXXXX to a $$$$$ failure to file and a $$$$$ failure to pay fee. Respondent stated that ignorance of the tax law does not constitute reasonable cause sufficiently to waive any further penalty.

The State of Utah was deprived of the use of the funds for the underlying taxes from the time they should have been paid until the time the Petitioner paid the amount owed.

Upon realizing that the issues would be similar, Petitioner did contact the Tax Commission about resolving the XXXXX taxes prior to any action by the Tax Commission concerning that year.

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 the penalties assessed for individual income taxes for XXXXX tax year to a $$$$$ late filing fee, a $$$$$ late payment fee and a $$$$$ lien filing fee for a total of $$$$$ in penalties. Sufficient cause has been shown concerning the penalties assessed for individual income taxes for the XXXXX tax year to waive the penalty for late filing and reduce the penalty for late payment to $$$$$. Sufficient cause has not been show to waive or reduce the interest assessed for the XXXXX and XXXXX individual income tax filings.

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 27 day of February, 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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