94-1619

Income

Signed 3/28/95

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX

Petitioner, ) INFORMAL DECISION

:

v. )

:

COLLECTION DIVISION OF THE ) Appeal No. 94-1619

UTAH STATE TAX COMMISSION, :

) Account No. XXXXX

:

Respondent. ) Tax Type: Income

_____________________________________

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 by telephone conference call was XXXXX. Present and representing Respondent was XXXXX.

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

FINDINGS

Penalties of $$$$$ and interest of $$$$$ were assessed against Petitioner relating to Petitioner's income tax for the year XXXXX. Petitioner had requested a waiver of the penalties and interest from the Collection Division Waiver Unit which was denied. Petitioner now appeals this denial.

At the hearing Petitioner stated that after she and her husband divorced she left Utah in XXXXX. Petitioner's only income during the year in question was alimony and income from an IRA that she cashed in so she could afford to move to California. Petitioner stated that she had no knowledge of her filing obligations in XXXXX. Her father had filed all her taxes when she was single and when she was married her husband took care of the filing. Petitioner was notified by the Internal Revenue Service (IRS) that she needed to file a return for XXXXX, but because Petitioner did not have the money to pay any of the taxes owed she did not file with the IRS until XXXXX.

Petitioner determined that she wanted to resolve the issue of her XXXXX income tax with the State of Utah so she contacted the Tax Commission in the spring of XXXXX for the applicable XXXXX forms. At that time she was told that penalties and interest had been assessed. Petitioner stated this contact to the state was prior to Petitioner's receiving any communication from the state. Respondent said this was because the Tax Commission did not have Petitioner's correct address. Petitioner stated that requiring her to pay the penalty and interest would create severe financial hardship as her only income now is child support and public assistance.

Respondent stated that Petitioner had not shown sufficient reasonable cause to waive either the penalty or interest. Respondent stated that neither ignorance of the law nor financial hardship are considered to be reasonable cause.

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 they underlying taxes were due until they were actually paid by Petitioner.

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).)

DECISION AND ORDER

The Tax Commission finds sufficient cause does not exist to waive the $$$$$ penalty and approximately $$$$$ in interest relating to Petitioner's income tax for the tax year XXXXX.

DATED this 28 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

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. '63-46b-15.)

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