95-0086

Income Tax

Signed 8/17/95

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX, )

:

Petitioner, ) INFORMAL DECISION

:

v. )

:

COLLECTION DIVISION OF THE ) Appeal No. 95-0086

UTAH STATE TAX COMMISSION, :

) Account No. XXXXX

:

Respondent. ) Tax Type: Income Tax

_____________________________________

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 were XXXXX and XXXXX. Present and representing Respondent was XXXXX.

Based upon the evidence in the file and presented at the Informal Hearing, the Commission makes its:

FINDINGS

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

From the statements made by Petitioner's representatives, Respondent and Tax Commission records it appears that the return in question may have inadvertently been included in the mailing to the Internal Revenue Service (IRS). So that Petitioner thought the return was filed with the Tax Commission, but it was not. To further complicate the matter Petitioner had thought he would receive a refund so no check would have been mailed with the original return, although it was later determined by the Tax Commission that taxes were owed.

Respondent stated that because it appeared that the return was mailed inadvertently to the IRS instead of the Tax Commission, and there were no other late filings or payments in Petitioner's account history at the Tax Commission, there was sufficient reasonable cause for waiver of the penalty. However, Respondent stated that the interest should not be waived or reduced because the error was on the part of the Petitioner and not the Tax Commission.

In considering waiver 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 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 exist to waive the penalties of $$$$$ associated with Petitioner's income tax for XXXXX. Sufficient cause does not exist to waive the interest. It is so ordered.

DATED this 17 day of August, 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 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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