95-0091

Income Tax

Signed 8/7/95

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX, )

:

Petitioner, : ORDER

:

v. : Appeal No. 95-0091

:

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 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.

A Penalty of $$$$$ and interest of approximately $$$$$ were assessed against Petitioner relating to income tax for the year ending XXXXX. Petitioner had requested a waiver of the penalties and interest from the Collection Division Waiver Unit, which according to Respondent's records appeared to have been granted, but entered into the computer as denied. Petitioner is now appealing the penalties and the interest. The underlying amount of the additional income tax found to be owed for XXXXX was $$$$$.

At the hearing Petitioner stated that he was informed by the Tax Commission that he had not included on his state income tax return income earned in XXXXX from XXXXX. Petitioner had other employers during that year and stated that he thought he had included all income so he ordered a copy of his federal return from the IRS. The IRS did not deliver the requested copy. However, a Tax Commission employee was able to obtain a copy for Petitioner after a delay because of the Tax Commission's move to its current location.

Petitioner states that upon receipt of the copy of his federal return, as soon as he realized that he had not included the income in question, he paid the additional tax.

Respondent's records indicate that because of the delay in finding a copy of Petitioner's return the penalty had been waived. However, another computer generated form from the same time period indicated that the waiver request had been denied and the penalty was not removed from Petitioner's account. Respondent's representative at the hearing was unable to explain the discrepancy.

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).)

In considering waiver of the interest a strict reasonable cause standard is applied because the Petitioner continued to enjoy the benefit of the use of the funds and the State of Utah was denied the use of the funds from the time the taxes were due until they were actually paid by taxpayer. For this reason interest is generally waived only if the tax deficiency resulted from an error on the part of the Tax Commission or a Tax Commission employee.

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 waive the $$$$$ penalty assessed relating to Petitioner's XXXXX income tax. Sufficient cause does not exist to waive the interest. It is so ordered.

DATED this 7 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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