95-0567

Income Tax

Signed 6/26/95

 

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX, )

:

Petitioner, : ORDER

:

v. : Appeal No. 95-0567

:

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 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 was XXXXX. Present and representing Respondent were XXXXX.

Penalties of $$$$$ with interest of approximately $$$$$ for XXXXX and penalties of $$$$$ with interest of approximately $$$$$ for XXXXX were assessed against Petitioner relating to income tax. Petitioner had requested waiver of the penalties and interest from the Collection Division Waiver Unit which was denied. The underlying amount of income tax Petitioner owed for XXXXX was $$$$$ of which $$$$$ had been paid by Petitioner's withholding. Petitioner's income tax for XXXXX was $$$$$ of which $$$$$ had been paid by Petitioner's withholding.

At the conference Petitioner stated that he was laid off in XXXXX and he did not have the money to pay the additional taxes owed for XXXXX or XXXXX. Then in XXXXX of XXXXX Petitioner stated he was injured in an accident which has left him disabled. Petitioner stated that he was recently able to pay the additional tax owed for the years in question and asked that the penalties and interest be waived. Petitioner stated that he should not have to pay penalties and interest from the time of his injury.

Respondent stated that Petitioner had not shown sufficient reasonable cause for the waiver of penalties and interest. Financial hardship is not accepted as reasonable cause and Petitioner's injury occurred well after the filings were due and taxes were owed. Respondent explained how the penalties were assessed and that the amount of the penalties did not increase, although the amount of the interest did increase, over time. Respondent stated that the additional taxes owed for XXXXX were paid by the Tax Commission applying Petitioner's refunds for the years following the years in question.

In considering Petitioner's request for waiver or reduction of the interest the Tax Commission applies 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 underlying taxes were due until they were actually paid by Petitioner.

DECISION AND ORDER

Based upon the information presented at the conference, and the records of the Tax Commission, the Commission finds that, although the circumstances described by Petitioner are unfortunate, sufficient cause has not been shown to waive or reduce the penalties of $$$$$ for XXXXX and $$$$$ for XXXXX or the interest assessed for either year relating to income tax.

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 26th day of June, 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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