95-0750

Income

Signed 8/17/95

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX,

Petitioner, ) INFORMAL DECISION

:

v. )

:

COLLECTION DIVISION OF THE ) Appeal No. 95-0750

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. Although duly notified of the date, time and location of the hearing Petitioner was not present. Present and representing Respondent was XXXXX. Since this proceeding was an Informal Hearing Petitioner was not defaulted for her failure to appear and a decision was made on the information in the file and the testimony of Respondent's representative.

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

FINDINGS

Penalties in the amount of $$$$$ and interest of approximately $$$$$ were assessed against Petitioner relating to income tax for the year ending XXXXX. Petitioner requested waiver of the penalties and interest from the Collection Division Waiver Unit which was denied. The underlying amount of additional tax owed for the subject period was XXXXX.

In the letter provided by Petitioner, she explained that she had notified her employer, which was an airline, of her move to Utah in June of XXXXX and filed an Affidavit of Residence with the appropriate department. Apparently this was lost without being processed and after a couple months Petitioner, noticing that her check stub still indicated tax withholding for XXXXX instead of Utah, recontacted her employer concerning the matter who asked that she resubmit the necessary paperwork. Again the matter was not corrected by her employer and in January Petitioner had to refile necessary paperwork. In fact it was not until XXXXX that Petitioner's employer was able to issue a W-2 to Petitioner and they had still not corrected the error. Petitioner requested an extension but she had not had to pay additional state or federal taxes for several years and did not include a prepayment with her extension. Petitioner stated that because of her employer's error she had to petition the State of XXXXX for a refund of the withholdings incorrectly paid there in the amount of $$$$$ in order to pay her tax liability in Utah.

At the hearing Respondent's representative stated that she did not recommend waiving the penalties, or the interest, because the error was on the part of Petitioners's employer and not the Tax Commission.

In reviewing the information provided by Petitioner, the fact that Petitioner was not able to control where the withholdings were being paid and that she was not able to obtain necessary records, i.e. her W-2, until after her income tax filing was due is sufficient reasonable cause for waiver of the penalties.

In considering waiver of the interest the Commission applies more stringent reasonable cause guidelines because 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. Generally interest is waived only in the event an error on the part of a Tax Commission employee resulted in the late filing or payment.

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 the Petitioner's income tax for XXXXX. 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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