95-0882

Withholding

Signed 9/28/95

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX, )

Petitioner, : ORDER

v. : Appeal No. 95-0882

COLLECTION DIVISION OF THE : Account No. XXXXX

UTAH STATE TAX COMMISSION, :

Respondent. : Tax Type: Withholding

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for an Initial Hearing 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. Petitioner did not want to be present and requested that a decision be made without Petitioner's presence at the hearing. Present and representing Respondent was XXXXX.

Penalties of $$$$$ and interest of approximately $$$$$ were assessed against Petitioner relating to withholding for the XXXXX period. Upon Petitioner's request the Collection Division Waiver Unit waived the penalty. Petitioner now appeals the interest.

In a letter dated XXXXX Petitioner states that the check for withholding tax was typed and mailed to the Tax Commission's old address on XXXXX. In XXXXX Petitioner received notice that the Tax Commission did not have the XXXXX filing or payment. Petitioner's letter said that Petitioner then mailed copies with a note stating that the original payment and filing had been mailed to the Tax Commission at its old address and asked that the Tax Commission check its offices for the original check. In XXXXX Petitioner received another notice so Petitioner called the Tax Commission. Petitioner followed the instructions given over the telephone to place a stop payment on the original check and mail a new check for payment of the taxes.

In her letter Petitioner's representative stated that the original check and filing had been lost in the mail, by the Tax Commission or in the forwarding from the old building to the new building and felt that all penalties and interest should be waived. Further, Petitioner was upset because Petitioner had to pay the $$$$$ stop payment fee, $$$$$ certified mail charge, cost of retyping the check and cost of the significant amount of time spent trying to straighten this matter out.

At the hearing Respondent stated that the penalty had been waived for the reasons stated by Petitioner. However, in considering waiver of interest a more stringent 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 benefit of the use of the funds from the time the taxes were due until they were actually received by the Commission. Therefore, interest is waived only if the Petitioner demonstrates that it was a Tax Commission error that caused the late payment or filing. Respondent stated that the original filing may have been lost prior to being mailed or in the mail. Petitioner had not demonstrated that it was a Tax Commission error.

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

Based upon the information presented at the hearing, and the records of the Tax Commission, the Commission finds sufficient cause has not been shown to waive or reduce the interest assessed relating to withholding tax for the XXXXX filing period.

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 28 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