95-1017

Income

Signed 4/17/96

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX,

Petitioner, : FINDINGS OF FACT,

) CONCLUSIONS OF LAW,

v. : AND FINAL DECISION

)

COLLECTION DIVISION OF THE : Appeal No. 95-1017

UTAH STATE TAX COMMISSION, )

Respondent. : Account No. XXXXX

) Tax Type: Income

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. G. Blaine Davis, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing the Petitioner was XXXXX. Present and representing the Respondent were XXXXX and XXXXX of the Collections Division.

Based upon the evidence and testimony presented at the hearing, the Tax Commission hereby makes its:

FINDINGS OF FACT

1. The tax in question is income tax.

2. The periods in question are the calendar years of XXXXX and XXXXX.

3. Petitioner failed to file a Utah Individual Income Tax return for calendar years XXXXX and all of the years XXXXX through XXXXX.

4. When Petitioner=s delinquency was discovered by the Tax Commission, Petitioner was required to file all of the returns and was assessed tax deficiencies, penalties and interest.

5. For the years XXXXX and XXXXX through XXXXX, if Petitioner had filed timely he would have been entitled to a refund. For all of the other years, Petitioner had an amount of tax which he owed.

6. Petitioner did not file either his returns or a request for refund until XXXXX.

7. Petitioner explained that he just kept putting off his tax return filing because of other matters which were pressing him. Petitioner is age XXXXX, and his wife is age XXXXX. During the time at issue, the Petitioner and his wife had four (4) adult children with cystic fibrosis, who required their care and attention. During that time period two of the children ultimately died from that same illness.

8. Petitioner has requested that for the years for which he would have been entitled to a refund if he had timely filed his returns, that those amounts of refunds be applied to the taxes that were due for the years for which he owed income taxes.

9. The position of Respondent is that Utah Code Annotated, Section 59-10-529(7) prohibits the granting of a refund or credit unless the taxpayer has filed a tax return within three (3) years from the due date of the return.

10. Petitioner acknowledges that for the years at issue in this proceeding, he has been given credit for all refunds which were due to periods within three (3) years of the time and date the tax returns were filed. However, Petitioner is seeking relief from the three (3) year statute of limitations.

11. Petitioner has also suggested that he is unable to pay the amounts due because he is retired and living on Social Security and a very limited retirement income.

12. Petitioner also argued that it was inequitable, unconstitutional and unfair for the Tax Commission to be able to go back an unlimited number of years to assess tax, penalty and interest, while taxpayers can only go back three (3) years to request a refund. It was explained to Petitioner, and the Commission so finds, that it is not inequitable, unconstitutional and unfair, because the same three (3) year statute of limitations would have applied in this instance if Petitioner had timely filed his income tax return. Therefore, the problem is not with the statute, but with Petitioner=s failing to timely file his returns as required by law.

APPLICABLE LAW

Utah Code Ann. '59-10-529(7)(a), for the periods at issue in the proceeding, provides as follows:

If a refund or credit is due because the amount of tax deducted and withheld from wages exceeds the actual tax due, no refund or credit may be made or allowed unless the taxpayer or his legal representative files with the Commission a tax return claiming the refund or credit:

(i) within three years from the due date of the return, plus the period of any extension of time for filing the return; or

(ii) within two years from the date the tax was paid, whichever period is later.

Concerning assessments made by the Tax Commission, the statute of limitations is set out in Utah Code Ann. '59-10-536 as follows:

(1) Except as otherwise provided in the section, the amount of any tax imposed by this chapter shall be assessed within three years after the return was filed (whether or not such return was filed on or after the date prescribed)...

(3) The tax may be assessed at any time if:

(a) No return is filed.

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(8).)

DECISION AND ORDER

The Commission is sympathetic to the circumstances of Petitioner, but the Commission cannot ignore the law which prohibits a refund or credit from being given for a period more than three (3) years after the due date of the return. The problem in this case is not caused by the statute, but by the failure of Petitioner to timely file a tax return.

Based upon the foregoing, the Commission finds that it cannot grant the request of Petitioner for relief from the three (3) year statute of limitations. The Petition for Redetermination of Petitioner is hereby denied. It is so ordered.

DATED this 17 day of April, 1996.

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.) a Petition for Judicial Review in the Supreme Court, or b.) a Petition for Judicial Review by trial de novo in district court. (Utah Administrative Rule R861-1A-5(P) and Utah Code Ann. ''59-1-601(1), 63-46b-13 et. seq.)

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