95-1077

Sales

Signed 10/11/95

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX, )

Petitioner, : ORDER

v. : Appeal No. 95-1077

COLLECTION DIVISION OF THE : Account No. XXXXX

UTAH STATE TAX COMMISSION, :

Respondent. : Tax Type: Sales

_____________________________________

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. Present and representing Petitioner was XXXXX. Present and representing Respondent was XXXXX.

Penalties of $$$$$ and interest of approximately $$$$$ were assessed against Petitioner relating to first quarter XXXXX sales tax. Petitioner had requested a waiver of penalties and interest from the Collection Division Waiver Unit which was denied. Petitioner now appeals this denial. The underlying amount of sales tax owed for the quarter in question was $$$$$.

At the hearing Petitioner's representative explained that the return was filed and paid late for the quarter in question because the Petitioner's computer had a hard drive crash and Petitioner lost all its information including the information necessary to compute sales tax. Petitioner's representative stated that as soon as the information was recovered the return was filed.

Respondent's representative stated that the penalty consisted of a $$$$$ late payment penalty and a $$$$$ late filing penalty. She further stated that the account history indicated Petitioner had actually paid the sales tax amount on XXXXX, which was probably paid timely. However, Petitioner did not file the return until XXXXX. Because payment had been timely Respondent recommended waiving the $$$$$ late payment penalty. Respondent did not recommend waiver of the remaining penalty because the records indicated the return was filed significantly late and Petitioner had other late filings. Further, Respondent pointed out that Petitioner had paid the correct tax amount on XXXXX, so should have had the information to complete the sales tax return at that time. Respondent explained that interest is generally waived only in the event an error on the part of the Tax Commission contributed to the late filing or payment.

Petitioner's representative, who apparently did not have first hand knowledge of the events, did not know why the payment had been timely, but the return had been filed several months late.

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

It appears that despite the hard drive crash Petitioner had sufficient information to determine the sales tax amount for the first quarter of XXXXX timely so has not provided sufficient reasonable cause for waiver of the XXXXX late filing penalty. Based upon the information presented at the hearing, and the records of the Tax Commission, the Commission finds sufficient cause has been shown to waive the XXXXX late payment penalty related to Petitioner's sales tax for the first quarter of XXXXX. Sufficient cause has not been shown to waive the XXXXX late filing penalty, or the interest. However, the interest shall be adjusted according to this decision.

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 11 day of October, 1995.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Roger O. Tew

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner