95-1146

Income

Signed 11/21/96

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX )

:

Petitioners, ) FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

v. ) AND FINAL DECISION

:

AUDITING DIVISION OF THE ) Appeal No. 95-1146

UTAH STATE TAX COMMISSION, :

) Account No. #####

:

Respondent. ) Tax Type: Income

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for an Initial Hearing on XXXXX, 19YY. During the Initial Hearing, Petitioner waived the right to the Initial Hearing and requested that the hearing be converted to a Formal Hearing. Respondent concurred with that request, so the Administrative Law Judge entered an order that it would be conducted as a Formal Hearing. G. Blaine Davis, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present on the telephone and representing Petitioner was Mr. XXXXX. Present and representing Respondent were Mr. XXXXX and Mr. XXXXX of the Auditing 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 calendar years 19YY and 19YY.

3. Petitioners filed their 19YY and 19YY income tax returns with both the Internal Revenue Service and the Utah State Tax Commission.

4. The Internal Revenue Service made certain adjustments to the income tax return of Petitioner.

5. Following such adjustments, Petitioner did not file an amended tax return with the Utah State Tax Commission.

6. Thereafter, the Auditing Division received information from the IRS regarding the adjustments which had been made to Petitioner=s 19YY and 19YY federal income tax returns, and the Auditing Division made adjustments to the Utah State Income Tax Returns for Petitioners, and mailed Petitioners a notice of the adjustments and the amount of tax due.

7. The only adjustments made by Respondent to the Utah returns as filed by Petitioner were to match those audit changes made by the IRS, to add a %%%%% negligence penalty for failing to timely file an amended tax return, and for the interest on the amounts then due at the statutory rate.

8. Petitioner alleges that he ultimately paid the amounts due to the IRS to prevent interest from increasing the amount due, but Petitioners have not made any payments to the Utah State Tax Commission for any amounts.

9. Petitioners have alleged that the adjustments made to their federal return by the IRS were not proper adjustments, and were not fair or reasonable. However, at the hearing, Petitioners did not state any reasons that they believe the tax was not due, but indicated they were primarily trying to get to a forum where fairness and equity were the primary standards. After discussion with the Administrative Law Judge, Petitioners said they felt that the case would be judged at the Tax Commission according to the law and not on a reasonableness or fairness standard. Therefore, they did not present any substantive or factual testimony or evidence regarding the appropriateness of the audit assessment made by Respondent.

APPLICABLE LAW

AState Taxable Income@ in the case of a resident individual means his federal taxable income with certain modifications, subtractions and adjustments as provided by law (Utah Code Annotated '59-10-112).

AFederal Taxable Income@ means taxable income as defined in Section 63, Internal Revenue Service Code of 1986. (Utah Code Annotated '59-10-111).

Every resident individual who is required to file a federal income tax return is also required to file a state income tax return. (Utah Code Annotated '59-10-502).

A taxpayer is required to report all changes and corrections in federal taxable income reported on their federal income tax return, and to do so within ninety (90) days from the date such change or correction is made. (Utah Code Annotated '59-10-529).

If any underpayment of tax is due to negligence, the penalty is 10% of the underpayment. (Utah Code Annotated '59-1-401(5)(a)(I)).

DECISION AND ORDER

In this case, Petitioner has not alleged or submitted evidence to establish that the adjustment made by the Auditing Division is not appropriate or pursuant to the provisions of Utah law. Based upon the information presented at the hearing, and the records of the Tax Commission, the Commission finds that the audit assessment made by Respondent against Petitioner should be sustained and affirmed. It is so ordered.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

Dated this 21st day of November, 1996.

W. Val Oveson Richard B. McKeown

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.)