95-1242

Income

Signed 2/7/96

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX, )

:

Petitioner, : ORDER

:

v. : Appeal No. 95-1242

:

AUDITING DIVISION OF THE : Serial No. XXXXX

STATE TAX COMMISSION, :

STATE OF UTAH, :

Respondent. : Tax Type: Income

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a Status Conference which was therein converted to an Initial Hearing to be held pursuant to the provisions of Utah Code Ann. §59-1-502.5, on XXXXX. G. Blaine Davis, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present on the telephone and representing Petitioner was XXXXX. Present and representing Respondent were Mr. XXXXX and Mr. XXXXX from the Auditing Division.

Petitioner did not file a XXXXX Utah individual income tax return. Petitioner stated that he had the return prepared in early XXXXX, but did not have sufficient money with which to pay the amount of tax due, so he did not file or pay at that time, but instead intended to do it in the future when he had sufficient funds.

The reason Petitioner did not have sufficient funds with which to pay his taxes was because he had been working for a company named XXXXX, and they ultimately went out of business and in fact were unable to pay him for the final two months of his wages. As a result of the company going out of business, Petitioner not only lost the income for approximately two months, but then had to go on unemployment and live for a period of time on unemployment compensation. He was on unemployment at the time that the taxes were due, and simply didn't have enough money to pay the taxes.

There is no dispute as to the amount of taxes due. The only issue is the Petitioner's request to waive the penalty and interest. However, in the Commission's view, the failure to pay because of insufficient funds does not constitute reasonable cause for the Commission to waive the penalty or the interest.

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 the penalties and interest assessed for the XXXXX income tax return.

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 7th day of February, 1996.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Roger O. Tew

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner

^^