95-1621
Withholding Tax
Signed 2/15/96
BEFORE THE UTAH STATE TAX
COMMISSION
____________________________________
XXXXX, )
:
Petitioner, : ORDER
:
v. : Appeal No. 95-1621
:
AUDITING
DIVISION OF THE : Account No. XXXXX
UTAH STATE TAX COMMISSION, :
:
Respondent. : Tax Type: Withholding Tax
_____________________________________
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. This matter was originally scheduled for a
Status Conference but upon approval of the parties was converted to an Initial
Hearing. Jane Phan, Administrative Law
Judge, heard the matter for and on behalf of the Commission. Present and representing Petitioner by
telephone conference call was XXXXX.
Present and representing Respondent were XXXXX and XXXXX.
Petitioner
is appealing a portion of the assessment of $$$$$ in interest relating to
withholding tax for the audit period of XXXXX through XXXXX. Petitioner did not appeal the assessment of
additional withholding tax in the amount of $$$$$ which stemmed from the refund
issued by the Tax Commission to Petitioner that the Tax Commission subsequently
required Petitioner to pay back.
From
the information provided at the hearing Petitioner had filed on XXXXX, a
reconciliation return and amended TC-96A withholding return for the year XXXXX
indicating an overpayment of $$$$$. A
key punch error on the part of a Tax Commission employee caused the state to
issue to Petitioner a refund check in
the amount of $$$$$. Petitioner's
representative stated that since they were not really sure why they received
such a large refund Petitioner contacted the Tax Commission by telephone to
make sure the refund was not issued in error.
Tax Commission employees apparently did not fully examine Petitioner's
account and instead, Petitioner's representative asserts, they told Petitioner
"don't you like money, just cash the check."
When
Respondent later discovered the error it issued a Statutory Notice on XXXXX
requesting repayment of the refund plus interest, a total of $$$$$. Petitioner asks that the difference between
the amount of the $$$$$ refund check it received and the $$$$$ assessment (a
difference of $$$$$ in interest) be waived.
APPLICABLE LAW
The
Tax Commission is granted the authority to waive, reduce, or compromise
penalties and interest upon a showing of reasonable cause. (Utah Code Ann. §59-1-401(10).)
DECISION AND ORDER
When
penalties or interest arise from an error on the part of Tax Commission
employees, depending on the underlying circumstances, the error is generally considered
reasonable cause for waiver. From the
information it appears two errors may have been made. Respondent admits the refund was created by a Tax Commission key
punch error. A second error may have
occurred based on Petitioner's assertion that when its representatives called
the Tax Commission questioning the refund they were told to just cash the
check.
Based
upon the information presented at the hearing, and the records of the Tax
Commission, the Commission finds sufficient cause has been shown to reduce the
interest assessed by $$$$$ for the Petitioner's withholding tax for the audit
period of XXXXX to XXXXX.
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 15th 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
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