96-0313
Withholding Tax
Signed 6/26/96
BEFORE THE UTAH STATE TAX
COMMISSION
____________________________________
XXXXX,
Petitioner, : ORDER
:
v. : Appeal No. 96-0313
:
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. Jane Phan, Administrative Law Judge, heard
the matter for and on behalf of the Commission. A Status Conference had originally been scheduled in this matter
on XXXXX, but upon request of the parties the Status Conference was converted
to the Initial Hearing in this matter.
Present and representing Petitioner was XXXXX, President of XXXXX. Present and representing Respondent were
XXXXX and XXXXX.
Petitioner
is appealing the assessment of a negligence penalty in the amount of $$$$$ and
interest of approximately $$$$$ arising from a withholding tax audit for the
XXXXX to XXXXX audit period. At the
hearing, Petitioner's representative stated that he was not appealing the
additional tax assessment.
Petitioner's
representative stated that the penalty should be waived because at the end of
XXXXX new owners purchased the business.
The new owners were not aware of the deficiency until they received
notice in XXXXX. Petitioner stated had
they known sooner they would have paid the assessment promptly and avoided
additional interest charges. Petitioner
also stated that obtaining records from the previous owner was difficult. Petitioner alleged that the previous owner
had taken money from the company instead of paying the withholding tax.
Respondent
requested that the assessment be upheld because Petitioner failed to properly
reconcile and account for tax withheld during the audit period and Petitioner
failed to respond to Respondent's XXXXX letter concerning the discrepancy.
Petitioner's
representative explained that he had, in fact, responded to the XXXXX letter by
telephone. He had already been working
with the Collection Division to set up a payment plan for a deficiency for the
third quarter of XXXXX. When he
received the XXXXX letter concerning the XXXXX discrepancy, he thought it was
for the same deficiency and contacted the Collection Agent by telephone.
According to Petitioner, the Collection Agent also assumed it concerned the
third quarter deficiency and stated that the letter could be disregarded.
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
After
reviewing the information presented, the Commission notes that the Petitioner could reasonably have been confused by
the two separate actions for the same time periods so that Respondent's letter
dated XXXXX was disregarded.
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
negligence penalty of $$$$$ assessed pursuant to the Withholding Tax Audit for
the XXXXX audit period. The Commission
upholds the assessment as to the additional tax and the interest as set out in
the Statutory Notice dated 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 26 day of June, 1996.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val
Oveson Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco Alice
Shearer
Commissioner Commissioner