96-0510

Withholding Tax

Signed 7/1/96

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX,

Petitioner, : ORDER

:

v. : Appeal No. 96-0510

:

COLLECTION 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. This appeal had originally been scheduled for an Informal Hearing. However, because of the dollar amount of the penalties at issue, the Administrative Law Judge converted the proceeding to an Initial Hearing in this matter. Present and representing Petitioner was XXXXX. Present and representing Respondent was XXXXX.

Petitioner is appealing the assessment of penalties totaling $$$$$ and interest of approximately $$$$$ relating to the late payment of withholding tax for the XXXXX period.

Petitioner's representative explained that Petitioner had been using the services of an outside accountant for preparation of monthly and quarter tax filings and reports. Petitioner is required to file payroll reports in several different states. Prior to Christmas, the accountant delivered the filings and reports which were filed and paid. Then, the business was closed from Christmas to New Year. However, according to Petitioner's representative, the Utah form had been inadvertently overlooked by the tax preparer. When he returned to work on XXXXX, he discovered the error. He stated that he prepared the form and mailed the payment on XXXXX. He said Petitioner had an excellent payment record with the Tax Commission and it was unfair to assess a penalty for a payment that was only one day late.

Respondent's representative explained that had the payment been mailed on XXXXX it would have been considered timely and no penalty would have been assessed. However, Respondent's representative supplied a copy of the envelope in which the filing had been mailed. The envelope was post marked on XXXXX. She stated that this was not a first time error and, contrary to Petitioner's assertion, there had been several previous delinquencies. Prior to the period at issue, Petitioner was late in XXXXX. Since this was not a first time error Respondent did not recommend waiver of the penalties. Interest is generally waived only in the event a Tax Commission error caused the late filing or payment and this was not indicated by the circumstances.

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, including the number of prior late payments, the Commission finds sufficient cause has not been shown to waive the penalties of $$$$$ or interest of approximately $$$$$ relating to withholding tax for the XXXXX period.

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 1 day of July, 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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