96-0514

Sales Tax

Signed 7/5/96

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX,

Petitioner, : ORDER

:

v. : Appeal No. 96-0514

:

COLLECTION DIVISION OF THE : Account No. XXXXX

UTAH STATE TAX COMMISSION, :

:

Respondent. : Tax Type: Sales 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. Present and representing Petitioner was XXXXX. Present and representing Respondent was XXXXX.

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

Petitioner's representative explained that a counterfeit check had cleared Petitioner's bank account in XXXXX. This necessitated that the account be closed and a new account opened. Representatives for Petitioner's bank said they would put flags on the checks Petitioner wanted to clear the old account. Petitioner provided a copy of its bank statement which indicated a number of checks had been paid over the hold and there was sufficient funds for payment of the tax. Petitioner's representative explained that it was her understanding the electronic funds transfer (EFT) would also be paid from the old account over the hold. However, the bank failed to pay the funds. Later, representatives for the bank told Petitioner they could not flag EFT payments. Petitioner provided a letter from the bank which acknowledged that the bank had erred.

Petitioner's representative explained that the police investigated the counterfeit check. They determined that the counterfeiter had been associated with the business which printed Petitioner's checks.

Even though the bank had erred, Respondent did not recommend waiver of the penalties or interest. Respondent's representative stated that Petitioner should have changed to the new account when the EFT transfer was called in. She pointed out that this was not a first time error. There had been a number of prior delinquencies. In XXXXX, penalties had been assessed because Petitioner had not made the payments by EFT. The penalties were later waived because it was the first time Petitioner was required to pay by EFT. Petitioner's representative explained that interest is waived only in the event an error on the part of the Tax Commission or a Tax Commission employee caused the late filing or payment.

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 that sufficient cause been shown to waive the penalties of $$$$$ assessed relating to sales tax for the XXXXX period. Sufficient cause has not been shown to waive the interest.

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 5 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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