96-0536

Withholding

Signed 7/1/96

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX,

Petitioner, : INFORMAL DECISION

:

v. :

:

COLLECTION DIVISION OF THE : Appeal No. 96-0536

UTAH STATE TAX COMMISSION, :

: Account No. XXXXX

:

Respondent. : Tax Type: Withholding

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission pursuant to the Administrative Procedures Act and the rules of the Utah State Tax Commission for informal proceedings. An Informal Hearing was held on XXXXX. 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 was XXXXX.

Based upon the evidence in the file and presented at the Informal Hearing, the Commission makes its:

FINDINGS

Petitioner is appealing the assessment of $$$$$ in penalties and approximately $$$$$ in interest arising from the late payment and filing of withholding tax for the third quarter of XXXXX. The penalties consist of a $$$$$ late filing penalty and a $$$$$ late payment penalty. The late payment penalty had been added because Petitioner did not pay within thirty days of notice mailed by the Tax Commission.

Petitioner's representative explained that Petitioner was a non-profit organization operated mostly by volunteers. During the period at issue, Petitioner had one full time employee and the office was run from this employee's home. He stated that it was the employee's responsibility to pay the withholding tax and she had failed to do so timely. Petitioner's representative stated that the employee had to be terminated for cause and it was a few months before the volunteer board found out that the taxes had not been paid. He said that it was difficult to obtain the necessary records from the terminated employee.

Respondent's representative would not recommend waiver of the penalties or interest stating that Petitioner had not shown sufficient reasonable cause for their waiver. She stated that this was not a first time error. Petitioner also filed and paid late for the first quarter of XXXXX. She did not think the circumstances indicated unobtainable records and maintained that employers have a duty to supervise employees.

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

Non-profit organizations are required to pay and file timely all applicable state taxes and failure to do so will generally result in the assessment of penalties and interest. Further, employers are ultimately responsible for the filing and payment of taxes. However, because there may have been some difficulty in obtaining the records to correct the error after the fact, there is sufficient reasonable cause to waive the late payment portion of the penalty.

The Tax Commission finds sufficient cause does exist to waive the $$$$$ late payment penalty associated with the withholding tax for the third quarter of XXXXX. Sufficient cause does not exist to waive the $$$$$ late filing penalty or the interest. It is so ordered.

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

NOTICE: You have twenty (20) days after the date of a final order to file a Request for Reconsideration with the Commission. If you do not file a Request for Reconsideration with the Commission, you have thirty (30) days after the date of a final order to file a Petition for Judicial Review by trial de novo in district court. (Utah Administrative Rule R861-1A-5(P) and Utah Code Ann. §63-46b-13 et. seq.)