96-0544

Sales Tax

Signed 7/2/96

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX,

Petitioner, : ORDER

v. : Appeal No. 96-0544

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 were XXXXX and XXXXX. Present and representing Respondent was XXXXX.

Petitioner is appealing the assessment of penalties totaling $$$$$ and interest of approximately $$$$$ relating to the late payment and filing of sales tax for the third quarter of XXXXX. The penalties consist of a $$$$$ late filing penalty, a $$$$$ late payment penalty and a $$$$$ lien fee. Interest was assessed at the statutory rate.

Petitioner's representatives requested that the penalties and interest be waived. They stated that they had mailed the return and check for payment timely, on XXXXX. Petitioner produced copies of check stubs and bank statements that indicated the check for tax payment had been written in sequence with other checks during that period. The statements also indicated that funds were available to cover the check of $$$$$ for payment of the tax. The check for tax payment did not clear the account in XXXXX.

Petitioner's representatives explained that they had begun moving the operation to a new location and at the same time were trying to continue business. Thinking that the check had been mailed they did not notice that it had not cleared the account. Eventually, the check cleared Petitioner's bank in XXXXX and Petitioner's representatives explained that they did not know why it had taken so long for the check to clear. Further, they state that they did inform the Tax Commission of their address change with the fourth quarter XXXXX return. They explained that notices must have been mailed to the old address.

Respondent's representative requested that the penalties and interest be upheld. She also requested that the appeal be dismissed because Petitioner did not file the Petition for Redetermination within 30 days from the date the waiver request was denied. The waiver request had been denied on XXXXX and Petitioner requested redetermination on XXXXX.

As to the underlying merits of the appeal, she explained that a nonfiling notice was sent to Petitioner on XXXXX and a Notice and Warrant was sent on XXXXX. She stated that the Commission received the XXXXX third quarter return and check for payment in XXXXX. The check had been dated XXXXX, however, the postmark on the envelope indicated the check and return had not been mailed until XXXXX. Further, this was not a first time filing error, there had been a prior waiver for the fourth quarter of XXXXX.

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

Although, it does appear from the check register and bank statement that Petitioner did prepare a check for the payment of taxes in a timely manner and had funds available to cover the check, Petitioner did not mail the check until several months later. This appears to be an error on the part of Petitioner. Further, this appeal was not filed in a timely fashion. Petitioner has thirty days from the date the waiver request was denied to file for redetermination. Petitioner waited over two years before filing.

Based upon the information presented at the hearing, and the records of the Tax Commission, the Commission finds sufficient cause has not been shown to waive the $$$$$ in penalties or the $$$$$ in interest relating to sales tax for the third quarter of 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 2 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