96-0653

Income

Signed 7/25/96

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX,

Petitioner, : ORDER

:

v. : Appeal No. 96-0653

:

COLLECTION DIVISION OF THE : Account No. XXXXX

UTAH STATE TAX COMMISSION, :

:

Respondent. : Tax Type: Income

_____________________________________

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 by telephone conference call was XXXXX. Present and representing Respondent was XXXXX.

Petitioner's personal representative is appealing the assessment of an inheritance tax penalty totaling XXXXX for the late filing of an Inheritance Tax Return associated with Petitioner's estate.

The representative appearing at the hearing explained that the personal representative for the estate resided in XXXXX while Petitioner had resided in XXXXX. The personal representative had made numerous phone calls to the decedent's accountant and attorney in the XXXXX area and had relied on them to file the return. He did not know about the filing deadline. Further, the decedent's accountant should have filed an extension. Documentation of the phone calls between the personal representative for the estate and the decedent's accountant was provided.

After reviewing the documentation provided by Petitioner's representative, Respondent recommended waiving the penalty because the personal representative of the estate had tried to contact and follow up with the Utah accountant and had relied on the accountant.

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 the Commission has determined that reliance on a competent tax advisor may be sufficient reasonable cause in certain situations for waiver of penalties, it has never been the Commission policy to waive penalties for the late filing of a return, based on this reliance. Ultimately the duty to file timely remains with the taxpayer. The Commission has determined that it should remain consistent in its application of the waiver guidelines, although this is contrary to the recommendation of the Collection Division.

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 inheritance tax penalty of $$$$$ relating to Petitioner's Estate.

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 25 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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