96-0790

Special Fuel

Signed 9/25/96

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX, )

:

Petitioner, : ORDER

:

v. : Appeal No. 96-0790

:

COLLECTION DIVISION OF THE : Account No. XXXXX

UTAH STATE TAX COMMISSION, :

:

Respondent. : Tax Type: Special Fuel

_____________________________________

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 MMDDYY. Jane Phan, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing Petitioner by telephone conference call were XXXXX and XXXXX. Present and representing Respondent were XXXXX and XXXXX.

Petitioner is appealing the assessment of penalties totaling $$$$$ and interest of approximately $$$$$ relating to the special fuel tax for the March of 19YY period. The penalty had been assessed for late payment of the special fuel tax.

At the hearing Petitioner's representatives explained that the payment and return had been mailed to the Tax Commission early, on MMDDYY. They provided their account leger and bank reconciliation which indicated that check number ##### for payment of the tax liability at issue was written in sequence with check number #####. Check number ##### was for payment of the motor fuel tax and cleared on MMDDYY. They also were able to obtain a photocopy of the envelope in which they mailed the check and return to the Tax Commission. The postmark indicated the envelope was mailed on MMDDYY. Petitioner's account history shows that the return was received timely. Petitioner's representatives asserted that the check was lost at the Tax Commission.

Petitioner's representatives were also concerned with the length of time from the date the return was due until the Tax Commission notified Petitioner that it did not receive the check. The first notice from the Tax Commission concerning the missing check was received by Petitioner in March of 19YY. Petitioner remitted a new check within a few days of the notification. Petitioner's representatives requested the interest be waived as well as the penalty because the Tax Commission took so long in notifying Petitioner. However, they acknowledged that they did know the check had not cleared and were carrying it on their outstanding check list, believing that the Tax Commission would eventually process it.

Respondent's representative stated that based on the additional documentation provided by Petitioner she recommended that the penalty be waived. She did not recommend waiver of the interest.

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

After reviewing the information presented the Commission agrees with Respondent's recommendation pertaining to waiver of the penalties. The Commission will not waive the interest. Petitioner was aware that the check had not cleared within the usual period of time and did not call or attempt to contact the Tax Commission to determine if there was a problem. Further, because the funds remained in Petitioner's account, Petitioner retained the benefit of the use of the funds.

Based upon the information presented at the hearing and the records of the Tax Commission, the Commission finds sufficient cause been shown to waive the penalty of $$$$$ relating to special fuels tax for the March 19YY period. Sufficient cause was not shown for waiver or reduction of the approximately $$$$$ in 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 25th day of September, 1996.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Richard B. McKeown

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner

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