96-0892
Income
Signed 8/13/97
BEFORE THE UTAH STATE TAX
COMMISSION
____________________________________
PETITIONER, :
:
Petitioner, : DECISION
:
v. :
:
COMPLIANCE
AUDITING UNIT, ) Appeal No. 96-0892
COLLECTION
DIVISION OF THE :
UTAH STATE TAX COMMISSION, : Account
Nos. #####
:
Respondent. : Tax Type: Income
_____________________________________
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
adjudicative proceeding. A hearing was
held on June 24, 1997. Jane Phan, Administrative
Law Judge, heard the matter for and on behalf of the Commission. Present and representing Petitioners were
PETITIONERS REP., Esq., and PETITIONER.
Present and representing Respondent was RESPONDENT REP..
Based
upon the evidence in the file and presented at the hearing, the Commission
makes its:
FINDINGS
The appeal concerned Petitioner's Utah
individual income tax for the years 1980 through 1994. Petitioner is requesting refunds for several
of the years of amounts she asserts were overpaid and waivers of penalties and
interest. Respondent maintains that
overpayments were credited to years that were underpaid, as well as to interest
and some penalties. Respondent pointed
out that many of the penalties had already been waived. Further, it was Respondent's position that
the three year statute of limitations for refunds had expired barring
Petitioner from receiving any refunds.
Petitioner
testified that they had been relying on an accountant from 1975 to
approximately 1983 to file their tax returns.
She explained that if they owed taxes the accountant would take the
necessary funds out of Petitioner's account and if they received a refund the
accountant would then deposit the refund into their account. Petitioner testified that she assumed the
accountant was filing the returns through the 1982 tax year. However, the returns for 1979 through 1982
had not been filed. In 1983 an Internal
Revenue Service ("IRS") agent visited Petitioner to inquire as to why
returns were not filed. Petitioner
testified that she gave copies of the returns to the IRS agent. Petitioner asserts that the agent told her
that the agent would file the Utah returns with the State of Utah. However, the returns were not filed with the
State of Utah at that time.
In
1984 Petitioner went into bankruptcy.
She said at this point they pulled all of their records and filed all
returns again with Utah and the IRS.
However, again the Tax Commission record does not indicate that returns
were filed at this point. In 1985 or 1986
Petitioner retained a new accountant to prepare and file returns. However, again the Tax Commission records
indicate that the returns were not filed at this time.
In
fact, Tax Commission records indicate that returns for the period 1980 through
1990 were not filed until 1994, after a non-filing audit assessment was made
against Petitioners based on estimated income.
Once the returns were filed they replaced the amount of the audit
assessment. The return for 1991 was
filed timely and the returns for 1993 and 1994 were filed during the extension
period. For 1992 the return was not
filed until December of 1993.
APPLICABLE LAW
If
a refund or credit is due because the amount of tax deducted and withheld from
wages exceeds the actual tax due, no refund or credit may be made or allowed
unless the taxpayer or his legal representative files with the commission a tax
return claiming the refund or credit within three years from the due date of
the return or within two years from the date the tax was paid, whichever period
is later. In other instances where a
refund or credit of tax which has not been deducted and withheld from income is
due, no credit or refund may be allowed or made after three years from the time
the tax was paid, unless, before the expiration of the period, a claim is filed
by the taxpayer or his legal representative.
(Utah Code Ann. §59-10-529(7).)
The
amount of any tax imposed by this chapter shall be assessed within three years
after the return was filed. If no
return is filed the tax may be assessed at any time. (Utah Code Ann. §59-10-536.)
DECISION AND ORDER
Reliance
on a tax advisor to prepare and file a return does not excuse timely filing or
payment. The duty to file and pay the
tax return remains with the taxpayer. Petitioner
did not file returns for over ten years.
Although for the first years, 1980 through 1982, Petitioner may have
relied on her accountant and then an IRS agent to file the returns, the
responsibility ultimately remained with Petitioner to see that they were
filed. Petitioner asserts that returns
were again filed in 1984 or 1985 as part of the bankruptcy. However, returns for the subsequent years
through 1990 were not filed timely.
This indicates a clear pattern of delinquency.
Petitioner
asks that she receive refunds for the periods that were overpaid. This claim for refund is barred by the
applicable three year statute of limitations.
Further, Respondent has provided documentation that the overpayments had
been credited towards underpayment in other years as well as to interest and
some penalties.
Based
on the foregoing the Tax Commission denies Petitioner's appeal concerning
refund of income tax and waiver of penalties and interest for the years 1980
through 1994. It is so ordered.
DATED
this 13 day of AUGUST, 1997.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
_____________________________
Jane Phan
Administrative Law
Judge
The
agency has reviewed this case and the undersigned concur in this decision.
DATED this 13 day of
AUGUSUT, 1997.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val
Oveson Richard
B. McKeown
Chairman Commissioner
Joe B.
Pacheco Pam
Hendrickson
Commissioner Commissioner
^^