96-0926

Income Tax

SIGNED 9/25/96

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX, )

Petitioner, ) ORDER

v. ) Appeal No.96-0926

COLLECTIONS 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 MMDDYY. G. Blaine Davis, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing Petitioner was XXXXX, attorney at law. Present and representing Respondent were XXXXX and XXXXX of the Collections Division.

Petitioner=s mother is deceased, and upon the death of her mother, Petitioner sought advice of counsel and was advised that no tax would be due on the estate of her mother. Counsel represented that he checked with various sources and was told that the tax had been paid. However, the Internal Revenue Service later audited the matter assessed a deficiency for the period ended December 19YY.

The Utah State Tax Commission thereafter received notification from the Internal Revenue Service of the tax imposed, so it sent a proposed assessment. As part of that assessment, Respondent imposed a %%%%% negligence penalty for not timely filing an amended return. When the assessed amount was not paid, it assessed a second %%%%%% late payment penalty, plus interest on all of those amounts.

Petitioner was sent a statutory notice by Respondent on MMDDYY, and did not pay the amount assessed until MMDDYY, approximately one and one half months late. The total amount due to the State Tax Commission was approximately $$$$$ and an additional $$$$$ was due to the Internal Revenue Service. In order to raise the money to make the payment of the taxes, Petitioner had to take out a mortgage on her property, and the mortgage was not able to be arranged and closed in time to make payment within thirty (30) days after receiving the notice from the State Tax Commission. In addition, there were continuing negotiations with the Internal Revenue Service to arrive at a final amount due, so Petitioner was under the impression that it would not need to be paid until those negotiations were finalized.

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

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 or reduce the negligence penalty, but sufficient cause has been shown to waive the late payment penalty. In addition, the interest should be adjusted to give credit for the interest that was charged on the amount of the late payment penalty.

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