96-2016

Withholding Tax

Signed 3/11/97

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

COMPANY A. :

Petitioner, : FINDINGS OF FACT,

: CONCLUSIONS OF LAW,

v. : AND FINAL DECISION

:

AUDITING DIVISION OF THE : Appeal No. 96-2016

UTAH STATE TAX COMMISSION, :

Respondent. : Account No. #####

: Tax Type: Withholding Tax

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a formal hearing on March 4, 1997. G. Blaine Davis, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing the Petitioner were PETITIONERS REP. and PETITIONERS REP.. Present and representing the Respondent were RESPONDENT REP. and RESPONDENT REP..

Based upon the evidence and testimony presented at the hearing, the Tax Commission hereby makes its:

FINDINGS OF FACT

1. The tax in question is withholding tax, and specifically the penalty and interest on the withholding tax.

2. The period in question is January through December, 1993.

3. Petitioner timely filed and paid the quarterly withholding amounts for each of the quarters during 1993.

4. When the year-end reconciliation was filed, together with copies of the W-2 forms which were provided to the employees, the amounts shown to have been withheld on the W-2 forms did not reconcile with the amount of tax which had been paid to the Utah State Tax Commission. Therefore, an assessment was made for an additional amount of $$$$$. In addition, a negligence penalty of $$$$$ was imposed, together with interest in an amount of $$$$$ as of June 30, 1996.

5. Petitioner represented that the returns and W-2 forms were prepared by a certified public accounting firm, and that the returns were provided to them, were signed, and a check was enclosed for the amount shown to be due. Petitioner does not know how the error occurred, but the amount does represent a very small proportion of the amount of taxes paid and owing by Petitioner. The notice was sent to Petitioner on January 22, 1995, and on February 14, 1995, Petitioner sent a letter to the Utah State Tax Commission with copies of the canceled checks showing that the amounts which had been shown on the returns were the same amounts which had been shown on the returns as due, and inquired about why the additional assessment had been made. Because of a change in personnel, Petitioner did not receive an answer to that letter for a period of 15 months, until June, 1996.

6. Following a receipt of a response from the Tax Commission, Petitioner immediately paid the amount of tax due, and requested waiver of the penalty and interest. Petitioner believes that the penalty and interest should be waived because of the long delay in response from the Tax Commission.

7. This is the first time that Petitioner has had a problem with the reconciliation of its W-2 forms with the final reconciliation which is due to the Commission.

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(8).)

CONCLUSIONS OF LAW

Petitioner furnished all necessary and relevant information to a competent tax advisor, who apparently incorrectly prepared the return for Petitioner. In addition, it does appear to be the first error of this type made by Petitioner.

DECISION AND ORDER

Based upon the foregoing, the Tax Commission finds that sufficient cause has been shown which would justify a waiver of the penalty, and would further justify a waiver of the additional interest which occurred after Petitioner sent his letter to the Commission on February 14, 1995, through and including the date when the tax was finally paid, but the interest which accrued prior to February 14, 1995, is not waived. It is so ordered.

DATED this 11 day of March, 1997.

BY ORDER OF THE UTAH STATE TAX COMMISSION

W. Val Oveson Richard B. McKeown

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner

NOTICE: You have twenty (20) days after the date of a final order to file a Request for Reconsideration with the Commission. If you do not file a Request for Reconsideration with the Commission, you have thirty (30) days after the date of a final order to file a.) a Petition for Judicial Review in the Supreme Court, or b.) a Petition for Judicial Review by trial de novo in district court. (Utah Administrative Rule R861-1A-5(P) and Utah Code Ann. §§59-1-601(1), 63-46b-13 et. seq.)

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