96-2073

Income Tax

Signed 10/9/96

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

XXXXX, )

:

Petitioner, : INFORMAL DECISION

:

v. :

:

COLLECTION DIVISION OF THE : Appeal No. 96-2073

UTAH STATE TAX COMMISSION, :

: Account No. XXXXX

:

Respondent. : Tax Type: Income Tax

_____________________________________

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 proceedings. An Informal Hearing was held 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 was XXXXX, Petitioner's spouse. Present and representing Respondent was XXXXX.

Based upon the evidence in the file and presented at the Informal Hearing, the Commission makes its:

FINDINGS

Petitioner is appealing the assessment of penalty and interest relating to his 19YY state individual income tax filing. The penalty assessed was the %%%%% negligence penalty in the amount of $$$$$. Interest in the amount of $$$$$ was assessed based on the statutory rate.

Petitioner's representative explained that Petitioner retired at the end of October 19YY and started receiving retirement income from XXXXX. She stated that she always prepared their tax returns. For 19YY she did not think to include the retirement income and, although she did receive a notice from XXXXX, the notice did not look like a W-2 so she thought it was just another advertisement. By 19YY she realized the retirement income needed to be included for the 19YY tax year. However, she did not go back and amend the 19YY filing because she forgot that they received retirement income in 19YY.

The Internal Revenue Service (IRS) found the mistake and Petitioner paid the additional federal tax. Petitioner's representative explained that she was told by an IRS agent that the IRS would contact the State Tax Commission. She thought that she should just wait until the State Tax Commission contacted her. She did not know that she should have filed an amended Utah return at that point. She also explained that paying the penalty and interest would cause them financial hardship.

Respondent explained that neither ignorance of the law nor financial hardship were accepted as reasonable cause for waiver of penalties or 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

Petitioner received misleading information from the IRS which caused her to wait until contacted by the Utah State Tax Commission concerning changes to her 19YY income taxes. The Tax Commission finds that this is sufficient cause to waive the penalty of $$$$$ associated with the Petitioner's 19YY income tax return. Sufficient cause was not shown for waiver of the interest. It is so ordered.

DATED this 9th day of October, 1996.

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 Petition for Judicial Review by trial de novo in district court. (Utah Administrative Rule R861-1A-5(P) and Utah Code Ann. §63-46b-13 et. seq.)

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