96-2572

Income Tax

Signed 3/24/97

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

PETITIONER, :

Petitioner, : INFORMAL DECISION

:

v. : Appeal No. 96-2572

:

COLLECTION DIVISION OF THE : Account No. #####

UTAH STATE TAX COMMISSION, :

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. As provided for by Utah Code Ann. §63-46b-5, this decision is being based solely upon the documentary evidence or record contained in the Tax Commission's file.

FINDINGS

This involves late filing penalty and interest that has been imposed for the 1995 income tax year, amounting to approximately $$$$$. Although due April 15, 1996, Petitioner filed October 21, 1996 and paid by December 10, 1996. The Petitioner was a shareholder of an “S” Corporation that was involved in a bankruptcy. Apparently, the corporation did not maintain complete accounting records during the period at issue and did not timely generate a K-1 form allowing the shareholders to file timely. Respondent contends that it is the corporation’s continuing responsibility to keep current on its accounting records throughout the bankruptcy. It is Respondent’s position that the income generated by the corporation during the period in issue that resulted in the tax due and owing should have been properly allocated so that accounting records would have been maintained and K-1's prepared in a timely fashion.

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

The undersigned conclude that sufficient cause does not exist to waive the penalty or interest associated with the 1995 income tax year. It is so ordered.

DATED this 24 day of MARCH, 1997.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

_____________________________

GAIL S. REICH

ADMINISTRATIVE LAW JUDGE

The agency has reviewed this case and the undersigned concur in this decision.

DATED this 24 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 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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