97-0156

INCOME

Signed 5/1/97

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

PETITIONER, )

:

Petitioner, ) DECISION

:

v. )

:

COLLECTION DIVISION OF THE ) Appeal No. 97-0156

UTAH STATE TAX COMMISSION, :

STATE OF UTAH, ) Account No. #####

:

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 adjudicative proceedings. A hearing was held on April 17, 1997. Gail S. Reich, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing Petitioner were PETITIONER REP. and, by telephone, PETITIONER REP 2.. Present and representing Respondent were Mr. Clark Snelson from the Attorney General=s Office, Jan Sanchez of the Collection Division.

Based upon the evidence in the file and presented at the hearing, the undersigned makes the following:

FINDINGS

This appeal involves a request by Petitioner to waive penalties imposed as a result of a non-filing audit covering the income tax years 1991 through 1994. In addition, Petitioner is requesting waiver of underpayment penalty imposed for 1995 in the amount of $$$$$.

A prior decision rendered in regards to the non-filing audit resulted in a determination by the Commission that no grounds existed to waive the failure to file penalty imposed in the audit. Therefore, the only penalty that has been imposed that is properly before the Commission in this appeal is the penalty regarding failure to pay the amount due within 30 days of the issuance of the prior order. That penalty was imposed based on Petitioner=s failure to pay taxes due within 30 days of the order. Petitioner has timely filed an appeal in regards to the imposition of that penalty.

Petitioner and his accountant testified at the hearing that after the order was issued by the Commission upholding tax liability, every attempt was made to prepare the returns and submit them and pay the amount due but this effort took a little longer than a 30-day period. Neither the Petitioner nor the accountant were aware of the requirement that the filing be done within 30 days or else an additional penalty would be imposed. The order did not provide that information.

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 circumstances, the Commission has concluded that reasonable grounds do exist to waive the failure to pay penalty imposed for 1991 through 1994. As for the underpayment penalty of two percent (2%) per month for the 1995 income tax year, which was imposed for each month after April 15, 1996 until actual payment was made, was imposed properly and no grounds exist to waive that penalty. It is so ordered.

DATED this 1 day of MAY, 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 1 day of MAY, 1997.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Richard B. McKeown

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner

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