97-0918

INCOME

Signed 10/1/97

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

PETITIONER, )

:

Petitioner, ) DECISION

:

v. )

:

AUDITING DIVISION OF THE ) Appeal No. 97-0918

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 a Status Conference. The matter was converted to an informal hearing on September 11, 1997. Joe B. Pacheco, Commissioner, heard the matter for and on behalf of the Commission. Present and representing Petitioner was PETITIONER. Present and representing Respondent were Mr. Frank Hales and Mr. Dan Engh, of the Auditing Division.

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

FINDINGS

The sole issue in this case was the matter of an assessment made against Petitioner for the year 1980. Respondent stated that as a result of the filing of Petitioner=s 1996 income tax return, the system took $$$$$ of the Petitioner=s refund and applied it to a prior assessment that had been on the books since 1984.

Respondent stated that several notice and demand, notice of lien, and statement of delinquent taxes had been mailed to the taxpayer beginning December 21, 1984 through November 10, 1987, and that all mail was sent to the Petitioner=s last known address which was on the system at that time.

The Respondent also stated that they had no knowledge or information available as to why the assessment against Petitioner existed. Respondent stated that they had nothing in the records to indicate why the assessment had been made and presumed that the assessment was the result of an audit that was prepared in 1984. However, the evidence boiled down to nothing to show why the assessment had been made. Respondent stated that because of a transfer of codes in an old system many of the records were purged at that time and that this assessment is merely an old receivable which is sitting on the present system. In addition, all information from 1984 audits is pretty much gone and Respondent had no basis to show why the assessment was made. Respondent=s records show that an income tax was filed for the year 1980 but nothing else shows on the record until December 21, 1984 when the assessment was made. It was at that time that a mailing was made to the Petitioner at Petitioner=s last known address. At that point, the address had presumably been posted over and there is no record nor indication that an address change had been made and that no return or no date of posting shows up on the records.

Petitioner said that he filed his return in 1980 and remained in Utah during 1984 but had then moved to Arizona in 1984 to attend school at an Arizona college. The Petitioner said that he moved back to Utah in July of 1996 and he commenced working in Utah at that time. Petitioner filed his return for 1996 and had requested a refund of $$$$$ at that time. However, that refund amount was taken through the gotcha program and applied to the assessment.

The record shows that an assessment for 1980 was made in the amount of $$$$$, no penalties were applied, but interest from that date to present is $$$$$ giving a total assessment of $$$$$ against the Petitioner.

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 Tax Commission finds sufficient cause does exist to waive the tax in this matter because there is no basis for an assessment that can be held against the Petitioner. In addition, the Commission finds sufficient cause does exist to waive the interest associated with the assessment that was made for this period. The Auditing Division is hereby ordered to reduce the assessment in the amount of $$$$$ and the interest in the amount of $$$$$ against the Petitioner. The Auditing Division is also ordered to refund the $$$$$ taken from Petitioner=s 1996 income tax return and refund it to the Petitioner with interest from the date that the refund was withheld to the present date. It is so ordered.

DATED this 1 day of OCTOBER, 1997.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

_____________________________

JOE B. PACHECO

Commissioner

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

DATED this 1 day of OCTOBER, 1997.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Richard B. McKeown

Chairman Commissioner

Pam Hendrickson

Commissioner

^^