97-1264
INCOME
Signed 11/10/97
BEFORE THE UTAH STATE TAX
COMMISSION
____________________________________
PETITIONER, )
:
Petitioner, ) DECISION
:
v. )
:
COLLECTION DIVISION
OF THE ) Appeal
No. 97-1264
UTAH STATE TAX
COMMISSION, :
) Account No. #####
:
Respondent. ) Tax
Type: Income Tax
_____________________________________
STATEMENT OF CASE
This matter came
before the Utah State Tax Commission pursuant to the provisions of Utah Code
Ann. '59-1-502.5 An Initial Hearing was held on November 4,
1997. Jane Phan, Administrative Law
Judge, heard the matter for and on behalf of the Commission. Petitioner was present and represented
himself. Present and representing
Respondent was Vickie Christoffersen.
Based upon the
evidence in the file and presented at the hearing, the Commission makes its:
FINDINGS
Petitioner is
appealing the assessment of an extension penalty and interest arising from the
late payment of his 1995 income taxes.
The penalty was $$$$$ and the interest approximately $$$$$.
Petitioner
explained that he had talked to his accountant on a number of occasions about
whether a prepayment would be necessary for the 1995 income tax, as Petitioner
needed an extension while K-1's were being finalized. Petitioner maintained that his accountant told him no further
prepayment would be necessary. However,
when the K-1's were finalized subsequent to April 15, 1996, it was determined
that Petitioner's liability was higher than the estimated amount. Petitioner explained that he was unable to
file his returns by April 15 because a portion of his income came from
partnership interests and Petitioner did not know the amount until the K-1's
were prepared.
Petitioner acknowledged
that for 1994 he had the same type of error in underestimating his Utah tax
liability so that insufficient funds had been paid to the State of Utah by
April 15, 1995 and an extension penalty was assessed.
Respondent's
representative explained to Petitioner that he should have paid 100% of the
prior years state tax liability if he could not estimate the current years
liability. If Petitioner would have
paid an amount equal to his prior years liability there would be no extension
penalty. She would not recommend waiver
of the penalty or the interest because this was not a first time error and
Petitioner had made the same mistake in the prior year.
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
Penalties are
assessed to encourage timely filing and payment of taxes. For Utah income tax purposes an extension is
an extension to file, not an extension to pay.
Payment must be made by April 15.
Taxpayers are given the option of making a prepayment equal to the prior
year's liability if they are uncertain of the amount of the current year's
liability.
The Tax Commission
finds sufficient cause does not exist to waive the penalty or interest
associated with Petitioners 1995 income taxes.
It is so ordered.
This Decision does
not limit a party's right to a Formal Hearing.
Any party to this case may file a written request within thirty (30)
days of the date of this decision to proceed to a Formal Hearing. Such a request shall be mailed to the
address listed below and must include the Petitioner's name, address, and appeal
number:
Utah State Tax Commission
Appeals Division
210 North 1950 West
Salt Lake City, UT 84134
Failure to request
a Formal Hearing will preclude any further appeal rights in this matter.
DATED this 10 day
of NOVEMBER, 1997.
BY ORDER OF THE
UTAH STATE TAX COMMISSION.
_____________________
Jane Phan
Administrative Law Judge
The agency has reviewed
this case and the undersigned concur in this decision.
DATED this 10 day of
NOVEMBER, 1997.
BY ORDER OF THE UTAH
STATE TAX COMMISSION.
W. Val Oveson Richard B. McKeown
Chairman Commissioner
Joe B. Pacheco Pam Hendrickson
Commissioner Commissioner
^^