97-1521
INCOME
Signed 2/20/98
BEFORE THE UTAH STATE TAX COMMISSION
____________________________________
PETITIONER, )
:
Petitioner, ) DECISION
:
v. )
:
COLLECTION DIVISION OF
THE ) Appeal
No. 97-1521
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 January 29,
1998. G. Blaine Davis, Administrative
Law Judge, heard the matter for and on behalf of the Commission. Present and representing Petitioner were
NAME, together with NAME. Present and
representing Respondent was Ms. Laurie Allred, from the Collection Division.
Based upon the evidence
in the file and presented at the hearing, the Commission makes its:
FINDINGS
Petitioner filed a
request for an extension of time in which to file his 1996 individual income
tax return. However, Petitioner had not
paid a sufficient amount of tax to meet the prepayment requirements, and in
fact, Petitioner had only $$$$$ of withholding tax during the year, and had
paid no other amounts to the State of Utah until he filed his return. Accordingly, an extension penalty was
imposed upon him by Respondent.
Petitioner alleges the
reason he had not prepaid a sufficient amount of tax was because he was a
member of a family partnership in which he sold his interest during 1996, and
he did not receive his Schedule K-1 until just before filing his return. The gain from the sale of his interest in
the partnership was $$$$$, and the total taxable income on his return,
including that gain, was $$$$$.
Petitioner alleges the
reason he did not pay or deposit in more tax was because he thought he had a
higher basis in the property which was sold.
However when he received his Schedule K-1 for the partnership, he found
out his basis was lower than he had believed, so the gain was greater than
expected.
Respondent pointed out
that Petitioner had an extension penalty for 1993 and 1995, so this is the
third extension penalty over three taxable years.
The Utah Legislature has
enacted fail safe provisions to permit taxpayers to pay the amount of tax paid
for the prior year, and then if there is more due, there is no penalty
imposed. However, Petitioner did not
meet that requirement. Further, the
$$$$ of withholding was not even sufficient to pay the tax on the amount of
taxable income which Petitioner would have had even without the sale of the
family partnership interest.
Accordingly, the
Commission finds that Petitioner has not made a good faith effort to try to
comply with the prepayment requirements.
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 not exist to waive the penalty associated with the 1996
individual income tax return of Petitioner.
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 20 day of
February, 1998.
BY ORDER OF THE UTAH
STATE TAX COMMISSION.
G. BLAINE DAVIS
Administrative Law Judge
The agency has reviewed
this case and the undersigned concur in this decision.
DATED this 20 day of
February, 1998.
BY ORDER OF THE UTAH
STATE TAX COMMISSION.
W. Val Oveson Richard B. McKeown
Chairman Commissioner
Joe B. Pacheco Pam Hendrickson
Commissioner Commissioner
^^