98-0044
Corporate
Franchise
Signed
4/15/00
BEFORE THE UTAH STATE TAX
COMMISSION
____________________________________
COMPANY C, :
:
Petitioner, : DECISION
:
v. :
:
AUDITING
DIVISION OF THE : Appeal No. 98-0044
UTAH STATE TAX COMMISSION, :
STATE OF UTAH, : Account No. #####
:
Respondent. : Tax Type: Corporate Franchise
_____________________________________
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 March 23, 1998. G.
Blaine Davis, Administrative Law Judge, heard the matter for and on behalf of
the Commission. Present and
representing Petitioner were PETITIONERS REP1., General Counsel for Petitioner,
together with PETITIONERS REP.2, CPA, Manager of Tax and Restricted
Accounts. Present and representing
Respondent were Ms. Vickie Christoffersen and 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
is subject to the unrelated business income tax which is set forth in Utah Code
Ann. §59-7-801, et.seq., and pursuant to the provisions of Utah Code Ann.
§59-7-507, is required to make quarterly payments on said amount. The law was amended by the 1995 legislature,
to become effective May 1, 1995, but was given retrospective operation to
January 1, 1995.
Petitioner
was not aware of the changes in the law requiring prepayments, although they
had filed extensions of time in which to file the return, and they believed
they had until the return was filed in which to make payment of the tax.
Respondents
sent notice of the delinquency and of the penalty due, but not until
Petitioners had missed making the prepayments for most of the second year. Further, the notices sent by Respondent did
not identify the tax at issue, so Petitioner did not know the reason for the
proposed penalty.
Ultimately,
Petitioner requested a waiver of the penalty, and the penalty was waived for
the first year, and it was reduced for the second year to a two percent (2%)
underpayment penalty. However,
Petitioner has now requested a waiver of the balance of the penalty for the
second year. They site their good
record and the fact that this was not a problem of them failing to file or pay
for a return which they knew was due, but was a matter wherein they were caught
unaware by the change in the law.
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 penalty
associated with the underpayment of their unrelated business income tax for
1996. 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 15 day of April, 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 15 day of April, 1998.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val
Oveson Richard
B. McKeown
Chairman Commissioner
Joe B.
Pacheco Pam
Hendrickson
Commissioner Commissioner
^^