98-0714

Withholding Tax

Signed 10/23/98

 

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

PETITIONER, :

: ORDER

Petitioner, :

: Appeal No. 98-0714

v. : Account No. #####

:

AUDITING DIVISION OF : Tax Type: Withholding Tax

THE UTAH STATE TAX )

COMMISSION, : Presiding: Pacheco

:

Respondent. :

_____________________________________

Presiding:

Joe B. Pacheco, Commissioner

Appearances:

For Petitioner: PETITIONER, by telephone

For Respondent: Mr. Brent Taylor, from the Auditing Division

STATEMENT OF THE CASE

This matter came before the Utah State Tax Commission for a Status Conference and was therein converted to an Initial Hearing to be conducted pursuant to the provisions of Utah Code Ann. §59-1-502.5, on October 15, 1998.

The issue in this appeal is based on an audit assessment based on Petitioners failure to properly report amounts withheld and reported on the W2's and the annual reconciliation of withholding taxes.

APPLICABLE LAW

1. A 10% penalty is assessed pursuant to Utah Code Ann.§59-1-401(5)(a) for failure to reconcile tax withheld with W2's as required under Utah Code Ann.§59-10-406(2).

2. Pursuant to Utah Code Ann.§59-10-537(1); "If any amount of income tax is not paid on or before the date prescribed in this chapter for payment, interest on such amount at the rate and the manner prescribed in §59-1-402 shall be paid".

3. 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

Petitioner requests a waiver of the penalty and interest added to the assessment of the audit of the W2 reconciliation. Petitioner indicates that their research of their tax payments indicate that a list of checks for each of the seven months in question were issued to the State of Utah for payment of the taxes for each of the respective months. However, they did recognize that the checks were yet uncashed. Petitioner says they immediately stopped payment on these checks and issued a check for they payment of the tax to the State of Utah upon notification of the tax assessment. Respondent indicated that the returns had been received but the payment for each of the seven months in question had not been paid in timely fashion in 1994, therefore a penalty should be assessed and the interest should stand. The commission finds that reasonable cause under the first time error cause exists to waive the penalty of $$$$$ however, the Commission upholds the assessment of the interest in this case as the State of Utah was denied the use of funds for that period of time and has not found sufficient reasonable cause to waive the interest assessment.

This decision does not limit a party's right to a Formal Hearing. However, this Decision and Order will become the Final Decision and Order of the Commission unless any party to this case files 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, Utah 84134

Failure to request a Formal Hearing will preclude any further appeal rights in this matter.

DATED this 23 day of October, 1998.

____________________________________

Joe B. Pacheco

Commissioner

BY ORDER OF THE UTAH STATE TAX COMMISSION.

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

DATED this 23 day of October, 1998.

Richard B. McKeown Pam Hendrickson

Chairman Commissioner

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