98-1044
INCOME TAX
Signed 1/11/99
BEFORE THE
UTAH STATE TAX COMMISSION
____________________________________
PETITIONER, )
) ORDER
Petitioners, )
) Appeal No. 98-1044
v. ) Account No. #####
)
CUSTOMER
SERVICE DIVISION OF ) Tax Type:
Income Tax
THE UTAH STATE
TAX )
COMMISSION, ) Presiding: Davis
)
Respondent. )
_____________________________________
Presiding:
G. Blaine
Davis, Administrative Law Judge
Appearances:
For Petitioner:
For Respondent: Mr. Gale Francis, Assistant Attorney
General
Ms. Julie
Halvorson, from Customer Service Division
Mr. Brent
Barney, from Customer Service Division
STATEMENT
OF THE CASE
This matter
came before the Utah State Tax Commission for an Initial Hearing pursuant to
the provisions of Utah Code Ann. '59-1-502.5, on December 17, 1998.
On April 16,
1990 and April 15, 1991, Petitioners filed and paid their original 1989 and
1990 Utah individual income tax returns.
One of the
items on Petitioners tax returns for 1989 and 1990 involved the results of operation of a partnership in which the
Petitioners were partners. That
Partnership tax return was audited, which ultimately went through the appeals
process at the Internal Revenue Service and then on to U.S. Tax Court, docket
numbers 209-89, and 27532-91. Following
the court decision from the U.S. Tax Court, Petitioners filed an amended US
individual income tax return with the Internal Revenue Service for tax years
1989 and 1990. That amended tax return
was filed with the Internal Revenue Service on or about October 31, 1994.
The Internal
Revenue Service accepted and posted the 1989 and 1990 amended tax returns for
Petitioners on February 27, 1995. At
that time, Petitioners did not file an amended income tax return with the Utah
State Tax Commission for 1989 and 1990.
Petitioner claims that he called the Tax Commission and requested forms,
but they were out of forms for 1989 and 1990, and indicated they would send him
some forms. Petitioners never received
the forms, and did not follow up to try to obtain forms and file an amended
return.
On October 8,
1997, the Auditing Division sent Petitioners a letter requesting that they file
amended returns for 1984 and 1985, which was a result of the basis adjustments
made by the Internal Revenue Service.
Those Basis adjustments also affected the returns for the years of 1989 and 1990. On November 5, 1997, Petitioners filed with the Utah State Tax
Commission amended income tax returns for the years 1989 and 1990, which were
based on the amended returns they had filed with the Internal Revenue Service
in February, 1995. The amended returns
filed with the State of Utah for 1989 and 1990 provided for refunds, whereas
the amendment for 1984 and 1985 required the payment of additional taxes.
Respondents
have not allowed the refunds because of statute of limitations problems
provided by Utah Code Ann. '59-10-529 and '59-10-536. Respondent required the payment of the
additional taxes for 1984 and 1985.
The refund
request for 1989 is $$$$$, and for 1990 is $$$$$.
The position of
Petitioner is that because the Auditing Division accepted the 1984 and 1985
amended tax returns which required the payment of additional taxes, but denied
the refund claims for the 1989 and 1990 returns, he is being denied equal
protection of the laws under the fourteenth amendment to the United States
Constitution.
Pursuant to
Utah Code Ann. '59-10-529(14)
and '59-10-536(5),
Petitioners had ninety days plus two years, or to and including May 28, 1997,
in which to file claims for refunds or credits resulting from the changes made
to their federal returns. Petitioners
did not file their amended returns, or claims for refund, until November 5,
1997, more than five months after the period for doing so ended.
APPLICABLE
LAW
Utah Code Ann. '59-10-529(14),
requires that if a report from the Internal Revenue Service requires a change
or correction in federal taxable income, an amended return must be filed with
the Utah State Tax Commission within two years of the date the notice of the
change, correction, or amended return was required to be filed with the
Commission.
Utah Code Ann. '59-10-536
requires that changes in federal income tax returns must be communicated to the
Tax Commission within ninety days after the final determination of such change
by filing a copy of the amended federal return and amended state return with
the Commission. These two provisions
combined give taxpayers a total of two
years plus ninety days after the action by the Internal Revenue Service in
which to file claims for refund.
DECISION AND
ORDER
Based upon the
foregoing it is the decision and order of the Commission that Petitioners'
claim for refund, as filed on their amended tax returns, is hereby denied. The amended returns were not filed within
the required time period, and therefore refunds indicated on such amended
returns may not be paid. Petitioners
constitutional claims are not for decision by this Commission. The Commission is prohibited from holding
any statute unconstitutional. The
position of Respondent is clearly consistent with the statutes duly and
properly passed by the legislature. The Petition for Redetermination is
denied. It is so ordered.
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 11TH
day of January, 1999.
____________________________________
G. Blaine Davis
Administrative Law Judge
BY ORDER OF THE UTAH STATE TAX
COMMISSION.
The Commission
has reviewed this case and the undersigned concur in this decision.
DATED this 11th
day of January, 1999.
Richard B. McKeown Joe B. Pacheco
Chairman Commissioner
Pam Hendrickson R.
Bruce Johnson
Commissioner Commissioner
^^