Signed 6/23/98

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

PETITIONER, :

: ORDER

Petitioners, :

: Appeal No. 98-1104

v. : Account No. #####

AUDITING DIVISION OF : Tax Type: Income Tax

THE UTAH STATE TAX )

COMMISSION, : Judge: Davis

Respondent. :

_____________________________________

Presiding:

G. Blaine Davis, Administrative Law Judge

Appearances:

For Petitioner:

For Respondent: Mr. Tim Bodily, Assistant Attorney General

Mr. Dan Engh, Mr. Frank Hales and Mr. Steve Nielsen, from the Auditing 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 June 1, 19999.

The Auditing Division received a notice from the Internal Revenue Service that Petitioner had filed a federal income tax return showing Utah as his address, but he had not filed a State of Utah return. Therefore, the Auditing Division made an audit assessment based upon the income shown in Petitioners federal return.

Petitioner claims that his income is not subject to tax in Utah because such a tax would be unconstitutional. His position is a direct tax cannot be imposed upon individuals which is not apportioned by population. He suggests that a tax may only be an excise tax which can be imposed if there is a contract with him. Petitioner also filed an affidavit saying he was not a person required to file a 1040 federal return, but he did in fact file such a federal return.

Petitioner has not challenged that the income recieved and reported on his federal return was not Utah income, and the address at which he was living during that time was within the State of Utah.

Respondent has filed a Motion to Dismiss or for other sanctions, based upon the failure of Petitioner to provide answers to discovery, including their failure to comply with the order to compel discovery. It is clear the Motion to Dismiss should be granted. However, in view of the decision reached on this case, a ruling on the Motion to Dismiss is not necessary.

APPLICABLE LAW

Resident and nonresident individuals are required to file an income tax return (U.C.A.59-10-502) on the state taxable income as determined in U.C.A.59-10-111 and 112.

DECISION AND ORDER

Based upon the foregoing, the Commission determines that the Petition for Redetermination filed by Petitioner herein is without merit, and is in fact frivolous, and the Commission therefore sustains the audit assessment made by Respondent herein.

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 23RD day of June, 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 23rd day of June, 1999.

Richard B. McKeown Pam Hendrickson

Chairman Commissioner

R. Bruce Johnson Palmer DePaulis

Commissioner Commissioner