Response
October 30, 1992
Request
December
4, 1992
Mr.
Joe Pacheco
Commissioner
Utah
State Tax Commission
Heber
M. Wells Building
160
East Third South
Salt
Lake City, Utah 84134
RE:XXXXX
Dear
Joe:
Enclosed
is a letter which I have previously provided to the Commission. This letter now
has inserted a statement which I believe encompasses our agreement on the XXXXX
matter. I would appreciate your signing and returning a copy of the letter so
that it might be attached to the
composite return which XXXXX files.
Should
you have questions or require further clarification, please let me know.
Very
truly yours,
XXXXX
XXXXX,
Partner
Mr.
Joe B. Pacheco, Commissioner
Utah
State Tax Commission
160
East Third South
Salt
Lake City, Utah 84134
RE: Composite Partnership Refund Return
Dear
Joe:
In
response to your letter dated October 30, 1992, I am writing to request a
redetermination of your conclusion in that letter. I will present additional materials to you which should, in my
opinion, make is possible for the Tax Commission to rule favorably upon the
request made earlier to allow composite refund filing.
Very
truly yours,
XXXXX
XXXXX,
Partner
Commissioners
Utah
State Tax Commission
160
East Third South
Salt
Lake City, Utah
RE:
Composite Partner
Dear
Sirs:
I
am writing to provide additional information with regard to the question of the Tax Commission allowing
a composite partnership refund return based on facts previously submitted. By
way of background, I had written to the Utah State Tax Commission in a letter
dated XXXXX, requesting that the Commission allow a composite refund return for
certain tiered partnerships which have over 2,000 partners in partnerships with
Utah interests. The Tax Commission ruled unfavorably in response to our request
in a letter dated XXXXX. You agreed to hear this matter in an informal hearing
scheduled for XXXXX.
I
am now writing to provide further information for your consideration in this
matter. All of the partners which would be included in the composite refund
return are non-resident alien partners. They are located outside of the United
States. None of the partners have any other Utah-sourced income other than the
income from the identified partnerships. Our XXXXX office has power of attorney
for all limited partners. None of the partners would individually file a return
to claim a credit which would be included on a composite return. Therefore,
there would be no possibility of a double credit being claimed. The
partnerships which have Utah-sourced income and foreign partners include the
following entities:XXXXX (U.S.A.); XXXXX; XXXXX; XXXXX; and XXXXX. If a
composite filing is allowed, limited partners would be identified.
Additionally, it should be noted that the mineral properties have been sold
which would make it unnecessary to grant a request of this nature in the
future.
Your
favorable consideration of this matter would be very much appreciated.
Very
truly yours,
XXXXX
XXXXX,
Partner
Commissioners
Utah
State Tax Commission
160
East Third South
Salt
Lake City, Utah 84
RE:
Composite Partner
Dear
Sirs:
I
am writing to provide additional information with regard to the question of the Tax Commission allowing
a composite partnership refund return based on facts previously submitted. By
way of background, I had written to the Utah State Tax Commission in a letter
dated XXXXX, requesting that the Commission allow a composite refund return for
certain tiered partnerships which have over 2,000 partners in partnerships with
Utah interests. The Tax Commission ruled unfavorably in response to our request
in a letter dated XXXXX. You agreed to hear this matter in an informal hearing
scheduled for XXXXX.
I
am now writing to provide further information for your consideration in this
matter. All of the partners which would be included in the composite refund
return are non-resident alien partners. They are located outside of the United
States. None of the partners have any other Utah-sourced income other than the
income from the identified partnerships. Our XXXXX office has power of attorney
for all limited partners. None of the partners would individually file a return
to claim a credit which would be included on a composite return. Therefore,
there would be no possibility of a double credit being claimed. The
partnerships which have Utah-sourced income and foreign partners include the
following entities: XXXXX (U.S.A.); XXXXX; XXXXX; XXXXX; XXXXX; XXXXX; and
XXXXX. If a composite filing is allowed, limited partners would be identified.
Additionally, it should be noted that the mineral properties have been sold
which would make it unnecessary to grant a request of this nature in the
future.
Your
favorable consideration of this matter would be very much appreciated.
Very
truly yours,
XXXXX
XXXXX,
Partner
The
Utah State Tax Commission will allow a refund composite filing in the
circumstances described in this letter. As a condition, XXXXX, agrees to
provide the names of the limited partners; a representation that the limited
partners have no other Utah-sourced income; and a representation that no
limited partner will file a return claiming a credit. We will allow refund
composite returns to be filed for the XXXXX calendar year as well as the XXXXX
calendar year. A refund return for XXXXX will be accepted provided XXXXX,
represents no individual limited partner would have had a tax-due return. We
also agree that no penalties will be imposed for the late filing of the XXXXX
calendar year.
FOR
THE UTAH STATE TAX COMMISSION
Joe
B. Pacheco 12/8/92
XXXXX,
Partner
RE:
Requested Refund on Composite Partnership Return
Dear
XXXXX:
Your
recent request for an advisory opinion concerning a waiver of the requirement
of R865-9-13I that precludes nonresident partners from being included in
composite partnership returns if they are entitled to mineral production
withholding credits, 675R's, or other credits was referred to the Auditing
Division for their analysis. The division's recommendations are as follows:
l.
The basic intent of the Mineral Production Withholding tax is to insure that
recipients of mineral production proceeds are paying tax on income derived from
Utah sources.
This
is accomplished by each corporation or individual filing returns and properly
reporting Utah income and applicable 675R credits. If the individual or
corporation fails to file then Utah retains the 4% as withheld as an
approximation of the tax due.
2.
Utah State Tax Commission Administrative Rule R865-9-13I(C) allows partnerships
to file composite returns on behalf of nonresident partners that meet certain
conditions. R865-9-13I does not require or dictate that composite returns must
be filed on behalf of nonresident partners.
3.
The intent of composite filing for nonresident partners is to facilitate the
payment of tax due to the State of Utah on behalf of nonresident partners with
no other Utah sources of income or credits that should apply individually. It
was not intended that a composite return be a means to facilitate refunds to
partnerships.
4.
It is our opinion that a refund to a partnership is not allowed by statute or
rule.
Based
upon the facts presented in your letter, we are in agreement with the Auditing
Division's recommendations. Obviously, if there are deviations from these
facts, this opinion may be negated.
If
you do not agree with this determination, you may appeal to the Tax Commission
for a formal hearing. The results of that hearing would constitute a
declaratory judgment and be appealable to the Utah State Supreme Court. A
Notice of Appeal Rights and copy of the Utah Taxpayer Bill of Rights are
attached.
For
the Commission,
Joe
B. Pacheco,
Commissioner
Mr.
Joe Pacheco
Utah
State Tax Commission
160
East Third South
Salt
Lake City, Utah 84134
Dear
Joe:
I
am writing to inquire as to the status of our request to file a block return. A
copy of our previous correspondence is enclosed. Could you please respond as
the due date for the return date is approaching.
Your
prompt attention to this matter would be appreciated. If you have questions,
please call.
Very
truly yours,
XXXXX
XXXXX,
Partner
Joseph
B. Pacheco, Commissioner
Utah
State Tax Commission
160
East Third South
Salt
Lake City, Utah 84134
Dear
Joe:
In
line with our conversation I am writing to request an advisory opinion from the
Utah State Tax Commission regarding the following situation.
A
client in our XXXXX office has several tiered partnerships with investments in
real estate and oil and gas interests throughout the United States. The
partnerships have over 2,000 partners involved in the partnerships with Utah
interests. Our XXXXX office is jointly responsible for the completion of the
limited partnership returns and also the partners federal and state tax
returns. All of the investors are foreign individuals or Corporations which are
predominately German. Several of the mineral partnerships held in interest in
Utah property. As a result of this ownership, taxes were withheld under the
Mineral Withholding Provisions by the State of Utah. The XXXXX withholding was
applied to XXXXX because the mineral interest was disposed of in XXXXX. The
total withholding amount for all partnerships with an interest in Utah property
total $$$$$ for XXXXX and $$$$$ for XXXXX. Our office has been given Powers of
Attorney for all of the limited partners. Based on the knowledge of our XXXXX
office, none of the limited partners have any other interests or income which
would be sourced to the State of Utah.
Regulation
R865-9-13I specifically authorizes the filing of a composite partnership
return. However, paragraph lCl(3) indicates a ". . . composite return
cannot be filed if the individual nonresident partners are entitled to credits
such as 675R's, agricultural off highway gas tax credits or other Utah credit,
.- . ." This provision suggests that the 2,000 limited partners must each
file an individual TC-40NR.
We
specifically request that a waiver to this requirement be granted to allow the
respect partnerships to file composite returns requesting appropriate refund
for the excess mine withholding tax. If this request is granted, overall
compliance with the tax rules in Utah will be achieved. This will ease the
compliance burdens otherwise imposed on both the limit partners and the Utah
State Tax Commission in processing over 2,000
returns, which would otherwise be required. Your favorable approval of
this request will be very much appreciated.
If
you have other concerns or require further information with respect to this
matter, please feel free to contact the undersigned.
As
an additional point, this matter is of some urgency as the returns are due on
or before XXXXX. Accordingly, your prompt response will be very much
appreciated
Very
truly yours,
XXXXX,
Partner