96-167
Response November 6, 1996
Request
August 27, 1996
Utah State Tax Commission
210 N 1950 W
Salt Lake City UT 84134
RE: XXXXX
To Whom It May Concern:
Our Client, XXXXX, has asked us to respond to a
couple of notices they have received. I
have enclose a copy of these notices for your convenience.
The Utah State Legislature has made it very clear
that the tax commission should be following the federal guidelines when
determining what is taxable income with a few exceptions. The Utah State Tax Commission has taken the
liberty to expand on a few of those exceptions way beyond what the legislature
has intended. One of those areas is in
the interpretation of the amount of state taxes deducted on the federal
return. The IRS laws are very clear in
the interpretation of the standard deduction.
It is very clear that there is a minimum amount allowed regardless of
the amount if itemized deductions you can actually support. The Utah Legislature has made it very clear
in the laws that the amount of State tax that needs to be added back is only
the amount that was a deducted on the federal return. The only amount that can be deducted on the federal return is the
amount that would bring the itemized deductions down to the standards of
deduction. The tax commission is
interpreting this to be the total amount of state income taxes deducted on
schedule A of the federal return. This
is contrary to the intent and the actual laws passed by the legislature.
The difference you are referring to on these notices
would be the amount that would take the deduction below the minimum standard
deduction allowed by the IRS and the state of Utah. The returns were originally filled correctly according the intent
and the actual law as passed by the legislature. I would hope you would do the correct thing in this case and
close out these notices as a properly filled tax return.
If you have any further questions, please contact me
at the numbers listed below.
Sincerely,
XXXXX
Accountant
XXXXX
Request for advisory opinion
Dear XXXXX
You
sent us a letter concerning XXXXX your objection to the Audit Division’s method
of adding back state and local taxes deducted from their federal adjusted gross
income. Because your clients are under
audit, we cannot issue an advisory opinion on the matter. At the conclusion of the audit, your clients
may appeal their assessment through our appeals process, and we will make a
determination on the issue at that time.
Please
let us know if you have other questions.
For
the Commission,
Joe
B. Pacheco,
Commissioner