Free Pub-17, Utah waivers, Reasonable Cause - Utah


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tax.utah.gov

Publication 17
Revised 5/08

Waivers
Reasonable Cause

Utah State Tax Commission 210 North 1950 West Salt Lake City, Utah 84134 (801) 297-6299 1-800-662-4335, ext. 6299 www.tax.utah.gov

If you need an accommodation under the Americans with Disabilities Act, contact the Tax Commission at (801) 297-3811, or TDD (801) 297-2020. Please allow three working days for a response.

General Information
The Tax Commission has the authority to waive, reduce or compromise penalties or interest for reasonable cause. (Utah Code §59-1-401(13) and Tax Commission Rule R861-1A-42). If you believe you should be granted a waiver, you must file an application in writing with appropriate supporting documentation. You will need to demonstrate good reasons why the Tax Commission should waive or reduce any penalties or interest. If the request is denied, you have a right to appeal. Procedures for filing appeals are found in the Administrative Procedures Act (Utah Code §63-46b-3) and Tax Commission Administrative Rules (Utah Administrative Code).

Reasonable Cause
The following clearly documented circumstances may constitute reasonable cause for a waiver of penalty: A. Timely Mailing: You mailed the return with payment to the Tax Commission by the due date and it was not timely delivered by the post office through no fault of your own. These claims should be supported by appropriate documentation. In cases where you cannot document a post office error, the penalties may be waived if you can meet the following requirements: 1. an excellent history of compliance; 2. sufficient funds were in the bank as of the date of payment, and that the check was written in numerical order; and 3. any documentation to show that the return or payment was mailed timely. B. Wrong Filing Place: The return or payment was filed on time, but was delivered to the wrong office or agency. C. Death or Serious Illness: The death or serious illness of a taxpayer or a member of the immediate family caused the delay. With respect to a business, trust or estate, the death or illness must have been of the individual, or the immediate family, who had sole authority to file the return. The death or illness must have occurred on or immediately prior to the due date of the return. D. Unavoidable Absence: The person having sole responsibility to file the return was absent from the state due to circumstances beyond his or her control. E. Disaster Relief: A delay in reporting, filing or paying was due either to a federal or state declared disaster or to a natural disaster, such as fire or accident, that results in the destruction of records or disruption of business. If delinquency or delay is due to a federal declared disaster, federal relief guidelines shall be followed. In the absence of federal guidelines, and for other listed disasters, you must demonstrate the matter was corrected within a reasonable time, given the circumstances.

Waiver Procedures
A request for waiver of any penalties and/or interest will be considered when: a. you provide a signed statement requesting a waiver; b. the total tax owed for the period(s) has been paid; c. the tax liability is based on a return you filed with the Tax Commission (not on an estimate provided by you or one of our auditors); and d. you have not previously received a waiver review for the same period(s). When we receive the waiver request, we will: a. review the request; b. notify you if additional documentation is needed to consider the waiver request; and c. review the account history for prior waiver requests, taxpayer deficiencies, and historical support for the reason given. Grounds for waiving interest are more stringent than for penalty. To be granted a waiver of interest, you must prove that the Tax Commission gave you erroneous information or took inappropriate action that contributed to the error.

F. Reliance on Erroneous Tax Commission Information: Underpayments and late filings or payments were attributable to incorrect advice obtained from the Tax Commission, unless you gave the Commission inaccurate or insufficient information. Proof of erroneous information may be based on written communication provided by the Commission or, if you can clearly document, verbal communication, which should include dates, times and names of Commission employees who provided the information. A failure to comply will also be excused if it can be demonstrated that you requested the necessary tax forms and instructions timely, and the Tax Commission failed to timely provide them. G. Tax Commission Office Visit: You prove that before expiration of the time period, you visited a Tax Commission office for information or help in preparing the return and a Tax Commission employee was not available for consultation. H. Unobtainable Records: For reasons beyond your control, you were unable to obtain records to determine the amount of tax. I. Reliance on Competent Tax Advisor: You fail to file after furnishing all necessary and relevant information to a competent tax advisor, who incorrectly advised you that a return was not required. You are required, and have an obligation, to file; reliance on a tax advisor to prepare a return does not automatically constitute reasonable cause for failure to file or pay. You must demonstrate that ordinary business care, prudence, and diligence were exercised in determining whether to seek further advice. J. First Time Filer: It is the first return required to be filed and the taxes were filed and paid within a reasonable time. The Commission may also consider waiving penalties on the first return after a filing period change if filed and paid within a reasonable time.

K. Bank Error: Your bank has made an error in returning a check, making a deposit or transferring money. A letter from the bank verifying its error is required. L. Compliance History: The Tax Commission will consider your recent history for payment, filing, and delinquencies in determining whether a penalty may be waived. The Commission will also consider whether other tax returns or reports are overdue at the time the waiver is requested. M. Employee Embezzlement: You can show that failure to pay was due to employee embezzlement of the tax funds and you were unable to obtain replacement funds from any other source. N. Recent Tax Law Change: Your failure to file and pay was due to a recent change in tax law and you could not reasonably be expected to be aware of the change. The Tax Commission allows for equitable considerations in determining reasonable cause. These include: 1) whether the Tax Commission had to take legal means to collect the taxes, 2) if you catch and correct your own error, 3) the length of time between the event cited and the filing date, 4) typographical or other written errors, and 5) other factors it deems appropriate. Other clearly supported extraordinary and unanticipated reasons for late filing or payment, which demonstrate reasonable cause and the inability to comply, may justify a waiver of the penalty. In most cases, ignorance of the law, carelessness, or forgetfulness does not constitute reasonable cause. Other supporting circumstances may indicate that reasonable cause for waiver exists. Intentional disregard, evasion, or fraud does not constitute reasonable cause under any circumstance. Each case is judged on its individual merits.

This publication is to be used as a guideline only, and does not reflect the complete standards for waiver of penalty and/or interest.

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