Free Pub-40 (new) - Utah

tax.utah.gov

Publication 40
Revised 5/03

Personal Liability
for Unpaid Sales, Fuel and Withholding Taxes

Utah State Tax Commission Taxpayer Services Division 210 North 1950 West Salt Lake City, Utah 84134 (801) 297-7703 1-800-662-4335 www.tax.utah.gov
The purpose of this publication is to advise individuals with control of the finances of a corporation, LLC, LLP, partnership, or other entity, that they may be held personally liable for that entity's failure to collect or remit certain "trust fund" taxes. Trust fund taxes are monies that the entity is required to collect or withhold on behalf of the State of Utah. The following taxes are trust fund taxes: · Sales and use tax (combined state and local options) · Town option sales tax · Transient room and tourism taxes on motel/hotel accommodations · Resort communities tax · Tourism tax on sales of prepared food (restaurants) · Statewide and tourism taxes on short-term motor vehicle rentals · Motor fuel, clean fuel, special fuel, and aviation fuel tax · Withholding tax

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.

· A court-appointed trustee · Any other person who had significant control over the finances of a business or who determined which creditors would be paid

How to Determine Responsibility
In reaching the determination that an individual is responsible, the Tax Commission will ascertain who had the duty, responsibility, and authority to do any of the following: · Sign checks · Hire and fire employees · Sign tax returns · Sign or authorize payroll · Control corporate voting stock, either totally or partially · Determine which creditors were paid

What Records May Be Used
The determination of responsible individuals will be based upon research and investigation of the following: · Tax Commission internal records, including filed returns · Department of Commerce files, including UCC filings · Documents prepared by the business entity · Other legal documents · Bank records · Corporate meeting minutes · Testimony of the business entity · Testimony of witnesses · Internal Revenue Service documents · Employment Security information · Other relevant information

Personal Liability
Utah Code Ann. Section 59-1-302 provides that if an entity that is required to collect trust fund taxes fails to collect or remit those taxes, the Tax Commission shall assess a penalty equal to 100 percent of the unpaid trust fund taxes on any responsible individual within the entity. Assessment of the penalty may result in the filing of a lien for delinquent taxes which carries the same force as a court judgment and may be executed against real and personal property of the responsible individual.

Who is Responsible
A responsible individual is one who had the duty or the power to direct the collection, accounting, or remittance of trust fund taxes to the Tax Commission at the time the delinquency occurred. A responsible individual may be: · An officer, director, or shareholder of a corporation · Another corporation or partnership · A partner in a partnership · A lender · An employee of a corporation, partnership, or proprietorship

Tax Commission Responsibility
Pursuant to its statutory obligations, the Tax Commission will make every effort to ensure that trust fund taxes are protected, responsible individuals are assessed, and amounts due are collected in the most fair, responsible, and efficient manner possible.

Items listed in this publication are examples only. Other evidence may also be considered.