Publication 17 — Waivers, Reasonable Cause

# preamble

If you need an accommodation under the Americans with Disabilities Act, email taxada@utah.gov, or call 801-297-3811 or TDD 801-297-2020. Please allow three working days for a response. 210 North 1950 West Salt Lake City, Utah 84134 801-297-6299 1-800-662-4335, ext. 6299 Fax: 801-297-6358 tax.utah.gov waivers@utah.gov Waivers

Reasonable Cause

Revised 2/18

# General Information

The Tax Commission may waive or reduce penalties or interest for reasonable cause. See Utah Code §59-1-401(14) and Tax Commission Rule R861-1A-42. Y ou may request a waiver online or by fi ling a written application with supporting documentation. Y ou must show a good reason why the Tax Commission should waive or reduce any penalties or interest. Y ou have a right to appeal if we deny your request. See Administrative Procedures Act (Utah Code §63-46b-3) and Tax Commission Administrative Rules (Utah Administrative Code) for more information. Waiver Procedures We will consider a request for waiver of any penalties or interest when:  you request a waiver online (see below) or by email, or provide a signed waiver request with supporting documentation,  the total tax owed for the period(s) has been paid,  the tax liability is based on a return you fi led with the Tax Commission (not on an estimate), and  you have not already received a waiver review for the same period(s). When we receive the waiver request, we will:  review the request;  notify you if we need more documentation; and  review the account history for prior waiver requests, taxpayer defi ciencies, and evidence for your claim. It is harder to get interest waived than penalties because you must prove the Tax Commission gave you incorrect information or made an error that caused you to fi le or pay late. Online Request (only for tax types available through TAP) Y ou can request a waiver online through Taxpayer Access Point (TAP). After accessing TAP follow these steps: 1. Go to TAP.utah.gov. Businesses must login. 2. Click Request Payment Plan or Waiver. 3. Select P&I Waiver. 4. Choose the tax account and follow the instructions. Reasonable Cause We may fi nd a reasonable cause to waive penalties if you can prove any of the following: A. Timely Mailing: Y ou mailed your return and payment by the due date but the post offi ce did not deliver it on time. (Y ou must provide documentation). If you cannot document a post offi ce error, we may waive the penalties if you can show: 1. an excellent history of compliance; 2. suffi cient funds were in the bank on the date of payment 3. the check was written in numerical order; and 4. any proof that the return or payment was mailed timely. B. Wrong Filing Place: The return or payment was fi led on time, but was delivered to the wrong offi ce or agency. C. Death or Serious Illness: The taxpayer's death or serious illness (or that of an immediate family member) caused the delay. This also applies to a business, trust or estate, if the individual (or an immediate family member) had sole authority to fi le the return. The death or illness must have occurred on or immediately before the return due date. D. Unavoidable Absence: The person with sole responsibility to fi le the return was out of state due to circumstances beyond his or her control.

E. Disaster Relief: A federal or state-declared disaster or natural disaster, such as fi re or accident, destroyed records or disrupted business. Federal relief guidelines must be followed for a federally-declared disaster. For other disasters, you must show the matter was corrected in a reasonable time, given the circumstances. F. Reliance on Erroneous Tax Commission Information: Y ou received incorrect advice from the Tax Commission that led to the underpayment, late payment or late fi ling. This does not apply if you gave the Commission inaccurate or incomplete information. Proof may be based on written communication from the Tax Commission or verbal communication (include dates, times and names of Commission employees who provided the information). We may excuse a failure to comply if you can prove you requested the necessary tax forms timely but the Tax Commission did not provide them timely. G. Tax Commission Offi ce Visit: Y ou visited a Tax Commission offi ce for information or help in preparing the return before the due date, but Tax Commission employees were not there during Tax Commission business hours to help you. H. Unobtainable Records: Y ou were not able to get records to determine the tax due, for reasons beyond your control. I. Reliance on Competent Tax Advisor: Y ou gave all your tax information to a competent tax advisor who gave you incorrect advice, failed to fi le a timely return on your behalf, or failed to make a timely payment on your behalf. Y ou must fi le returns. Relying on a tax advisor to prepare a return does not automatically create reasonable cause for failure to fi le or pay. Y ou must give a tax advisor your tax information before a return's due date. Y ou must show you used normal care and diligence when you decided whether to seek further advice. J. First Time Filer: Y ou were late in fi ling the fi rst return you were required to fi le, but paid the tax within a reasonable time. The Tax Commission may also waive penalties on the fi rst return after a fi ling period change if you fi led and paid in a reasonable time. K. Bank Error: Y our bank made an error in returning a check, making a deposit or transferring money. Provide a letter from your bank explaining the error. L. Employee Embezzlement: An employee(s) embezzled tax funds and you couldn't get funds from any other source. M. Recent Tax Law Change: Y ou didn't fi le or pay because you were not aware of a recent tax law change. Y ou must prove you could not be expected to know of the change. The Tax Commission considers your recent account history when we decide whether or not to waive a penalty. We also consider whether other tax returns or reports are overdue when you request the waiver. Other factors may affect whether we fi nd reasonable cause. These include:  whether the Tax Commission had to take legal means to collect the taxes  whether you caught and corrected your own error(s)  the length of time between the event and the fi ling date  typographical or other written errors, and  other clearly supported extraordinary reasons for fi ling or paying late which show reasonable cause and an inability to comply. In most cases, ignorance of the law, carelessness or forgetfulness does not create reasonable cause. Intentional disregard, evasion or fraud does not constitute reasonable cause under any circumstance. Each case is judged on its individual merits.

# Pass-Through Entity

Waiver Request A pass-through entity that must withhold tax on partners/ members or shareholders (pass-through entity taxpayers) may request a waiver for the withholding tax and any associated penalty and interest if:  the pass-through entity did not withhold and pay the tax, and  the pass-through entity can show that pass-through entity taxpayer(s) fi led and paid tax on the Utah income by the pass-through entity's return due date, including extensions The waiver request must include all pass-through entity taxpayers' names and identifi cation numbers. Also include a statement that all pass-through entity taxpayers have fi led and paid the tax by the required date. See Utah Code §59-10-1403.2(5). This publication is to be used as a guideline only, and does not refl ect the complete standards for waiver of penalty and/or interest.