LMR Computing Technologies

07-07

The Taxpayer established a sole proprietorship in July 2002.  In January 2003, the Taxpayer filed his first CRS return to report gross receipts taxes due for the 6-month period ending December 31, 2002.  After seeing the amount of paperwork involved, the Taxpayer hired a tax service to assist him with his tax filing.  The tax service advised the Taxpayer to begin making estimated income tax payments, which the Taxpayer assumed also covered his gross receipt tax liability.  The Taxpayer did not, however, file CRS returns for subsequent reporting periods, nor did he question the tax service about these returns.  In early 2004, the Taxpayer learned that his estimated payments did not cover gross receipts taxes.  A tax service employee advised the Taxpayer to wait until his personal income tax return was completed before doing anything to bring his gross receipts tax filing up-to-date.  The employee left the tax service without completing the Taxpayer’s returns, but he did not discover the problem until he called the tax service in July 2004.  After another employee was assigned to his account, the Taxpayer filed his delinquent CRS returns for reporting periods January 2003 through June 2004.  The Department subsequently assessed the Taxpayer for penalty and interest on his late payment.  The Taxpayer protested, arguing that he was justified in relying on the tax service to advise him on his tax filing obligations.  Held:  There is no basis for abating penalty or interest.  The Taxpayer was negligent in failing to insure that required CRS returns were filed in a timely manner and in failing to act promptly when he discovered his returns were delinquent.  Protest denied.