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High Desert Bicycle Inc



On December 4, 2017, the Department denied the Taxpayer claim for refund for the penalty paid for the tax periods between January 1, 2016 and January 31, 2016. On January 10, 2018, the Department denied a second claim for refund for the penalty paid for the tax periods between June 1, 2014 and June 30, 2014. On February 27, 2018, the Department received a timely protest from the Taxpayer. The main issue to be determined in the protest is if the Taxpayer is entitled to the refund of the assessed penalties that were paid for the two periods at issue for failing to file timely returns. The Taxpayer argues that the late filings were due to non-negligence because it relied on the Department’s call center for information and that it was not notified by the Department that there was anything incorrect about the way that it had been filing its returns. During the time at issue, the Taxpayer had signed up to use the Departments online filing system. The Taxpayer was submitting payments to the Department but failed to file the returns associated with those payments. The error was located by the Taxpayer’s accountant and when the error was noticed all of the missing returns were filed in November of 2016. The Hearing Officer determined that because the Taxpayer found a way to continue submitting electronic payments that its intent was not to evade taxes. The Hearing Officer determined that the Taxpayer acted without negligence when relying on the advice from the Departments employee in the call center and that the penalty should be abated. For the forgoing reasons, the Taxpayer’s protest is granted.