Determination Form - New York Division Of Tax Appeals (Page 3 of 3) in pdf

B. With regard to penalty imposed on sales tax asserted due with regard to the two notices pertaining to the

petition designated DTA No. 819724, such petition must also be denied. Petitioner has simply failed to

demonstrate a cause for its delinquency which would appear to a person of ordinary prudence and intelligence

as a reasonable cause for delay in paying sales and use taxes. In the words of the Tax Appeals Tribunal, in

establishing reasonable cause, the taxpayer faces an "onerous task" (Matter of Philip Morris, Inc., Tax Appeals

Tribunal, April 29, 1993). The Tribunal explained why the task is onerous as follows:

By first requiring the imposition of penalties (rather than merely allowing them at the

Commissioner's discretion), the Legislature evidenced its intent that filing returns and paying tax

according to a particular timetable be treated as a largely unavoidable obligation [citations

omitted]" (Matter of MCI Telecommunications Corp., Tax Appeals Tribunal, January 16, 1992).

Petitioner's claim that certain individuals employed by the Division failed to provide it with the option of a

deferred payment agreement in an allegedly timely fashion does not establish a reasonable cause for its delay in

paying such taxes. The Division persuasively points out that petitioner's filing of 22 returns without remittance

of the tax reported due "suggests more than a simple misunderstanding" but rather "compellingly suggests that

the non-payments could not have been inadvertent, otherwise attributable to an oversight or could not be

rectified within a shorter period of time." This is especially so, given the volume of petitioner's taxable sales,

which during one quarter at issue, as noted in Finding of Fact "1", reached $1,000,000.00. Furthermore, there is

no statutory basis for the abatement of ordinary interest, while the abatement of penalty interest also required

petitioner to establish a reasonable cause for its delay in paying the taxes at issue which, as noted above, it has

failed to do (see, Matter of Barrier Oil, Tax Appeals Tribunal, July 29, 1999).

C. The petitions of Rockwells Restaurant Corp. are denied, and the two notices and demands dated May 5, 2003

and August 12, 2003, respectively, which were not the subject of the granting of tax amnesty to petitioner, are

sustained.

DATED: Troy, New York

May 12, 2005

/s/ Frank W. Barrie

ADMINISTRATIVE LAW JUDGE

1. For this sales tax quarter, only penalty was imposed for late payment of tax.

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