Opinion ID: 1205197
Heading Depth: 1
Heading Rank: 4

Heading: penalty assessment

Text: The Auditing Division imposed a penalty on the deficiency assessment. Union Pacific did not contest the penalty before the Commission but does so before this court. The Commission may assess a penalty for negligent, intentional, or fraudulent underpayment of tax. Utah Code Ann. § 59-1-401(3). In applying the penalty, the Auditing Division and the Commission should not mechanically assess a penalty in every case of underpayment. Instead, they should determine in each case whether the taxpayer negligently, intentionally, or fraudulently underpaid. Because Union Pacific did not raise the issue before the Commission, we have no basis in the record upon which to review the imposition of the penalty. It does not appear, however, that either the Auditing Division or the Commission has made the finding of negligence, intentional disregard, or fraud necessary to justify a penalty under section 59-1-401(3). Because we are remanding this matter for other proceedings, we vacate the imposition of the penalty and remand this issue for reconsideration by the Commission and specific findings and conclusions regarding a penalty.