WAC 228

Definitions.

Deficient tax or Penalty payments-interest-Limitations

Penalty/Interest relief for military personnel

Excess payment of tax, penalty, or interest--Credit or refund--Payment of judgments for refund.

Obligations suspended during declared emergencies

Payment by check-Electronic funds transfer-Mailing returns or remittances-Time extension-Deposits-Records-Payment must accompanyreturn.

Electronic funds transfer - Generally.

Late payment-Disregard of written instructions-Evasion-Penalties.

Failure to file returns or provide records-Assessment of tax by department-Penalties and interest.

Late Payment Penalty - Employee Misconduct.

Waiver or cancellation of interest penalties.

Correction of tax--Administrative procedure--Conference-Determination by department

Tax warrant--Filing--Lien-Effect.

Returns, remittances, penalties, extensions, interest, stay of collection.Effective 3/12/01. Updated on March 6, 2007 effective on April 6, 2007.

Returns, payments, penalties, extensions, interest, stay of collection.

WAC 458-20-228 Returns, payments, penalties, extensions, interest, stay of collection discusses the responsibility of taxpayers to timely pay their tax liabilities, and the acceptable methods of payment. WAC 458-20-22801 Tax reporting frequency – forms describes the obligation for filing returns with associated payments for excise taxes reported to the Department of Revenue. The Department amended these rules to recognize the following legislation: SSB 5571 (Ch.

Returns, payments, penalties, extensions, interest, stay of collection. Recognize legislation that requires taxpayers to file and pay taxes electronically. Chapter 23, Laws of 2010, and chapter 24, Laws of 2011. Recognize legislation which imposes a 35% penalty for a tax deficiency resulting from a “disregarded transaction” under RCW 82.32.655. Chapter 23, Laws of 2010. Recognize legislation that updates language regarding the misuse of a reseller permit and “other documents” authorized by use under RCW 82.04.470. Chapter 112, Laws of 2010.

Substantial Underpayment Penalty Revised 2/2/09 See ETA 3114.2009

Substantial Underpayment Penalty

Certain Taxpayers to Pay Use Tax Directly to the Department of Revenue

New Due Date for Monthly Tax Return - Modified Electronic Payment Requirements - Billing Penalty Modified

Special Event Promoters and Vendors-New Requirements (Revised)

Penalty and Interest Waivers for Active Duty Military Personnel

Certain Taxpayers to Pay Use Tax Directly to the Department of Revenue

Important Information on Reporting the State Enhanced 911 Tax

Changes Affecting Tax Incentive Reports and Surveys

Certain Taxpayers to Pay Use Tax Directly to the Department of Revenue

Penalty Changes-The Cost of Making a Mistake Just Went Up

Special Event Promoters and Vendors-New Requirements

Late Payment Penalties Increase

PENALTY -- LATE PAYMENT OF TAX DUE -- UNREGISTERED TAXPAYER -- RULE 228'S SITUATION NUMBER 7 NOT APPLICABLE. Where taxes were assessed against a taxpayer for time period when not registered, Rule 228's situation number 7 is not applicable to excuse penalty. It applies only to late tax returns where payment is made within 30 days after the due date. Penalty sustained.

PENALTIES -- LATE PAYMENTS OF TAXES DUE -- EMPLOYEE'S FAILURE TO PERFORM DUTIES -- EMPLOYER'S LACK OF KNOWLEDGE OF EMPLOYEE'S NEGLECT. Taxpayer's clerk's medical problems caused her not to perform her duty of timely filing tax returns over an extended period of time. Taxpayer was not aware of situation. The failure of an employee to perform her duties is not a circumstance beyond the taxpayer's control. Penalties sustained.

PENALTIES -- LATE PAYMENTS OF TAXES DUE -- EMPLOYEE'S FAILURE TO PERFORM DUTIES -- EMPLOYER'S LACK OF KNOWLEDGE OF EMPLOYEE'S NEGLECT. Taxpayer's clerk's medical problems caused her not to perform her duty of timely filing tax returns over an extended period of time. Taxpayer was not aware of situation. The failure of an employee to perform her duties is not a circumstance beyond the taxpayer's beyond the taxpayer's control. Penalties sustained.

UNKNOWN TAX LIABILITY; SELECTIVE ENFORCEMENT. Lack of knowledge of a tax obligation is not a basis for abating tax or interest. The state is not required to inform a business of potential tax liability before it can impose taxes.

PENALTIES -- LATE PAYMENT -- WAIVER OR CANCELLATION -- TAX RETURN NOT RECEIVED BY TAXPAYER.The claim that a tax return was not received by a taxpayer did not justify the cancellation or waiver of a late payment penalty.The taxpayer did not make a timely request for a replacement return.Assuming that the return was not received, relief could not be granted because the taxpayer had prior unexcused penalties.

PENALTIES -- LATE PAYMENT OF TAX DUE -- SITUATION # 7 -- POST OFFICE DELAY -- ABSENCE OF POSTMARKED ENVELOPE. Taxpayer met criteria of Rule 228's situation # 7 for cancellation of penalty. Department did not retain postmarked envelope to overcome taxpayer's assertion that tax return was timely mailed. Postal service delay in delivery can be inferred only with situation #7 when so alleged.

PENALTIES -- LATE PAYMENT -- WAIVER OR CANCELLATION -- ILLNESS OF ACCOUNTANT. The taxpayer's claim that its bookkeeper's cocaine addiction was the cause for late payment of taxes did not suffice to waive or cancel penalties. The taxpayer did not relate the cocaine addiction to late payment; continued to make late payment after discovering the problem; failed to timely issue checks to cover its tax liability even though the returns were prepared by the bookkeeper prior to delinquency.

PENALTIES -- LATE PAYMENT -- WAIVER -- SITUATION (7) -- UNREGISTERED TAXPAYER.Penalty waivers under situation (7) require that all three requirements must be satisfied.Situation (7) requirements are not in the alternative.

PENALTIES -- WAIVER -- LACK OF KNOWLEDGE -- COOPERATION. Conditions for penalty waivers under Rule 228 do not include lack of knowledge or cooperation with registration.

TAX ASSESSMENT -- LATE PAYMENT -- 10% DELINQUENT PENALTY -- INTEREST -- TIMELY MAILING. Delinquent penalty and additional interest excused because of substantial evidence indicated that mailing of payment was postmarked on or prior to the due date.

PENALTIES -- LATE PAYMENT -- WAIVER -- SITUATION (7) -- UNREGISTERED TAXPAYER. Penalty waivers under situation (7) required that all three requirements must be satisfied. Situation (7) requirements are not in the alternative.

PENALTIES -- INTEREST -- WAIVER -- UNREGISTERED TP -- DISAGREEMENT AS TO REGISTRATION REQUIREMENT. Previous disagreement with the state as to whether out-of-state TP was required to register is not a basis under the statute or Rule 228 to abate penalties or interest.

INTEREST -- UNREMITTED SALES TAXES -- EMBEZZLEMENT BY BOOKKEEPER -- FALSIFICATION OF RECORDS BY BOOKKEEPER. Where taxpayer's bookkeeper embezzled funds and falsified records to conceal theft of money so that sales taxes collected were not remitted to the Department of Revenue, the circumstances involved (concealed and deceptive criminal conduct) are held to be beyond the control of the taxpayer and warrant waiver of interest.

PENALTIES OR INTEREST -- WAIVER -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER -- WHAT CONSTITUTES. Lack of knowledge of a tax obligation does not render failure to pay taxes "beyond the control" of the taxpayer within the meaning of RCW 82.32.105 and WAC 458-20-228 which allow the Department of Revenue to waive or cancel interest and penalties under limited situations.

PENALTIES -- LATE PAYMENT -- WAIVER -- LOST RETURN/PAYMENT IN MAIL -- SITUATION NO.7. TP requested waiver of late payment penalty alleging that its tax return and check had been lost in the mail. Waiver denied because situation No. 7 of rule requires no prior delinquent payments and full payment of the tax owed within 30 days of the due date. The fact that taxpayer wasn't made aware of the non-receipt by the Department until more than 30 days after the due date is irrelevant.

PENALTIES OR INTEREST -- WAIVER -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER -- WHAT CONSTITUTES. Lack of knowledge of a tax obligation does not render failure to pay taxes "beyond the control" of the taxpayer within the meaning of RCW 82.32.105 and WAC 458-20-228 which allow the Department of Revenue to wave or cancel interest and penalties under limited situations.

BUSINESS AND OCCUPATION TAX -- COLLECTION -- ESTOPPEL -- CHANGE OF POSITION BY STATE -- EFFECTIVE DATE. For the purpose of estopping the State from collecting taxes, a taxpayer cannot justifiably rely on the State's position or interpretation of a tax liability once the taxpayer has noticed that the state has changed its position even though the State has not yet adopted the new position as official policy.

INTEREST -- WAIVER -- EXTENSION OF DUE DATE FOR SOLE CONVENIENCE OF THE DEPARTMENT. Where Department did not issue Determination until four months after the telephone conference and did not issue an amended assessment until nine months after the Determination, interest was waived for the entire period starting three months after the conference.

PENALTIES/INTEREST -- LATE PAYMENT OF TAX ASSESSMENT. Retirement of bookkeeper and time required for taxpayer's own post-assessment examination of its records are not waiver-justifying circumstances beyond the taxpayer's control.

PENALTIES AND INTEREST; OUT-OF-STATE MANUFACTURER -- LACK OF KNOWLEDGE. If a taxpayer fails to pay taxes as required, the Department shall assess the tax and shall add interest and penalties due. RCW 82.32.050; RCW 82.32.100. Lack of knowledge of a tax obligation or voluntary compliance once an obligation is known are not identified by statute or rule asa basis for abating interest or penalties.

PENALTIES -- LATE FILING -- WAIVER -- TURNOVER OF TAXPAYER PERSONNEL -- PREGNANCY LEAVE. State tax returns were filed late because office manager went on pregnancy leave, her replacement quit, and the second replacement was unfamiliar with tax-reporting requirements.Held: no penalty waiver based on either an illness or unavoidable absence theory.

PENALTIES -- LATE PAYMENTS OF TAXES DUE -- EMPLOYEE'S FAILURE TO PERFORM DUTIES. Taxpayer's bookkeeper's personal problems caused him not to perform his duty of timely filing tax return. The failure of an employee to perform his duties is not a circumstance beyond the taxpayer's control. Penalties sustained.

INTEREST.Department does not have authority to cancel interest because a taxpayer tried to determine its tax liability and report correctly.

INTEREST -- WAIVER -- AUDIT -- DUTY OF DEPARTMENT. The Department is under no duty to audit a taxpayer's records. Interest will not be waived because the Department did not conduct an audit sooner.

WAIVER OF PENALTIES AND INTEREST -- ORAL MISINFORMATION -- EFFECT OF. Incorrect oral advice by a Department employee relating to tax liability is not binding on the Department due to the difficulty of ascertaining the nature of the taxpayer's inquiry and the content of the advice. The burden is placed on the taxpayer to obtain correct information concerning its tax liability. ACCORD: Det. 86-232, 1 WTD 93 (1986); ETB 419.32.99.THIS DETERMINATION HAS BEEN OVERRULED OR MODIFIED IN WHOLE OR PART BY DET.NO. 04-0022E, 23 WTD 198 (2004) AND DET.NO. 04-0023E, 23 WTD 206 (2004).

WAIVER OF INTEREST -- CIRCUMSTANCES BEYOND TAXPAYER'S CONTROL -- SERIOUS ILLNESS OF OFFICERS OF TAXPAYER. The illness of corporate taxpayer's officer is not one of the two circumstances listed Rule 228 which will justify the waiver of interest. ACCORD: Det. 87-353, 4 WTD 317 (1987).

WAIVER OF PENALTIES -- CIRCUMSTANCES BEYOND TAXPAYER'S CONTROL -- MISTAKE OF BOOKKEEPER. A late payment of tax resulting from the error of an employee is not one of the seven circumstances listed in Rule 228 which will justify the waiver of penalties. ACCORD:Dets. 87-302, 4 WTD 107 (1987) and 87-343, 4 WTD 257 (1987).

PENALTIES -- LATE PAYMENT -- LACK OF KNOWLEDGE. The failure of a taxpayer to determine that he is taxable for business and occupation taxes is not a circumstance beyond his control. Accord: Det. No. 86-299, 2 WTD 035 (1986).

TAXES -- INTEREST AND PENALTIES -- WAIVER -- LACK OF KNOWLEDGE -- HARDSHIP -- BURDEN TO INFORM. Hardship or lack of knowledge of a tax obligationis not identified by statute or rule as grounds for waiver of taxes, interest or penalties. The burden is on the taxpayer to determine if it has an obligation to pay taxes.ACCORD:Det. No. 87-348, 4 WTD 281 (1987), Det. No. 86-226, 1 WTD 67 (1986), Det. No. 86-178, 1 WTD 287 (1986).

WAIVER OF INTEREST -- CIRCUMSTANCES BEYOND THE TAXPAYER'S CONTROL -- FAILURE TO PAY TAXES BY DUE DATE. Where the taxpayer fails to pay taxes by the due date and then files a petition in bankruptcy, the failure to have paid those taxes in a timely manner is not due to circumstances beyond the taxpayer's control, therefore, interest assessed after the discharge will not be waived on those taxes.

WAIVER OF INTEREST -- CIRCUMSTANCES BEYOND THE TAXPAYER'S CONTROL -- FAILURE TO PAY TAXES BY DUE DATE. However, where the taxpayer files a petition in bankruptcy prior to the due date for payment of excise taxes, and the trustee fails to make timely payment of them due to conditions beyond the taxpayer's control, interest after the discharge will be waived on those taxes.

INTEREST -- PENALTIES -- IGNORANCE OF TAX OBLIGATION. Ignorance of a tax obligation is not an excuse that will justify waiving penalties and interest. Taxpayers who are doing business in a state have an obligation to inform themselves of the tax consequences of their actions.

INTEREST -- WAIVER -- SETTLEMENT OFFER -- FAILURE TO RESPOND. Extension interest on an audit assessment was waived where the Department failed to respond to a written settlement offer within a reasonable time.

EVASION PENALTY -- MOTOR HOME -- OREGON LICENSE -- EFFECT OF. Washington residents who misrepresent the truth in applying for and obtaining Oregon license plates are liable for the evasion penalty.

INTEREST -- PAYMENT OF UNPROTESTED PORTION OF ASSESSMENT -- APPLICATION OF PAYMENT. Where a taxpayer has filed a timely appeal with the Interpretation and Appeals Division and has sent payment designated as payment of the unprotested tax portion of the assessment, that payment will be applied first against interest and penalties on the unprotested portion only and then to the unprotested tax.

EVASION PENALTY -- COLLECTED BUT UNREMITTED SALES TAX. A taxpayer is liable for the evasion penalty where the evidence shows that he collected retail sales tax, did not remit the sales tax to the Department for a period of four years, and used the collected sales tax for his own purposes while filing tax returns with the Department under the classification of wholesaling.

ELECTRONIC FUNDS TRANSFER -- EFT -- LATE PAYMENT PENALTY. There are no special provisions for penalties when payment is made by EFT. The general provisions for all taxpayers apply. Penalties may be waived only when the circumstances causing delinquency are beyond the control of the taxpayer.

UNREGISTERED TAXPAYER -- LIMITATIONS ON INTEREST AND PENALTIES -- WAIVER OF PENALTIES AND INTEREST. Former RPM 89-4 (now incorporated into Rule 230) provided that where the Department discovered an unregistered taxpayer doing business in Washington it would assess any taxes plus applicable interest and penalties for a period not to exceed seven years plus the current year. Penalties and interest may be waived only under specific situations described in Rule 228.

B&O TAX -- EXEMPTION -- MINIMUM TAXABLE AMOUNT -- "PERSON" DEFINED -- HUSBAND AND WIFE -- REGISTERED TAXPAYER -- UNREGISTERED TAXPAYER. Where one spouse has registered and reported its taxes, that spouse is entitled to have its business treated as a separate person provided the other spouse is not actively involved in the registered spouse's business. In that case, the Department will treat the unregistered spouse's activities as a separate business and will assess tax up to seven years prior to the assessment date plus the current year, and will impose penalties.

DEFERRAL CERTIFICATE -- PAYMENT PLAN -- ASSESSMENT -- PENALTY -- WAIVER:Deferral certificate holders who fail to pay a tax assessment by the due date in accordance with a schedule payment plan are subject to a 10% delinquency penalty and are not eligible for a one-time only waiver.

B&O TAX -- INTEREST-- PACCAR -- REFUND.Taxpayer who improperly requested and received a refund for which it was not eligible must pay interest on the subsequent assessment.

PENALTY FOR FAILURE TO FOLLOW SPECIFIC WRITTEN REPORTING INSTRUCTIONS -- INADVERTENCE. Inadvertence is not a basis for canceling the 10% penalty imposed for failing to follow specific written reporting instructions.

APPLICATION DUE DATE -- ESTOPPEL -- COMMUNICATION -- FACTORS.The Department was not estopped from enforcing the due date of a Distressed Area Tax Deferral application even though the taxpayer claimed that it was given incorrect, incomplete oral information by a Department employee and also claimed that it was misled by a Departmental Special Notice.

PENALTY -- WAIVER -- CIRCUMSTANCES BEYOND CONTROL -- INJURY --FINANCIAL HARDSHIP.A taxpayer's injury, which occurred two months prior to the due date of the return, is not a circumstance beyond the control of the taxpayer that is sufficiently proximate in time to the due date of the return to justify waiver of the penalty.Financial hardship is not grounds for waiver of a penalty.

EVASION PENALTY -- FAILURE TO FILE RETURNS -- ATTORNEY.An attorney who stopped filing state tax returns based on a casual conversation at a banking seminar is not liable for the penalty for tax evasion.

MOTION TO DISMISS; FAILURE TO PROMPTLY CONSIDER PETITION -- WAIVER OF INTEREST.RCW 82.32.100 does not address the period in which the Department must resolve a petition for correction of assessment.While RCW 82.32.160 does state that the Department should - promptly consider the petition and may grant or deny it, - it does not require that the assessment be waived simply because the Department delayed in addressing the taxpayer's petition.However, where the delay in issuing a decision was for the sole convenience of the Department, the Department will waive interest for the period commencin

EVASION PENALTY.The Department is authorized to impose an evasion penalty if - all or any part of the deficiency resulted from an intent to evade the tax. -The imposition of the evasion penalty requires a showing of a tax liability which the taxpayer knows is due; and an attempt by the taxpayer to escape detection through deceit, fraud or other intentional wrongdoing.Citing Det. No.

B&O TAX -- DELINQUENCY PENALTY -- WAIVER -- PRIOR AUDIT -- AFFILIATE.Failure by the Department to recognize and notify taxpayers of their obligations when auditing affiliates or related entities is not a basis for waiving penalties, even though the taxpayers records were available for review.

SALES TAX -- DELINQUENCY PENALTY -- WAIVER -- DESTRUCTION OF RECORDS.Destruction of records by the taxpayer's bookkeeper in an effort to destroy evidence of the bookkeeper's embezzlement of funds is not a - casualty - under Rule 228(6)(b)(v).

SALES TAX -- DELINQUENCY PENALTY -- WAIVER -- PRIOR DELINQUENCIES WITHIN TWENTY-FOUR MONTHS.An excise tax payment that was late due to circumstances beyond the taxpayer's control is not considered untimely for purposes of applying RCW 82.32.105's twenty-four month waiver provision to a subsequent delinquency.

INTEREST - WAIVER - LOSS OF CHECK IN MAIL - LATE PAYMENT OF ASSESSMENT. Because loss of mail is not one of the enumerated grounds for waiver of interest, the loss of a taxpayer's check in the mail is not sufficient grounds for waiver of interest.

INTEREST - WAIVER - INADVERTENCE - FINANCIAL HARDSHIP.Interest that accrued during the audit period and before the issuance of an assessment will not be waived due to financial hardship and lack of intent because lack of intent and financial hardship are not among the enumerated grounds for waiver of interest.

INTEREST - WAIVER - DEPARTMENT DELAY IN MAILING ASSESSMENT - DELAY FOR SOLE CONVENIENCE OF THE DEPARTMENT. Where the Department fails to timely respond to a taxpayer's request for a copy of its assessment, interest will be waived for the period between the time the taxpayer requested a copy of its completed assessment and the time the taxpayer actually received the assessment.

VALUE PROCEEDING OR ACCRUING --CASH RECEIPTS BASIS OF ACCOUNTING -- LATE PAYMENT PENALTY -- CANCELLATION. An out-of-state seller of tangible personal property who keeps her books on a cash receipts accounting basis is not subject to a 20% late-payment penalty if she pays her tax and files her excise tax return within twenty five days after the end of the month in which she receives payment.It is immaterial that the contract was performed, i.e. the goods were received by a customer in Washington, more than two months before payment was received.

PENALTIES -- CIRCUMSTANCES BEYOND THE CONTROL OF THE TAXPAYER -- ASSETS FROM MARITAL DISSOLUTION -- RESTRAINING ORDERS.It is not a circumstance beyond the control of a taxpayer, such as would require the waiver or cancellation of penalties, where the taxpayer failed to pay a tax assessment when it was due because the taxpayer had insufficient funds to pay the assessment, and the taxpayer's owner later arranged for payment of the assessment from personal assets under the jurisdiction of a superior court in the owner's marriage dissolution action.

EVASION PENALTY - EVASION VERSUS AVOIDANCE.Evasion occurs when a taxpayer knows of tax obligation and does something, which is fraudulent or false to avoid that obligation.However, an unsuccessful attempt at tax avoidance is not evasion.

EVASION PENALTY -- INTENT TO EVADE.The Department will not assess an evasion penalty unless there is clear, cogent, and convincing evidence that the taxpayer intended to evade the tax.

EVASION PENALTY.Evidence of drug addiction shows only the motivation for tax evasion, it is insufficient to overcome proof that taxpayer knew taxes were due, collected but did not remit retail sales tax trust funds, and under reported income.

SALES TAX -- EVASION -- MISREPRESENTATION TO DEPARTMENT.The Department found a taxpayer who collected , but did not remit retail sales tax, intended to evade payment of the tax, when the taxpayer denied billing or collecting the tax in response to the auditor's specific question.

PENALTY -- EVASION -- DECEIT.A corporate president who deceived an auditor on numerous occasions, intended to evade payment of tax and subjected the corporation to the evasion penalty.

LATE-PAYMENT PENALTIES --ONE-TIME - WAIVER - CIRCUMSTANCES BEYOND THE CONTROL OF THE TAXPAYER - EMPLOYEE ERROR.The Department will waive a late-payment penalty on a one-time basis if the taxpayer's employee neglects to enclose the check with the excise tax return, and the taxpayer promptly pays the full amount due within 30 days of the due date when the error is discovered.

CANCELLATION OR WAIVER OF LATE PAYMENT PENALTIES - COMPUTER FAILURE.Late payment penalties will not be cancelled or waived when the taxpayer's computer - crashed a month prior to its next due excise tax return and where back-up records were available.

PENALTIES -- LATE PAYMENT -- WAIVER -- UNAVOIDABLE ABSENCE -- WEATHER-RELATED.When the late payment of a tax assessment is caused by the only bookkeeper's inability to get to work due to unexpectedly severe weather, the Department may waive the late payment penalty under WAC 458-20-228(6)(b)(iv), which authorizes waiver for delinquency - caused by unavoidable absence of the taxpayer.

LATE PAYMENT PENALTY - WAIVER - SERIOUS ILLNESS - CAUSE OF DELINQUENCY.A serious illness that is chronic or long-term cannot indefinitely be considered the cause of late excise tax payments.After some reasonable period following onset, the illness ceases to be the primary causative factor, and is replaced by neglect or failure of the taxpayer to reasonably attend to business affairs.

LATE PAYMENT PENALTY - WAIVER - SERIOUS ILLNESS - PROXIMITY TO DUE DATE.Rule 228's provision for waiver of late-payment penalties when a delinquency is caused by serious illness applies only to delinquencies that occur within a reasonable period after onset of the illness.

PENALTY -- WAIVER OF -- 24 MONTH RULE -- ONE-TIME RULE.The one-time penalty waiver provision of Rule 228 and the 24-month waiver provision of RCW 82.32.105(2) may be applied coextensively.

LATE PAYMENT PENALTY - EMPLOYEE MISCONDUCT.Failure of a taxpayer to monitor mail from the Department of Revenue was not a circumstance beyond the taxpayer's control.

PENALTY WAIVER -- SERIOUS ILLNESS -- FAMILY.The late-payment penalty was waived when serious illness of the father (of taxpayer who kept the books) caused the delinquency.

INTEREST WAIVER -- SERIOUS ILLNESS.Interest will not be waived unless the Department caused the late payment.

EVASION PENALTY -- PROOF.In order to sustain an evasion penalty, the Department must prove intent to evade by clear, cogent, and convincing evidence.This entails proof that the intent to evade was "highly probable," or stated another way, that evidence was "positive and unequivocal."Intent to evade is highly probable when a taxpayer knows he has a use tax liability and engages in various acts of deceit and misrepresentation to avoid paying the tax.

INTEREST -- WAIVER -- WORKPAPERS.Preliminary Audit workpapers provided to the taxpayer without written payment instructions, and which do not address whether interest will be added to the assessment, are not a basis to waive interest included in the final assessment.

TAX -- CANCELLED CHECK.Taxpayers, who verify payment of tax to the Department with a cancelled check endorsed by the Department, will be given credit for payment.

PENALTIES - WAIVER - CIRCUMSTANCES BEYOND CONTROL - SLEEP DEPRIVATION.Sleep deprivation caused by the responsibilities of caring for young children is not a circumstance beyond the taxpayer's control sufficient to justify penalty waiver.Specifically, where the taxpayer was neither hospitalized nor under a doctor's care for the sleep deprivation, it does not rise to the level of a - serious illness.

PETITION FOR CORRECTION OF NOTICE OF BALANCE DUE - TIMELY.Petitions filed more than thirty days after the issuance of the balance due notices are not timely.The Department cannot consider the issues raised in untimely petitions, and the petitions must be denied.

PENALTIES - WAIVER - CIRCUMSTANCES BEYOND CONTROL - EMPLOYEE TURNOVER - FLOODING - FAILURE OF DEPARTMENT TO PROVIDE ASSISTANCE -- CAUSE OF LATE FILING.Where the taxpayer argued that its area had been flooded several times in recent years, but failed to show that the flooding caused it to file its return late, the late payment penalty can not be waived.Where the taxpayer argued that it did not receive requested help regarding filing its returns by EFT, but failed to prove that this failure caused it to file its return late, the late payment penalty can not be waived.Employee turnover is not

LATE-PAYMENT PENALTY - CIRCUMSTANCES BEYOND THE TAXPAYER'S CONTROL - SERIOUS ILLNESS -- CANCER. Colon cancer, requiring surgery, radiation and chemotherapy is a serious illness, and a circumstance beyond the taxpayer's control.Because a letter from the taxpayer's doctor verified the taxpayer was unable to work, it was found the illness caused the delinquency.

EVASION PENALTY - USE TAX - MVET. - Snowbirds - who are long-time residents of Washington, retain substantial ties to Washington, and have not established a residence elsewhere, evidence an intent to evade payment of Washington's use tax and motor vehicle excise tax when they license their vehicles in another state by misrepresenting their domicile and residence address.

EVASION PENALTY - USE TAX - MVET. - Snowbirds - who are long-time residents of Washington, retain substantial ties to Washington, and have not established a residence elsewhere, evidence an intent to evade payment of Washington's use tax and motor vehicle excise tax when they license their vehicles in another state by misrepresenting their domicile and residence address.

REFUND - APPLICATION OF AMOUNTS COLLECTED ON TAX WARRANT TO BALANCE OF OUTSTANDING ASSESSMENT.The Department may issue a warrant for amounts that are not paid within fifteen days of their due date.The Department may issue a refund when payment received under a warrant exceeds the taxpayer's outstanding tax liability.However, where the Department receives payment from the taxpayer's bank in excess of the amount due on a warrant, but the taxpayer also has an outstanding assessment, the Department may properly apply the excess amount to the assessment.

LATE PAYMENT PENALTIES - CIRCUMSTANCES BEYOND THE TAXPAYER'S CONTROL.Late payment penalty will be waived as a circumstance beyond the taxpayer's control where a taxpayer did not work during part of the year when a tax assessment arrived, the taxpayer did not know when the tax assessment would arrive, and upon the taxpayer's return, the taxpayer paid the tax assessment within 30 days of his return.

LATE PAYMENT PENALTIES WAIVER OR CANCELLATION OF PENALTIES.Late payment penalties will be waived or cancelled when the taxpayer's late filing and paying of monthly excise tax returns were due to the effects of a recent injury of his own and the recent death of his mother.Late returns due more remotely from these events will not have the late-payment penalties waived.

TAX PAYMENT - TAX RETURN - SENT BY MAIL - FILING DATE.A tax payment or tax return sent to the Department by mail is deemed filed the day of the postmark on the envelope.

LATE-PAYMENT PENALTY - TAX ASSESSMENT - WAIVER OF --ONE-TIME - PROVISION.The one-time penalty waiver provision of -- 6(b)(vii) of Rule 228 may be applied to tax returns but not to tax assessments.

LATE-PAYMENT PENALTY - TAX ASSESSMENT - WAIVER OF --24 MONTH - PROVISION.The - 24 month- penalty waiver provision of RCW 82.32.105(2) may be applied to tax returns but not to tax assessments.

DELINQUENCY PENALTY -- WAIVER -- 24-MONTH PROVISION.If no tax returns were due during the twenty-four months immediately preceding the period covered by the return for which waiver of a delinquency penalty is being requested, the Department has no authority under RCW 82.32.105(2) to waive or cancel the penalty.

EVASION PENALTY.Poor judgment brought on by illness and financial pressures is not a defense to the 50% evasion penalty, where the evasion was proven to be knowing and intentional.

EVASION PENALTY - USE TAX AND MVET ON MOTORHOME.Where the taxpayer improperly used his dealer plate and failed to properly title and register the motor home, but these actions were not undertaken in an intentional effort to deliberately avoid the payment of the tax due, the evasion penalty does not apply.The taxpayer explained that the sale of the motor home was complicated by his health difficulties, which impacted his ability to run his business, in conjunction with a lack of familiarity with the requirements of acting as a wholesale dealer and the extremely limited market demand for the

EFT PAYMENT - LATE PAYMENT PENALTY. For taxpayers required to pay their taxes by EFT, a timely filed return and timely payment by EFT are required in order to avoid late payment penalties.An EFT is timely when the state receives collectible funds on or before 3:00 p.m. of the EFT payment due date.Where a taxpayer calls in its EFT payment seven minutes late, the payment is not timely.As an administrative agency, the Department is given no discretionary authority to waive or cancel penalties.

PENALTIES - INTEREST - WAIVER - GOOD FAITH.Neither the statute nor the rule permits good faith to be the basis for waiving late payment penalties or interest.

USE TAX -COLLECTION OF TAX - COMMUNITY PROPERTY - SURVIVING SPOUSE -- ESTATE NONCLAIM.The Department has a use tax claim against the surviving spouse where that spouse used the vehicle in Washington.The nonclaim statute does not bar the Department's collection of the use tax.

CANCELLATION OF LATE PAYMENT PENALTY - DELINQUENT TAX RETURNS - CIRCUMSTANCES BEYOND TAXPAYER'S CONTROL - PRECEDING 24 MONTHS.Circumstances were not beyond a taxpayer's control in causing the filing of two delinquent annual excise tax returns when a personal injury to the taxpayer occurred 26 months and 38 months, respectively, before the due dates of the returns.The taxpayer had reasonable time and opportunity to timely file the returns and pay the tax by the due dates.However, the taxpayer is entitled to cancellation of the first late payment penalty because she had no tax liability when

LATE PAYMENT PENALTY - WAIVER - LATE PAYMENT OF ASSESSMENT.The WAC 458-20-228(6)(b)(vii) one-time-only penalty waiver, by its very terms, applies only to penalties imposed by RCW 82.32.090(1) on the late filing and payment of regular tax returns, and not to the RCW 82.32.090(2) penalties imposed for the late payment of tax assessments.Accord: Det. No. 86-235, 1 WTD 107 (1986).

LATE PAYMENT PENALTY - WAIVER - 24-MONTH RULE - LATE PAYMENT OF ASSESSMENTS.RCW 82.32.105(2), which grants a waiver to taxpayers having filed no late returns for the previous 24 months is limited only to RCW 82.32.090(1) penalties imposed for the late payment of tax returns and not for the late payment of assessments.

PENALTY -- NONREGISTERED TAXPAYER -- WAIVER. If a taxpayer fails to pay taxes as required, the Department shall assess the tax and shall add interest and penalties due. RCW 82.32.050; RCW 82.32.090; RCW 82.32.100. Lack of knowledge of a tax obligation or voluntary compliance once an obligation is known are not identified by statute or rule as a basis for abating interest or penalties.

PENALTIES -- UNREGISTERED TAXPAYER. RCW 82.32.100 provides that the Department shall add late payment penalties if a person fails to make any return required by the Revenue Act.

PENALTIES OR INTEREST -- WAIVER -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER -- WHAT CONSTITUTES. Lack of knowledge of a tax obligation does not render failure to pay taxes "beyond the control" of the taxpayer within the meaning of RCW 82.32.105WAC 458-20-228 which allow the Department of Revenue to waive or cancel interest and penalties under limited situations.

UNREGISTERED TAXPAYER -- PENALTIES OR INTEREST -- WAIVER -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER. The Revenue Act requires the Department to add interest and late payment penalties where a taxpayer fails to register and pay taxes as required. Lack of knowledge of a tax obligation or hardship do not render failure to pay taxes "beyond the control" of the taxpayer.

PENALTIES -- LATE PAYMENT -- CANCELLATION -- TIMELY REQUEST FOR FORMS. Late payment penalties will be cancelled where taxpayer made a timely request for forms but didreceive them until after the delinquency date.

PENALTIES -- LATE PAYMENT -- WAIVER -- DEATH OR SERIOUS ILLNESS -- BOOKKEEPER.Serious illness followed by death of bookkeeper's spouse, and resulting emotional distress, satisfactorily explains late filing of one return and failure to file two others such that penalties will be waived, even though minor and infrequent delinquencies occurred in the past.

PENALTIES -- LATE PAYMENT --WAIVER -- DEATH OR SERIOUS ILLNESS -- BOOKKEEPER RELIANCE. Penalties will be waived or cancelled where taxpayer relied on repeated assurances by bookkeeper, distraught over spouse's death, that the bookkeeper was managing the taxpayer's affairs in a competent manner and where taxpayer filed returns promptly upon learning of the bookkeeper's failure to do so.

DELINQUENCY PENALTY -- WARRANT PENALTY -- LATE PAYMENT OF ASSESSMENT -- NONRECEIPT OF MAILED TAX ASSESSMENT -- MAIL ROOM PROBLEM -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER. To waive or cancel delinquent or warrant penalties arising from late payment or nonpayment of tax assessments, there must be a finding that the delinquency was caused by circumstances beyond the control of the taxpayer. Mail disappearing or not reaching the proper party in the taxpayer's organization are not circumstances beyond the control of the taxpayer.

UNREGISTERED TAXPAYER -- PENALTIES OR INTEREST -- WAIVER -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER. The Revenue Act requires the Department to add interest and late payment penalties where a taxpayer fails to register and pay taxes as required. Lack of knowledge of a tax obligation or hardship do not render failure to pay taxes "beyond the control" of the taxpayer within the meaning of RCW 82.32.015 and WAC 458-20-228, which allow the Department of Revenue to waive or cancel interest and penalties under limited situations.

SALES/USE TAX -- PENALTIES AND INTEREST. The Department may proceed against either the seller or buyer to collect unpaid retail sales/use tax. It may not, however, collect twice the tax, interest, or penalties owed.

PENALTIES -- WAIVER -- UNREGISTERED TAXPAYER. Late payment penalties will be waived only for those circumstances beyond the taxpayer's control as are denominated in Rule 228. Taxpayer's voluntary disclosure of its innocent failure to register is not sufficient grounds for abatement of penalties.

EXCISE TAX -- INTEREST -- PENALTIES -- STATUTE OF LIMITATIONS -- UNREGISTERED TAXPAYER.The four-year statute of limitations for the assessment of excise tax does not apply in favor of a previously unregistered taxpayer.Registration just prior to tax assessment does not reactivate the statute of limitations.

EXCISE TAX -- INTEREST -- PENALTIES -- STATUTE OF LIMITATIONS -- UNREGISTERED TAXPAYER -- REGISTRATION WITH OTHER AGENCIES -- ESTOPPEL.The four-year statute of limitations for the assessment of excise tax does not apply in favor of a previously unregistered taxpayer.The Department of Revenue is not estopped from assessing tax outside the statute of limitations by virtue of the taxpayer's registration with other state agencies or offices.

PENALTIES -- INTEREST -- UNREGISTERED TAXPAYER -- WAIVER -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER -- WHAT CONSTITUTES. RCW 82.32.100 provides that the Department shall add late payment penalties if a person fails to make any return required by the Revenue Act. Lack of knowledge of a tax obligation does not render failure to pay taxes "beyond the control" of the taxpayer within the meaning of RCW 82.32.105 and WAC 458-20-228 which allow the Department of Revenue to waive or cancel interest and penalties under limited situations.

PENALTIES -- LATE PAYMENT -- WAIVER CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER -- WHAT CONSTITUTES.Lack of knowledge of a tax obligation does not render failure to pay taxes when due "beyond the control" of the taxpayer within the meaning of RCW 82.32.105 and WAC 458-20-228 which allow the Department of Revenue to waive or cancel interest and penalties under limited situations.

PENALTY -- EMPLOYEE'S ILLNESS -- INTEREST. The absence of a taxpayer's office manager because of illness does not justify waiver of a penalty for late payment of an assessment. Interest may be waived if the delay in issuance of a determination is solely for the convenience of the Department of Revenue.

PENALTIES OR INTEREST -- WAIVER -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER -- WHAT CONSTITUTES. Lack of knowledge of a tax obligation does not render failure to pay taxes "beyond the control" of the taxpayer within the meaning of RCW 82.32.105 and WAC 458-20-228 which allow the Department of Revenue to waive or cancel interest and penalties under limited situations.

LATE PAYMENT PENALTIES -WAIVER - EMBEZZLEMENT - SAFEGUARDS/INTERNAL CONTROLS.Even though it took a considerable time to discover the fraud leading to Taxpayer's late payments, Taxpayer's safeguards and internal controls were considered to be reasonable when inexperienced family members had been forced to assume control of the family business when its managing shareholder unexpectedly became ill and unable to work, and the bookkeeper hired to help in the business embezzled its funds.

EVASION PENALTY -- PARTNERSHIP -- REGISTRATION IN NAME OF -- NONEXISTENT.An evasion penalty was sustained where longtime Washington residents registered their newly-acquired motor home in the name of a Montana partnership which objective facts indicated did not exist.

ELECTRONIC FUNDS TRANSFER (EFT) - LATE PAYMENT PENALTY.There are no special provisions for penalties when payment is made by EFT.The general provisions for all taxpayers apply.Penalties may be waived only when the circumstances causing delinquency are beyond the control of the taxpayer.

WAIVER OF PENALTIES -- CIRCUMSTANCES BEYOND THE CONTROL OF THE TAXPAYER.The taxpayer whose circumstances must be scrutinized to be entitled to waiver is the taxpayer against whom the penalties were assessed, not the surviving corporation who must ultimately pay them.

PENALTY WAIVER -- CIRCUMSTANCES BEYOND TAXPAYER'S CONTROL.Rule 228 provides that an excise return will be considered timely if any late payment penalties on it were waived due to circumstances beyond the control of the taxpayer.The late payment penalty for Q4/98 was waived due to circumstances beyond the taxpayer's control and, therefore, was timely.Although taxpayer had been in business less than twenty-four months, a late payment penalty for Q1/99 was waived because taxpayer timely registered with the Department and had no delinquent tax returns for periods prior to Q1/99.

ACTIVE NON-REPORTING -LATE-PAYMENT PENALTIES - QUALIFICATIONS.When a taxpayer is either erroneously placed on active nonreporting status because of the taxpayer's errors in reporting or no longer qualifies for the status, late-payment penalties can be assessed for the periods of nonreporting.

LATE PAYMENT PENALTIES - WAIVER - CIRCUMSTANCES BEYOND TAXPAYER'S CONTROL -- EMBEZZLEMENT - FAILURE TO ADOPT REASONABLE SAFEGUARDS OR INTERNAL CONTROLS.The Department cannot waive late payment penalties due to embezzlement by the taxpayer's bookkeeper when the taxpayer failed to put in place reasonable safeguards or internal controls to detect embezzlement.

LATE-PAYMENT PENALTY - EFT - DUE DATE -- CHECK. The Department must collect funds from the bank of a taxpayer required to pay by EFT by the EFT due date when the taxpayer delivers a check to the Department, rather than paying its taxes by electronic funds transfer.

PENALTY-- WAIVER - EFT - BANK. A taxpayer's lack of knowledge of its bank's EFT program is not a circumstance beyond the taxpayer's control under which penalties may be waived.

LATE PAYMENT PENALTY -- USE TAX - YACHT - UNREGISTERED TAXPAYER.A foreign corporation, which owned a yacht that was in Washington waters for more than 60 days in a twelve month period, incurred a use tax assessment on the value of the yacht and a 20% late payment penalty for failure to pay the use tax before the first day after the last day of the second month following the due date.Because the taxpayer was not registered with the Department of Revenue at the time it incurred its use tax liability and had not engaged in business activities in this state up to that time the taxpayer was not

RCW 82.32.090, RCW 82.32.105:PENALTIES - WAIVER - CIRCUMSTANCES BEYOND A TAXPAYER'S CONTROL - LACK OF KNOWLEDGE OF TAX LIABILITY - 24 MONTH PROVISION.Lack of knowledge is specifically listed as an example of a circumstance not considered beyond the control of the taxpayer.RCW 82.32.105(2) requires waiver of a late payment penalty if the taxpayer has timely filed and paid its excise tax returns for the 24 month period preceding the period covered by the return for which the waiver is being requested.Where the taxpayer filed no tax returns before filing its late return, there is no record of

1] RCW 82.32.090, RCW 82.32.045, RCW 82.32.050:INTEREST - PENALTIES - ACTIVE NONREPORTING STATUS - WHEN RETURNS ARE DUE.The taxpayer was not eligible for the active nonreporting status for any of the years included in the assessment because his gross proceeds of sales exceeded $24,000 per year throughout the audit period.He did not file returns and did not pay taxes during the audit period.Thus, the taxpayer failed to pay his taxes on or before due date.As such, the taxpayer filed his returns late and because he did not qualify for penalty or interest waiver, was liable for penalties and in

LATE-PAYMENT PENALTIES - INTEREST - WAIVER OF - EFT FILER - PAYMENT BY MAIL - TIMELINESS OF.Where a taxpayer is required to file its tax returns by electronic funds transfer (EFT), its payment must be credited to the Department's bank account on the next banking day following the due date of the return.Where such a filer mails its payment instead of paying by EFT, the fact that the envelope bears a postmark date on or before the due date does not make the payment timely.

RCW 82.32.105: LATE PAYMENT OF RETURN PENALTY - CIRCUMSTANCES BEYOND THE CONTROL OF THE TAXPAYER - LACK OF KNOWLEDGE OF TAX LIABILITY - RELIANCE UPON ADVICE OF THIRD PARTIES.Lack of knowledge of a tax liability generally is not considered a circumstance beyond the control of the taxpayer.The word - generally - does not create an exception for a taxpayer who remained unaware of a liability despite inquiring of persons and entities, other than the Department, that it expected to be knowledgeable about such matters.

RCW 82.32.105: LATE PAYMENT OF RETURN PENALTY - CANCELLATION - FAILURE TO PROMPTLY DETECT TAXPAYER'S FAILURE TO PAY TAX.That the penalty would have been less if the Department had earlier detected the taxpayer's failure to file a use tax return and pay taxes is not a basis for canceling or reducing a late payment of return penalty.

RCW 82.32.105: LATE PAYMENT OF RETURN PENALTY - CANCELLATION - APPLICATION OF WAIVER PROVISIONS TO NONRESIDENTS.Nonresidents and foreigners are held to the same standard as Washington residents in the application of late payment of return penalty waiver provisions.

PENALTIES - INTEREST - LATE PAYMENT - INTENT OF LEGISLATURE.Washington's excise taxes are of a self-assessing nature, and the legislature intended to encourage voluntary compliance with the Revenue Act by imposing - late payment - penalties and interest on those who do not pay their tax liabilities timely, even though there might not be willful fraud in failing to do so.

PENALTIES - INTEREST - LATE PAYMENT - WAIVER -- LACK OF KNOWLEDGE.Neither the Revenue Act nor Rule 228 provides for the waiver of penalties or interest when an unregistered taxpayer does not timely pay a use tax obligation because of a good-faith lack of knowledge.

PENALTIES - INTEREST - LATE PAYMENT - WAIVER - USE TAX - IMPORTS - DELAY IN U.S. CUSTOMS NOTIFICATION.Even though delays in the U.S. Customs import reporting system might in turn delay the Department's use tax assessments on imported goods, such delays do not alter a taxpayer's obligation to pay the use tax timely or provide a basis for the waiver of penalties or interest.

EVASION PENALTY -- INTENT.Corporation writing "NO SALES" on tax returns, which resulted in the corporation being placed on active non-reporter status, intentionally misrepresented that the corporation did not charge and collect sales tax.

CUMULATIVE PENALTIES -- EVASION -- EXCESSIVE. The 50% evasion penalty plus the 20% late-payment penalty are not excessive under RCW 82.32.090(6).

PENALTY - WAIVER - ACTIVE NONREPORTER - TWENTY-FOUR MONTH PROVISION.Where a taxpayer ceases to qualify for the active non-reporting status but fails to file and pay tax, it qualifies for waiver under the twenty-four month provision for the first period in which it ceases to qualify for active nonreporting status, provided it had no late returns in the preceding twenty-four months.

RCW 82.32.105: LATE PAYMENT OF RETURN PENALTY - CIRCUMSTANCES BEYOND THE CONTROL OF THE TAXPAYER - LACK OF KNOWLEDGE OF TAX LIABILITY.Lack of knowledge of a tax liability generally is not considered a circumstance beyond the control of the taxpayer.This general rule applies even when the taxpayer made inquiries of private parties it expected to be familiar with the tax ramifications of such a transaction, and those parties failed to alert the taxpayer.

RCW 82.32.105: LATE PAYMENT OF RETURN PENALTY - CANCELLATION - FINANCIAL HARDSHIP.That paying a penalty would create a financial hardship, or receiving a refund of a penalty would relieve a financial hardship, is not a basis for waiving, canceling, or refunding penalties.

TAX -- PENALTIES - INTEREST - WARRANT - BIFURCATION OF.Where a warrant includes an amount previously assessed against a taxpayer and an amount not previously assessed, and the taxpayer appeals the warrant, only the propriety of the warrant will be [reviewed] as to the first amount, whereas the merits of the assessment will be [reviewed] vis-a-vis the second amount.

BILLING PENALTY -- ASSESSMENT -- EFFECTIVE DATE.The 5% assessment billing penalty that went into effect on July 1, 2003 applies to all assessments originally issued after June 30, 2003, and not just audit periods occurring after that date.

PENALTY - RETURN -DUE DATE - ENVELOPE - POSTMARK.A return is deemed received on the date shown by the post office cancellation mark stamped on the envelope containing it, and not deemed received on the date of a postage meter mark.

RETURN DUE DATE - LATE PAYMENT PENALTY.Effective August 1, 2003, payments of monthly business and occupation taxes, sales taxes, and various other excise taxes are due monthly within twenty days after the end of the month.If payment of any tax due on a return to be filed by a taxpayer is not received by the Department by the due date, the Department must assess a penalty of five percent of the amount of the tax.

EVASION PENALTY.A taxpayer's ignorance or mistake about the amount of penalty the taxpayer incurs by not timely filing tax returns and remitting collected retail sales tax is not the sort of ignorance or mistake that overcomes a finding of intent to evade.

PENALTY - WAIVER - TAXPAYER RESPONSIBILITIES - ALLEGED DEPARTMENT FAILURE TO PROMPTLY CONTACT TAXPAYER WHO DID NOT FILE.Taxpayers are responsible for knowing their tax reporting obligations and for paying taxes in a timely manner.That a registered taxpayer might not have continued failing to file returns or failed to remit collected retail sales tax had the Department contacted the taxpayer when he first missed a filing deadline, and advised the taxpayer of the consequences of such failure, is not a basis for reducing the penalties incurred by the taxpayer's failures.

PENALTY - WAIVER - FINANCIAL HARDSHIP.The fact that paying a penalty would create a financial hardship, or receiving a refund of a penalty would relieve a financial hardship, is not a basis for waiving, canceling, or reducing penalties.

EVASION PENALTY.Evidence that the taxpayer knew he had a tax liability and knew he was required to report and pay, but deliberately did not file tax returns because he intended to defer payment of the taxes until his financial situation improved, establishes intent to evade.

EVASION PENALTY.Even if a taxpayer intends to evade payment of taxes only on a temporary basis, the taxpayer is subject to the evasion penalty.

PENALTY AND INTEREST -- USE TAX -- ASSESSMENT AFTER TAX IS DUE.The Department's issuance of a use tax assessment after payment is due is not a basis for waiver of a taxpayer's late payment penalties or interest.

LATE PAYMENT PENALTY AND INTEREST -- WAIVER -- LACK OF KNOWLEDGE.Lack of knowledge of a tax obligation is not grounds for the waiver of penalties or interest.

LATE PAYMENT PENALTY AND INTEREST-- USE TAX ON IMPORTS -- FAILURE OF DEPARTMENT TO TIMELY ADVISE.The Department is not required to issue written instructions to individual taxpayers to pay a use tax prior to its being due, and the issuance of an assessment when a use tax deficiency is discovered is not an "extension of the due date" under RCW 82.32.105(3).

RETAIL SALES TAX -- RESALE CERTIFICATE -- PENALTY FOR MISUSE OF A RESALE CERTIFICATE.The penalty for misuse of a resale certificate was upheld where the taxpayer used a resale certificate to purchase housing under the farm worker housing exemption, and the housing did not qualify for the claimed exemption.

PENALTY - WAIVER -- NOTIFICATION OF ADMINISTRATIVE CLOSING OF ACCOUNT IS NOT INSTRUCTION; TAXPAYER OBLIGATION TO REQUEST THAT ACCOUNT REMAIN OPEN.The Department's notification that it has administratively closed a tax account is not an instruction that the taxpayer does not owe taxes.The taxpayer is responsible for knowing whether it still has a tax reporting obligation and, if the account should remain active, must request that it remain open.

PENALTY - WAIVER - REGISTERING OR BEING REGISTERED IS NOT A REQUEST FOR FORMS.A taxpayer has the right to receive, upon request, current tax forms.The Department will consider a waiver of penalties when a taxpayer has made a timely application in writing for the proper tax forms and the Department has not furnished them in sufficient time for the taxpayer to timely file.Registering or being registered is not a request for tax forms, and the Department is not obligated to send a registered taxpayer tax forms unless the taxpayer specifically requests the forms.

PENALTY WAIVER - CIRCUMSTANCES BEYOND THE CONTROL OF THE TAXPAYER. - Reliance by the taxpayer on incorrect advice received from the taxpayer's legal or accounting representative - is a circumstance specifically delineated as not being beyond the control of the taxpayer and is, therefore, not a basis for the cancellation or waiver of a penalty.

2003 LEGISLATIVE CHANGES TO PENALTY STRUCTURE -- WHEN EFFECTIVE.The Washington Legislature amended RCW 82.32.090 in 2003.Prior to the amendment, delinquent excise tax returns were subject to a three-tier penalty.The 2003 legislation increased the latter two penalty rates by 5%.The legislation also added a 5% assessment penalty to be imposed in addition to the delinquency penalties.All changes to the penalty rates were effective on July 1, 2003, and attached to penalties applied on and after that date, including penalties applied to taxes due on activities that occurred prior to that date.Th

APPLICABLE INTEREST RATE -- 2003 LEGISLATIVE CHANGES - RATE APPLICABLE TO UNDERPAYMENTS.Because RCW 82.32.050(1) directs that - [t]he rate so computed shall be adjusted on the first day of January of each year for use in computing interest for that calendar year, - a different interest rate is applied to each respective year.The Washington Legislature amended the excise tax interest rate provisions in 2003.In respect to underpayments (i.e., assessments), DOR bases the interest rate on the federal short-term rate as published by the U.S.

PENALTIES - WAIVER - LACK OF KNOWLEDGE OR NOTIFICATION - 24 MONTH WAIVER.Lack of knowledge or notification of the use tax is not grounds for penalty waiver.Taxpayer does not qualify for the 24-month waiver where taxpayer was not registered and had not engaged in business activities in the state up to the time of the taxable use.

RCW 82.24.120, RCW 82.32.090: CIGARETTE TAX - USE TAX --PENALTIES - WAIVER - LACK OF KNOWLEDGE - PAYMENT OF TAX AND INTEREST. As an administrative agency, the Department may waive or cancel taxes, penalties and interest, but only under specific circumstances prescribed by law.Lack of knowledge of a tax liability is not grounds for waiver of that liability.The Department can waive the cigarette tax penalty for good cause, but the taxpayer must pay all taxes due and interest thereon.Where the taxpayer has not paid the taxes and interest, the Department cannot waive the penalty.

ETA 419.32.99:ORAL INSTRUCTIONS - RELIANCE.In the exercise of its statutory authority, the Department has determined that it cannot authorize, nor does the law permit, the abatement of a tax or the cancellation of interest on the basis of a taxpayer's recollection of oral instructions by an agent of the Department.

RULE 228; RCW 82.32.090; ETA 419:PENALTIES - IMPOSITION - MANDATORY - ORAL ADVICE - APPLICATION OF PAYMENTS.The legislature, through its use of the word - shall - in RCW 82.32.090 has made the assessment of penalties mandatory.Where a taxpayer argues it incurred penalties due to false information it received from the Department, the taxpayer must provide something in writing from the Department to substantiate that the Department provided misleading information.

RULE 228; RCW 82.32.105:PENALTIES - WAIVER - CIRCUMSTANCES BEYOND THE CONTROL OF THE TAXPAYER - FIRE -- REASONABLE TIME.While the consequences of a casualty or other circumstance beyond the taxpayer's control may continue for a period beyond the casualty itself, penalty waiver is available only for the period in which the taxpayer does not have a reasonable time or opportunity to obtain an extension or to timely file and pay.

RCW 82.32.090:PENALTIES - NEGLIGENT PENALTY - IMPOSITION - SPECIFIC WRITTEN INSTRUCTIONS.The negligent penalty, RCW 82.32.090(5), was not properly assessed where a prior assessment clearly set forth, in writing, the nexus and receipt requirements for Washington taxable sales but did not explain that these instructions were - specific written instructions - and that failure to follow the instructions may subject the taxpayer to penalties.

MISCELLANEOUS -- INCONSISTENT COMPLIANCE.The fact that other taxpayers in similar businesses may be reporting their taxes inconsistently with the ruling Taxpayer received does not provide a basis for changing the taxpayer's tax reporting instructions.

CIRCUMSTANCES BEYOND THE CONTROL OF THE TAXPAYER - ACT OF FRAUD, EMBEZZLEMENT, OR THEFT - PROOF REQUIRED.To qualify for a waiver of penalty based on allegations of fraud, embezzlement, or theft, a taxpayer must prove by a preponderance of the evidence that (1) the criminal act actually occurred, (2) that it directly caused the late payment of tax, (3) that the criminal act was of a nature that could not be immediately detected or prevented, and (4) that reasonable safeguards or internal controls were in place to detect or prevent the fraud, embezzlement or theft.Financial hardship caused by

RCW 82.08.890: RETAIL SALES TAX - EXEMPTIONS - DAIRY NUTRIENT MANAGEMENT EQUIPMENT.The taxpayer is ineligible for the exemption for the purchase of dairy nutrient management equipment in RCW 82.08.890 because it purchased the equipment in question prior to certification of its dairy nutrient management plan under chapter 90.64 RCW.

RCW 82.32.291: - RESALE CERTIFICATE - DUAL PURPOSES - 50% PENALTY FOR IMPROPER USE.The 50% penalty for improper use of a resale certificate was properly imposed when the buyer was not entitled to use a resale certificate for dual purposes because it did not resell, without intervening use, more than 50% of the equipment it purchased.Even if it had been entitled to use a resale certificate, the buyer did not discover and remit, as required, a minimum of 80% of its deferred sales/use tax liability within 120 days of the property's first use or demonstrate by other facts and circumstances that

RCW 82.32.291:RESALE CERTIFICATE - DUAL PURPOSES - 50% PENALTY FOR IMPROPER USE - PENALTY WAIVER.The penalty for improper use of a resale certificate may be waived when the use was due to circumstances beyond the control of the buyer.One situation in which waiver is appropriate is when a buyer makes a good faith effort to discover all of its deferred sales tax liability within 120 days of purchase and remits the discovered tax liability upon the next excise tax return.

Rule 228; RCW 82.32.090: EVASION PENALTY – INTENT TO EVADE. An owner and operator of two prior businesses that collected and remitted retail sales tax had the requisite knowledge of taxpayer’s tax reporting requirements to impose the 50% evasion penalty.

Rule 228; RCW 82.32.090: EVASION PENALTY – INTENT TO EVADE. A medical condition that the owner claims compounded his lack of knowledge is not a defense to the 50% penalty when he continued to earn income from business operations, collect retail sales tax from customers, and use the funds to pay other bills.

PENALTY -- LATE PAYMENT OF TAX DUE -- UNREGISTERED TAXPAYER -- RULE 228'S SITUATION NUMBER 2. Where unregistered taxpayer has not filed tax returns and after five years of business activity voluntarily registers and pays past due taxes, penalties on late payment of taxes cannot be waived.

PENALTIES.A twenty percent penalty for a tax payment made more than 30 days after the due date may not be waived under situation number 7 of Rule 228.

PENALTY.Lack of knowledge of a tax obligation resulting in failure to file returns and pay taxes is not a circumstance beyond the control of a taxpayer.

PENALTY -- TIMELINESS OF REQUEST FOR RETURNS. An application for Certificate of Registration received by the Department on January 24 does not constitute a "timely" request for a return which is due on January 31.

FAILURE TO FILE RETURNS -- PENALTIES -- UNREGISTERED TAXPAYER -- DEPARTMENT POLICY. RCW. 82.32.100 provides no statute of limitations for the assessment of taxes against a taxpayer who has not registered as required by the Revenue Act.The Department policy, however, is to limit assessments against unregistered taxpayers to seven years.

UNREGISTERED TAXPAYER -- PENALTIES AND INTEREST -- WAIVER. The Revenue Act requires the Department to add interest and late payment penalties where a taxpayer fails to register and pay taxes as required and none of the situations described in Rule 228 apply.

PENALTIES -- LATE PAYMENT -- WAIVER OR CANCELLATION -- RETURN. Where examination of delinquent return discloses underpayment of taxes, penalties will be asserted on difference between tax remitted and tax due.

RETURN -- LATE PAYMENT -- PENALTY -- POSTMARK -- POSTAL DELAY. Where envelope containing return is postmarked by due date but delivered after the due date as a result of postal delay, filing is timely and no penalty is due. If envelope is deposited in the mail by the due date but postmarked after the due date as a result of postal delay, then the return is delinquent and penalties are due, unless the requirements of circumstance #7 of Rule 228 are otherwise met.

INTEREST -- WAIVER -- DUE DATE OF ASSESSMENT EXTENDED -- SOLE CONVENIENCE OF DEPARTMENT. Where the issuance of a tax assessment is extended or delayed for the sole convenience of the Department, interest will be waived for the period of delay.Where substantial agreement had been reached between the taxpayer and the Department but differences remained to be resolved as well as administrative procedural tasks (supervisory review, math and theory review), interest continues to run until the issuance of the tax assessment.

PENALTY -- LATE PAYMENT -- ABSENCE OF POSTMARKED ENVELOPE. A return is considered timely where there is evidence that the return was mailed by the due date, and where the Department has discarded the postmarked envelope.

PENALTY.Under situation #7 of Rule 228, the Department may not waive a late payment penalty, when the taxpayer has had prior unexcused delinquencies.

PENALTY.Under situation #7 of Rule 228, the Department may not waive a late payment penalty, when the taxpayer has had prior unexcused delinquencies.

PENALTY -- CIRCUMSTANCE BEYOND TAXPAYER'S CONTROL.Even though a state agency fails to make its contract payments in a timely manner to a taxpayer for services rendered, the failure of the taxpayer to pay excise taxes will result in a penalty assessment.

PENALTY -- LATE PAYMENT OF TAX DUE -- NSF DISHONORED CHECK -- RULE 228'S SITUATION NUMBER SEVEN. Where taxpayer's check payment was not honored by bank because of insufficient funds (NSF check), penalty for late payment applied because it was a circumstance not beyond the control of the taxpayer. Taxpayer was ineligible for relief under Rule 228's situation number seven because of past delinquencies in filing tax returns which incurred unexcused penalties.

INTEREST -- PRIOR AUDITS -- RELIANCE ON. Interest waived where taxpayer reasonably relied on previous audits in which tax was not assessed on similar transactions.

PENALTY. Lack of knowledge of a tax obligation resulting in failure to file returns and pay taxes is not a circumstance beyond the control of a taxpayer. All sub-parts of situation 7 in Rule 228 must be met, in order for a penalty to be waived.

DELINQUENT PENALTY -- WARRANT PENALTY -- WAIVER -- ERRONEOUS WRITTEN ADVICE BY DEPARTMENT. When tax was not paid nor an appeal submitted under Rule 100, despite continuing correct written and oral advice from Department personnel, the twenty percent delinquent penalty and the five percent warrant penalty were properly added to the tax due.

WARRANT INTEREST -- CANCELLATION -- EXTENSION OF DUE DATE FOR SOLE CONVENIENCE OF THE DEPARTMENT. When the publication of a determination has been delayed, for the sole convenience of the department, for more than a reasonable period of time after a taxpayer has submitted an appeal, relief from interest which has accrued after a reasonable time may be granted.

PENALTIES -- LATE PAYMENT -- WAIVER OF. Failure of attorneys and accountants to advise taxpayer of Washington tax liability is not a circumstance beyond the taxpayer's control so as to justify waiver of late payment penalties.

INTEREST -- WAIVER -- CONVENIENCE OF DEPARTMENT. Extension interest upon all tax assessment which were reissued under remedial guidelines of Rule 114 was waived because the delay was caused for the sole convenience of the Department.No such waiver applies, nor was it within the Department's discretion, for any periods after the reissuance of such assessments.

PENALTIES. Lack of knowledge of a tax obligation resulting in failure to file returns and pay taxes is not a circumstance beyond the control of a taxpayer.All sub-parts of situation#7 in Rule 228 must be met, in order for a late payment penalty to be waived.

PENALTIES -- LATE PAYMENT -- WAIVER OR CANCELLATION -- REPORTING FREQUENCY. Late payment penalty waived under Situation 6 where: (1) Taxpayer filed a new Application for Certificate of Registration upon incorporating its existing business, (2) the Department, without prior notice, changed the taxpayer's reporting frequency from quarterly to monthly; and (3) the first monthly return was received by the taxpayer only 5days prior to its due date.

PENALTIES -- LATE PAYMENT -- WAIVER OR CANCELLATION -- REPORTING FREQUENCY -- SITUATION 7. Late payment penalty waived under Situation 7 where: (1) Return was received within 30 days of due date, (2) taxpayer's only prior delinquency was waived under Situation 6, and (3) delinquency resulted from taxpayer's failure to realize that the Department, without prior notice, and changed the taxpayer's frequency from quarterly to monthly.

PENALTY -- LATE PAYMENT OF TAX DUE -- UNREGISTERED TAXPAYER -- LACK OF KNOWLEDGE TO REGISTER -- INTEREST AS A PENALTY. Where a taxpayer failed to register because of a lack knowledge of requirement to do so, it is not a circumstance beyond the control of the taxpayer to allow waiver of the penalty. Interest added to a tax assessment is mandated by a separate statute from the statute assessing penalties and does not excuse the assessment of a penalty.

PENALTIES. A 20 percent penalty for a tax payment made more than 30 days after the due date may not be waived under situation 7 of Rule 228.

PENALTIES. All subparts of situation 7 in Rule 228 must be met, in order for a late payment penalty to be waived. The penalty may not be waived when the taxpayer has had prior unexcused delinquencies.

INTEREST -- WAIVER -- CONVENIENCE OF DEPARTMENT. Interest which accrues against tax deficiency assessments solely for reasons of convenience to the Department may be waived; interest accruals for reasons of administrative appeal or other taxpayer elections is not waived.

INTEREST -- ORAL REPRESENTATION. A taxpayer will not be relieved of tax or interest liability because of a claimed oral representation of the Department.

PENALTIES -- LATE PAYMENT -- WAIVER -- HEAVY WORKLOAD. A heavy workload resulting from an employee's misconduct is not a circumstance beyond the taxpayer's control for purposes of obtaining a waiver of late payment penalties.

INTEREST -- UNCLEAR TAX LIABILITY. The fact that the taxpayer's tax liability was unclear and it could not compute its tax without an interpretive ruling and audit is not identified by Rule 228 as a circumstance under which the Department will cancel interest.

PENALTY -- LATE PAYMENT -- LOST MAIL -- SITUATION 7. Where taxpayer alleges that he timely mailed a remittance and that it either went lost in the mail or within the Department, the penalty cannot be waived if taxpayer does not meet all conditions of Rule 228's situation number 7. The taxpayer had incurred prior unexcused delinquent penalties which breached situation number 7.

PENALTY -- LATE PAYMENT OF TAX DUE -- BEYOND CONTROL OF TAXPAYER -- TAX RETURN FORMS NOT TIMELY FURNISHED. It is beyond the control of the taxpayer if the Department has a reasonable time to mail tax returns but does not do so with sufficient time to permit the completed return to be paid before its delinquent date.

PENALTY -- LATE PAYMENT -- ABSENCE OF POSTMARKED ENVELOPE. A return is considered timely where there is evidence that the return was mailed by the due date; where the Department has discarded the postmarked envelope; and where the Department employee who processed the return has no clear recollection of the postmarked date.

PENALTIES -- LATE PAYMENT OF TAXES DUE -- EMPLOYEE'S FAILURE TO PERFORM DUTIES -- INADEQUATE COMPUTER SYSTEM -- NOT IMMEDIATELY KNOWN. Where taxpayer was not immediately aware of its employees not performing duties to file timely tax returns and its computer system had to be reprogrammed, the circumstances were not beyond the control of the taxpayer which permits waiver of late payment penalties. Rule 228's situation number 7 is not applicable to excuse penalty in this case because it applies only to late tax returns where payment is made within 30 days after the due date.

PENALTIES -- WAIVER -- ORAL INSTRUCTIONS. The Department will consider a waiver of delinquent penalties where a taxpayer was unregistered because of claimed oral advice from a Department employee, only if the weight of the evidence supports such a claim.

PENALTIES -- INTEREST -- UNREGISTERED TAXPAYER. Washington law provides that the Department shall add interest and late payment penalties if a person fails to make any return required by the Revenue Act. Accord: 1 WTD 287 (1986).

INTEREST -- WAIVER -- ORAL INSTRUCTIONS -- ETB 419. The Department of Revenue has no authority to abate a tax or cancel interest owing on the basis of a taxpayer's recollection of oral instructions given by a department employee. Accord: 1 WTD 133 (1986) and 1 WTD 93 (1986).

PENALTY -- LATE PAYMENT OF TAX ASSESSMENT -- POST OFFICE CANCELLATION MARK -- CIRCUM- STANCES BEYOND CONTROL OF TAXPAYER. A remittance transmitted to the Department by U.S. Mail is deemed filed or received on the date shown by the post office cancellation and stamped upon the remittance envelope. Where the evidence shows that the taxpayer deposited the remittance envelope one day before the due date in one city and the envelope was taken by the postal system to another city for cancellation which was done one day after the due date, the situation was beyond the control of the taxpayer.

Rule 178; Rule 228; RCW 82.12.010; RCW 82.32.070; RCW 82.32A.030:

RULE 228; RCW 82.32.090: PENALTY -- EVASION – INTENTIONAL AVOIDANCE. Evidence that the taxpayer was aware of his tax liabilities based on his prior years of reporting income, paying tax and remitting collected retail sales tax, and that the taxpayer deliberately failed to file tax returns while knowingly performing retailing activities, establishes intent to evade.

RULE 228; RCW 82.32.105(3): WAIVER OF INTEREST. The Department of Revenue does not have the authority to waive interest assessed when the taxpayer made a good faith effort to comply with the law.

RCW 82.32A.020: PRIOR WRITTEN INSTRUCTIONS. The taxpayer had the right to rely on the holding of a previous determination issued to the taxpayer.

RULE 228; RCW 82.32.105(1): PENALTY WAIVER – “CIRCUMSTANCE BEYOND THE CONTROL” – PERSONNEL CHANGE. Penalty waivers are appropriate for immediate or unexpected events in the nature of emergencies that cause late filing and/or payment of returns, and the loss of an office manager is not such a circumstance.

RULE 228(1)(a); RCW 82.32A.030: TAXPAYER’S DUTY TO KNOW THEIR TAX REPORTING OBLIGATIONS. Taxpayer’s alleged lack of knowledge as to what tax classification to report its revenues under pre-assessment does not justify relief from the assessment. Taxpayer had a statutory duty to know its reporting obligations.

RULE 228 – PENALTIES – EVASION – RETAIL SALES TAXES -- COLLECTED BUT NOT REMITTED. Evasion penalty is upheld when evidence indicated that a landscaper knowingly charged and collected retail sales taxes from its customers and did not report them as taxes due on its excise tax returns, but instead filed his taxes under the service and other activities classification of the B&O tax.

RCW 82.32A.020; RCW 82.32A.030: TAXPAYER RIGHTS AND RESPONSIBILITIES. Taxpayer has the right to rely on specific written tax reporting instructions from the Department. Taxpayer has the responsibility to seek instructions from the Department when uncertain about its tax reporting obligations. Taxpayer was neither given specific written instruction nor did it seek specific written tax reporting instructions from the Department.

RULE 228 – PENALTIES – EVASION – RETAIL SALES TAXES -- COLLECTED BUT NOT REMITTED. Evasion penalty is upheld when evidence indicated that a landscaper knowingly charged and collected retail sales taxes from its customers and did not report them as taxes due on its excise tax returns, but instead filed his taxes under the service and other activities classification of the B&O tax.

RCW 82.32A.030; RCW 82.32.050: TAXPAYER RESPONSIBILITIES – WAIVER – MISUNDERSTANDING OF TAX OBLIGATIONS. Taxpayers are responsible for knowing their tax reporting obligations and for paying taxes in a timely manner, and to seek instructions from the Department when they are uncertain about their tax obligations. The Department is required to assess tax against a taxpayer if it determines that tax has been paid less than that properly due. A taxpayer’s misunderstanding of its tax obligations is not a basis for waiver of tax assessed.

RULE 228; RCW 82.32.090: RETAIL SALES TAX – EVASION PENALTY – UNREMITTED RETAIL SALES TAX – TAXPAYER’S INTENT – DEPARTMENT’S BURDEN – CLEAR, COGENT, AND CONVINCING EVIDENCE. An audit of the taxpayer’s business records showed that the taxpayer charged and collected retail sales tax over a five-year period. Taxpayer, however, did not remit the collected retail sales tax to the Department. Audit added the evasion penalty to the taxpayer’s assessment.

U.S. CONST. amend. V (FIFTH AMENDMENT): WHETHER DEPARTMENT’S ASSESSMENT OF CIGARETTE TAX PENALTY AGAINST TAXPAYER, WHILE TAXPAYER IS PARTY TO A FORFEITURE ACTION AND CRIMINAL PROSECUTION INVOLVING THE SAME CIGARETTES, IS A VIOLATION OF THE DOUBLE JEOPARDY CLAUSE OF THE FIFTH AMENDMENT. As explained in Hudson v. U.S., 522 U.S. 93, 118 S.Ct. 488 (1997), monetary penalties have historically been viewed as not punishment. Moreover, the fact that conduct which gives rise to penalties also provides the basis for criminal sanctions is insufficient to render such penalties punitive.

RCW 82.32.105; RULE 228 – PENALTIES & INTEREST – WAIVER – LACK OF KNOWLEDGE. Penalties and interest cannot be waived for either financial hardship or lack of knowledge.

RCW 82.32.052 – AMNESTY – UNRELATED CLAIM FOR REFUND. The granting of amnesty for penalties and interest on a B&O tax liability did not bar an unrelated claim for the refund of a retail sales tax for same period

RULE 228; RCW 82.32A.030, RCW 82.32.090, RCW 82.32.105: PENALTY – WAIVER – TAXPAYER’S RIGHTS AND RESPONSIBILITIES – CIRCUMSTANCES BEYOND THE TAXPAYER’S CONTROL. A taxpayer has the responsibility to know its reporting obligations, and when it is uncertain about its obligations, to seek instructions from the department of revenue. A taxpayer that was unaware of the change in nexus and apportionment laws is not eligible for a waiver of penalties due to its lack of knowledge.

RCW 82.32A.020(2); WAC 458-20-228(9)(a)(iii)(E): TAX ADVICE – RELIANCE ON THIRD PARTY TAX ADVICE. Taxpayer’s reliance on tax advice from a third party that it does not owe Washington taxes is not a basis for waiving the tax or penalties.

RULE 228; RCW 82.32.105: WAIVER OR CANCELLATION OF PENALTIES AND INTEREST. A taxpayer is precluded from denying liability for the delinquent penalty based on a claim that a tax assessment notice was not received by mail. It has been the Department’s position that its duty to notify the taxpayer of an assessment is satisfied where the Department sends the notice of assessment to the address given by the taxpayer.

RCW 82.32.105: WAIVER OF TAXES, INTEREST, AND PENALTIES – CONSISTENT AND TIMELY FILING OF TAX RETURNS. Consistent and timely filing of tax returns is a taxpayer’s duty under the law, RCW 82.32.045, and is not a basis upon which the Department has authority to waive or cancel taxes, interest, or a substantial underpayment penalty.

RCW 82.32.090(7); WAC 458-20-228(5)(f): EVASION PENALTY – INTENT TO EVADE; MOTIVATION. A Taxpayer’s difficult financial circumstances explain its motivation for tax evasion, but do not negate its intent to evade. With intentional evasion, there is no basis for waiving the evasion penalty.

RULE 17001, RULE 228; RCW 82.04.190, RCW 82.32.050, RCW 82.32A.020, RCW 82.32.105: USE TAX/DEFERRED SALES TAX, PENALTIES, INTEREST – GOVERNMENT CONTRACTING, WHOLESALING – SUBCONTRACTOR, WAIVER OF PENALTIES AND INTEREST: The Department denied the taxpayer’s petition for reversal of an assessment for use tax/deferred sales tax associated with the taxpayer’s status as a government contractor (the taxpayer acted as a subcontractor and performed jobs on federally-owned property).

RULE 228; RCW 82.32.105: SUBSTANTIAL UNDERPAYMENT PENALTY – WAIVER – LACK OF KNOWLEDGE. Penalties cannot be waived for lack of knowledge of a tax obligation.

RULE 228; RCW 82.32.090: PENALTY – EVASION – INTENTIONAL AVOIDANCE. Evidence that Taxpayer was aware of his tax liabilities based on his long prior history of remitting retail sales tax, his failure to file excise tax returns or pay taxes for the period under review, his substantial understatement of sales when contacted by the Department, and his claim that he was working alone despite evidence showing otherwise, establishes intent to evade.

Rule 228; RCW 82.32.105 – WAIVER OR CANCELLATION OF PENALTIES OR INTEREST – The taxpayer’s misunderstanding of the instructions to the Annual Reconciliation of Apportionable Income Form is not a circumstance beyond its control that caused the late payment.

RCW 82.32A.020(2) – RIGHTS. RCW 82.32A.020(2) authorizes the Department to waive penalties only when a taxpayer has relied on “specific, official written advice and written tax reporting instructions from the department” to its proven detriment. The taxpayer’s late payment was not caused by the instructions on the Annual Reconciliation of Apportionable Income Form because the form did not instruct the taxpayer that it did not have to pay the additional taxes by the due date. Thus, the taxpayer did not detrimentally rely on the instructions.

Rule 228; RCW 82.32.090(1) and (4): WAIVER OF TAXES, INTEREST, AND PENALTIES – VOLUNTARY REGISTRATION; VOLUNTARY DISCLOSURE PROGRAM. Previously registered persons who engage in taxable activities in periods after their previously open tax reporting accounts have been closed, and who voluntarily reopen their accounts prior to being contacted by the Department, do not qualify for the Voluntary Disclosure Program and are not entitled to waiver of the late payment of return penalty imposed by RCW 82.32.090(1).

RULE 228; RCW 82.32.105(1): LATE PAYMENT PENALTY – CANCELLATION. Taxpayer did not present evidence that the late payment of tax was caused by a circumstance beyond the control of the taxpayer.

RCW 82.32.590; WAC 458-20-228; ANNUAL TAX INCENTIVE SURVEY – CIRCUMSTANCES BEYOND CONTROL: Where a taxpayer fails to timely file its annual tax incentive survey because the courtesy reminder was mailed to its address of record but not timely routed [internally] to the person responsible for completing the survey, this does not constitute a circumstance beyond the control of the taxpayer that would allow the Department to extend the due date of the annual survey

RCW 82.32.105; WAC 458-20-228; PENALTY WAIVER – CIRCUMSTANCES BEYOND THE CONTROL OF THE TAXPAYER – BASED ON THE ALLEGED FRAUD OF KEY EMPLOYEE. The taxpayer’s statements alleging employee fraud, along with evidence that the former employee was denied unemployment benefits, are insufficient to establish that employee fraud occurred sufficient to waive penalties as a circumstance beyond the taxpayer’s control.

RULE 228; RCW 82.04.4452; RCW 82.32.590: BUSINESS AND OCCUPATION TAX – TAX CREDIT FOR QUALIFIED RESEARCH AND DEVELOPMENT SPENDING – ANNUAL SURVEY REQUIREMENT – CRITERIA FOR EXTENSION OF FILING DEADLINE. Failure to timely file with the Department the annual survey required to qualify for a research and development (R&D) spending business and occupation (B&O) tax credit results in loss of the credit. Employee mistake is not a circumstance beyond the control of the taxpayer qualifying for an extension of time to file the survey.

RULE 228; RCW 82.32.105: CIRCUMSTANCES BEYOND THE CONTROL OF THE TAXPAYER – ACT OF FRAUD, EMBEZZLEMENT, OR THEFT – PROOF REQURED. A taxpayer must demonstrate that the alleged criminal act or misconduct actually occurred in order to have a penalty waived.

RULE 228; RCW 82.32.105: CIRCUMSTANCES BEYOND THE CONTROL OF THE TAXPAYER – ACT OF FRAUD, EMBEZZLEMENT, OR THEFT – INTERNAL CONTROLS. A taxpayer must show safeguards or internal controls were in place to prevent fraud, embezzlement, or conversion, and must also prove that those safeguards or internal controls were reasonable, in order to prove that the failure to pay tax was due to circumstances beyond the taxpayer’s control.

PENALTY -- LATE PAYMENT -- UNREGISTERED TAXPAYER -- SITUATION 2 -- ERRONEOUS INFORMATION -- SITUATION 3 -- ILLNESS IN TAXPAYER'S IMMEDIATE FAMILY. Rule 228's situation 2, the erroneous information exception, does not apply when taxpayer's employee or employment agency gives the erroneous information. Rule 228's situation 3, illness exemption, does not apply where the taxpayer was not registered for four months while the illness was for three weeks.Nonregistration indicatedno intent to file timely tax returns and was the cause for the late payment, not illness.

PENALTY -- LATE PAYMENT OF TAX DUE -- CONFUSION -- BEYOND CONTROL OF TAXPAYER. It is not beyond control of taxpayer when confusion at its liquidation and closing activities causes a late payment of taxes. Situation 7 of Rule 228 does not apply where taxpayer was previously delinquent and delinquency was not excused under Rule 228's situations 1 through 6.

PENALTY -- LATE PAYMENT OF TAX DUE -- BEYOND CONTROL OF TAXPAYER -- DEATH OF OFFICE MANAGER. Rule 228's situation 3 excuses penalty where there is death of the taxpayer or his accountant prior to the filing date of a tax return. It is beyond the control of a taxpayer if its office manager dies before the filing date and cannot complete the tax return before the due date. Penalty cancelled.

INTEREST -- MANDATORY -- NOT A PENALTY -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER.Assessment of interest upon the tax deficiencies disclosed by audit is mandatory.The assessment of interest is not in the nature of a penalty.Waiver of the interest is authorized when caused by circumstances beyond the control of taxpayer.Taxpayer's initial lack of experience in and lack of understanding of the law are not circumstances beyond the control of taxpayer.

LATE PAYMENT PENALTY -- WAIVER OF -- ILLNESS OF FATHER. Where the late payment of a tax assessment was caused by the serious illness of the taxpayer president's father, the penalty therefore, but not the interest, is waived

INTEREST -- LATE PAYMENT PENALTIES -- WAIVER -- INCORRECT WRITTEN INSTRUCTIONS FROM DEPARTMENT -- EVASION PENALTY DISTINGUISHED. The Department will consider a waiver of interest and late payment penalties on a tax assessment in situations where it has advised a taxpayer it need not register if the written instructions werebased on correct information about the taxpayer's activities in this state.

TAX WARRANT -- PENALTY -- WAIVER OF PENALTY. Where taxpayer was delinquent in payment of taxes and penalties due for an extended period of time resulting in issuance of a tax warrant to enforce collection, the five percent warranty penalty is sustained.

PENALTIES -- LATE PAYMENT OF TAXES DUE -- EMPLOYEE'S FAILURE TO PERFORM DUTIES. Where taxpayer's employees erroneously performed their duties by not budgeting for payment of taxes, the circumstance was not beyond the control of the taxpayer. Penalties sustained.

TAX WARRANT -- ISSUANCE -- FIVE PERCENT WARRANT PENALTY -- WAIVER OF PENALTY. If a tax or penalty has not been paid within 15 days after it becomes due, the Department may issue a tax warrant to which is added a penalty of five percent of the tax due. Where taxpayer has paid substantially all of the tax assessment before issuance of the warrant and the taxpayer's file reveals no compelling reason for issuance of the warrant, the warrant penalty may be waived.

TAX ASSESSMENT -- DELINQUENCY PENALTY -- INTEREST. Where a tax assessment is not paid by the due date, there is imposed a ten percent delinquency penalty on the tax due and interest accrues until date of payment.

TAX ASSESSMENT -- DELINQUENCY PENALTY -- NONRECEIPT OF NOTICE. A taxpayer is precluded from denying liability for a delinquency penalty on a tax assessment based on a bare assertion of nonreceipt of the tax assessment notice by mail. The Department is authorized by statute, RCW 82.32.050, to mail tax assessment notices.

INTEREST -- WAIVER -- IGNORANCE OF TAX LAW. An interest assessment may only be waived, under Rule 228, if the failure to pay taxes when due was the result of written instructions from the Department, or if extension of the due date was for the sole convenience of the Department. Ignorance of tax laws does not constitute a circumstance beyond the taxpayer's control, for purposes of applying the interest waiver provisions of RCW 82.32.105.

PENALTY -- LATE PAYMENT -- ASSESSMENT. Rule 228 applies to the late payment/filing of a tax return, not to the late payment of a tax assessment. The criterion for waiver of penalty in the latter situation is simply the statutorily-stated "circumstances beyond the taxpayer's control." Oversight by a taxpayer employee does not satisfy that criterion.

PENALTY -- LATE PAYMENT -- UNREGISTERED TAXPAYER -- UNKNOWN TAX LIABILITY. Where taxes were assessed against a taxpayer for time period when not registered, Rule 228's situation 7 is not applicable to excuse penalty.It applies only to late tax returns where payment is made within 30 days after the due date. Lack of knowledge of tax law changes is not a basis for abating penalty.

PENALTY -- LATE PAYMENT OF TAX DUE -- UNREGISTERED TAXPAYER -- INABILITY TO COPE WITH BUSINESS EXPANSION -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER. Where a taxpayer failed to register and pay taxes in a timely manner because it did not have adequate and knowledgeable personnel to cope with the situation due to explosive business expansion, it is not a circumstance beyond the control of the taxpayer that excuses late payment penalties.

PENALTY -- WAIVER -- SITUATION (6). The Department will consider a waiver of penalties where a taxpayer makes a timely application in writing for the proper forms and they are not furnished in sufficient time to file the return before delinquent. An out-of-state business which began doing business in this state in 1986 not found to have made timely application for proper forms by registering in 1982 but not requesting 1986 excise tax returns when it began doing business here.

PENALTIES AND INTEREST; OUT-OF-STATE MANUFACTURER -- LACK OF KNOWLEDGE. If a taxpayer fails to pay taxes as required, the Department shall assess the tax and shall add interest and penalties due. RCW 82.32.050; RCW 82.32.090; RCW 82.32.100. Lack of knowledge of a tax obligation or voluntary compliance once an obligation is known are not identified by statute or rule as a basis for abating interest or penalties. 1 WTD 67 (1986).

PENALTY -- LATE PAYMENT OF TAX DUE -- CORPORATE RESTRUCTURING -- NEW ACCOUNTING STAFF -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER. Where taxpayer failed to pay taxes in a timely manner because corporate restructuring caused massive paperwork to be handled by a newly formed accounting staff, it is not a circumstance beyond the control of the taxpayer that excuses late payment penalties.

PENALTIES -- INTEREST -- LATE PAYMENT -- RETURNS -- REGISTRATION -- LEGAL ADVICE -- RELIANCE. Taxpayer's mistaken belief, based upon the advice of its legal department, that it was not subject to Washington tax liability is not acircumstance beyond the control of the taxpayer for purposes of waiving late payment penalties and interest associated with tax deficiencies assessed for periods in which the taxpayer was not registered with the Department and failed to file returns and pay taxes.

INTEREST -- WAIVER -- FAILURE OF DEPARTMENT TO SEND TAX RETURN FORMS. An interest assessment may only be waived, under Rule 228, if the failure to pay taxes when due was the result of written instructions from the Department, or if extension of the due date was for the sole convenience of the Department. Thus, failure of the Department to send tax forms to a taxpayer does not constitute grounds for waiver of interest.

USE TAX -- INTEREST -- ESTOPPEL -- MISINFORMATION FROM OTHER STATE AGENCIES.The Department of Revenue is not estopped from collecting taxes when the failure of a taxpayer to pay was due to misinformation supplied to the taxpayer by another state agency.

PENALTIES -- WAIVER OF -- LATE FILING -- DISHONORED CHECK. Late payment penalty applies where original check dishonored by bank because of missing signature.

PENALTY -- LATE PAYMENT OF TAX DUE -- CONFUSION CAUSED BY A MOVE -- BEYOND CONTROL OF TAXPAYER. It is not beyond the control of the taxpayer when confusion arising out accountant's move to another office caused late payment of the tax due. Situation 7 of Rule 288 does not apply where taxpayer was previously delinquent and delinquency was not excused under Rule 228's situations 1 through 6.

PENALTIES -- LATE PAYMENT -- INADVERTENCE. If a taxpayer fails to pay taxes by the due date, there shall be assessed a penalty, unless the delay was caused by circumstances beyond the taxpayer's control. Nonpayment of taxes pending the outcome of litigation is not such circumstances.

PENALTIES -- ASSESSMENT -- LACK OF KNOWLEDGE. The fact that a taxpayer has not ascertained that tax is due and owing is not a circumstances for which penalties may be excused.

INTEREST -- WAIVER -- DELAY IN ISSUANCE OF DETERMINATION -- ADMINISTRATIVE LAW JUDGE AND DIRECTOR'S LEVEL APPEAL. Post-audit interest may be waived if the delay in issuance of an initial or Final Determination is for the sole convenience of the Department.Det. 87-102, 2 WTD 425 (1987).

PENALTIES -- WAIVER -- CIRCUMSTANCES BEYOND TAXPAYER'S CONTROL -- CONFUSION CAUSED BY COMMUNICATION WITH DEPARTMENT. Where assessments were issued, then cancelled due to Department error, then re-issued; and where taxpayer reasonably believed, after communication with the Department, that still another corrected assessment would be re-issued, the 10% penalty for late payment of the assessment may be waived.

PENALTIES -- LATE PAYMENT -- INADVERTENCE. If a taxpayer fails to pay taxes by the due date, there shall be assessed a penalty, unless the delay was caused by circumstances beyond the taxpayer's control. Nonpayment of taxes pending the outcome of the National Can litigation or a misapplication of the MATC is not such a circumstance.

PENALTY -- LATE PAYMENT OF TAX DUE -- UNREGISTERED TAXPAYER -- TELEPHONE REQUESTS FOR TAX RETURN FORMS -- MISTAKEN BELIEF. Where taxpayer failed to register in a timely manner and requested tax returns by telephone, the late payment of taxes due cannot be excused per Rule 228's situation 6. Nor does Rule 228's situation 7 apply where prior returns have been delinquent and not excused. Taxpayer's mistaken belief that it will be on a quarterly or annual reporting basis does not excuse penalty when taxpayer is placed on a monthly basis attime it registers.

PENALTY -- LATE PAYMENT OF TAX DUE -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER -- CONFUSION IN COMMUNICATIONS WITH THE DEPARTMENT -- ADDITIONAL PENALTY. Where taxpayer's remittance of tax was delayed beyond the 5 percent penalty period as a result of confusion in communications with the Department resulting in further delay and additional penalty, Department's mishandling of the situation excuses additional penalty as a circumstance beyond the control of the taxpayer.

INTEREST -- PENALTY -- WAIVER -- UNREGISTERED TAXPAYER -- UNAWARE OF REQUIREMENT TO REGISTER -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER. Taxpayer's unawareness of requirement to register and pay taxes is not a circumstances beyond its control to justify waiver of interest and penalty mandated by statutes.

PENALTIES -- TIMELINESS -- MAILED PAYMENTS -- POSTMARK. Payment deemed timely where substantial evidence presented that payment was mailed on due date and where Department discarded postmarked envelope. ACCORD. Determination No. 86-257, 1 WTD 195 (1986).

PENALTIES -- TAX RETURN -- PARTIAL PAYMENT. Where a taxpayer sends only a portion of the tax due with its tax return, the late-payment penalty is to be applied only against the deficiency.

PENALTIES -- LATE PAYMENT OF TAXES DUE -- EMPLOYEE'S MISCONDUCT -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER. Where taxpayer's employee neglected duty to file tax returns and engaged in other misconduct, the circumstances were not beyond the control of the taxpayer. Late payment penalties sustained. Where Department in error assessed a late payment penalty on a tax return which was timely filed, the penalty is rescinded.

PENALTY -- SITUATION 7 -- LACK OF KNOWLEDGE -- UNINTENTIONAL CIRCUMSTANCES. Lack of knowledge of a tax obligation resulting in failure to file returns and pay taxes is not a circumstances beyond the control of a taxpayer.All sub-parts of situation 7 in Rule 228 must be met in order for a penalty to be waived.Accord:Det. 87-193, 3 WTD 237 (1987).

PENALTY -- TAX RETURN -- LATE. Taxpayers reporting on a monthly basis must file tax returns within 25 days after the close of the month. A 5% penalty is imposed if the return is filed within the next 30 days.

PENALTY -- WAIVER. A penalty may be waived due to circumstances beyond the control of the taxpayer. Rule 228 sets forth the only circumstances justifying waiver. The penalty may be waived for a first-time delinquent filer.

PENALTIES -- INTEREST -- AMOUNT DUE -- COMPUTATION. Penalties for late payment are computed from the date determined to be due and are not in lieu of interest; interest can be assessed as well from the first day after the close of the calendar year in which the taxes were accrued.

PENALTY -- LATE FILING OF RETURN -- SERIOUS ILLNESS. The serious illness waiver provision is limited; the illness must occur in a manner that shows urgency so as to eliminate a reasonable time within which to comply with the filing requirements.Waiver denied where two and one-half months elapsed between the serious injury of an accountant's brother and the due date of a tardily filed tax return.

PENALTY -- WAIVER -- TAX ASSESSMENT -- DELINQUENCY PENALTY -- PERSONNEL CHANGE -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER. Where a tax assessment is not paid by the due date, there is imposed a ten percent delinquency penalty on the tax due. Taxpayer's change in personnel engaged in reviewing the audit findings is not a circumstances beyond the control of the taxpayer that excuses the delinquency penalty.

PENALTY -- WAIVER -- UNREGISTERED TAXPAYER -- UNAWARE OF RELOCATION OF EMPLOYEE -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER. Taxpayer's unawareness that an employee had been relocated to Washington to solicit sales in Washington, which required registration and tax liability consequences, is not a circumstance beyond its control to justify waiver of late payment penalty mandated by statute.

PENALTIES -- LATE PAYMENT -- TEN PERCENT PERIOD -- DATE OF FILING RETURN. A taxpayer who hand delivers a tax return to the Department on the date which the return clearly states is the start of the 10% penalty period is liable for the 10% penalty. The instructions on the return are not misleading.

PENALTY -- LATE PAYMENT OF TAX DUE -- UNREGISTERED TAXPAYER -- MISTAKEN ASSUMPTION -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER. Where taxpayer failed to register in a timely manner and mistakenly assumed after registering that it would be reporting on a quarterly basis which caused late filing of monthly tax returns, the circumstances were not beyond control of the taxpayer. Accordingly, late payment penalties cannot be waived.

B&O TAX -- CREDIT -- INVENTORY -- INGREDIENT. If an item is an ingredient for purposes of the sales tax exemption for ingredients then it is also inventory for purposes of the inventory tax credit. F.I.D.

PENALTY -- INTEREST -- WAIVER -- UNREGISTERED TAXPAYER -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER. Taxpayer's internal audit and summer vacations of employees at the time that taxpayer received a tax assessment for taxes due in prior years while it was not registered is not a circumstance beyond its control to justify waiver of interest and penalties mandated by statutes.

PENALTIES -- LATE PAYMENT -- INADVERTENCE. If a taxpayer fails to pay taxes by the due date, there shall be assessed a penalty, unless the delay was caused by circumstances beyond the taxpayer's control. Neither claimed ignorance of tax laws, nor excuse that contractor should have ensured taxes were paid, is such a circumstance.

PENALTIES -- LATE PAYMENT -- WARRANT -- INADVERTENCE. If a taxpayer fails to pay taxes by the due date, there shall be assessed a penalty, unless the delay was caused by circumstances beyond the taxpayer's control.Claimed ignorance of tax laws is not such a circumstance.

PENALTIES -- WARRANT -- ACCESS TO RECORDS. If a warrant is issued by the Department, there shall be assessed a five percent warrant penalty, unless the nonpayment leading to the warrant was caused by circumstance outlined in WAC 458-20-228. A partner's lack of access to the taxpayer-partnership records is not such a circumstance so as to excuse the taxpayer-partnership.

INTEREST -- WAIVER. Taxpayer's misunderstanding or misinterpretation of the tax laws is not grounds to waive or cancel interest imposed in a tax assessment following an audit of taxpayer's business records.

INTEREST -- ASSESSMENT -- WAIVER -- FACTORS. The addition of interest to an audit tax assessment is mandatory. Interest may be waived or cancelled only where circumstances exist which are beyond the control of the taxpayer.

PENALTIES -- INTEREST -- LIMITATIONS -- DEFICIENT AND DELINQUENT PAYMENTS. Where a taxpayer voluntarily discloses a tax liability and no fraud or misrepresentation is present, assessment of tax will be made for no more than four taxable years plus the current year.

INTEREST -- WAIVER -- RELIANCE ON PREVIOUS AUDIT INSTRUCTIONS. Interest waived where taxpayer was reporting taxes due as advised in a previous audit.

LATE -- PAYMENT PENALTY -- BUILDING -- CONSTRUCTION OF -- LIABILITY OF OWNER FOR. Where a property owner fails to pay retail sales tax to a contractor for the construction of a home on the former's property, a late-payment penalty may not be assessed against the owner unless the Department has first specified a tax due date to the owner.

PENALTIES -- INTEREST -- LATE PAYMENT -- RETURNS -- REGISTRATION -- LEGAL ADVICE -- RELIANCE. Taxpayer's mistaken belief that it was not subject to Washington tax liability is not a circumstance beyond the control of the taxpayer for purposes of waiving late payment penalties and interest associated with tax deficiencies assessed for periods in which the taxpayer was not registered with the Department and failed to file returns and pay taxes.

PENALTY -- LATE PAYMENT OF TAXES DUE -- TEMPORARY CERTIFICATE OF REGISTRATION -- WHEN TAX IS DUE. Where taxpayer, operating a concession at fair for four days under a Temporary Certificate of Registration, quits or otherwise disposes of its business, the taxpayer is required to file a tax return with payment of tax due within ten days thereafter. Late payment of taxes incurs penalty provisions of RCW 82.32.090.

INTEREST -- ASSESSMENT. Interest runs from the last day of the year in which the tax was due until the date paid. The fact that the tax was paid before the assessment was issued does not extinguish the obligation to pay the interest.

A STATEMENT OF PURPOSE AND INTENT WITH RESPECT TO THE ASSESSMENT OF PENALTIES AND INTEREST

WARRANT PENALTY -- WARRANT ISSUED BUT NOT FILED. The warrant penalty imposed by RCW 82.32.090 is effective upon the issuance of a warrant. The fact that a warrant is not filed in superior court does not void the penalty. Issuance and filing are separate acts under RCW 82.32.210 F.I.D.

INTEREST -- WAIVER -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER. Where a bank chose to change its method of reporting its income to a cost formula from a previously approved three factor formula, and the Department had advised the taxpayer in writing that it would not accept the cost method that the bank used, the failure of the taxpayer to report correctly was not due to a circumstance beyond its control within the meaning of RCW 82.32.105.THIS DETERMINATION HAS BEEN OVERRULED OR MODIFIED IN WHOLE OR PART BY DET.NO. 89-459A, 11 WTD 17 (1991) & DET.NO. 01-006, 20 WTD 124 (2001).

REAL ESTATE EXCISE TAX: INTEREST PENALTY -- REAL ESTATE EXCISE TAX -- LATE PAYMENT -- LOSS IN MAIL. Loss of real estate excise tax payment in mail will not excusepayment of interest imposed by RCW 82.45.100.

MISCELLANEOUS -- B&O TAX -- SALES TAX -- LIABILITY -- RELIANCE ON PRIOR AUDIT. Prior audit which missed the taxpayer's reporting of income under an incorrect classification does not entitle taxpayer to rely on error and escape sales and the proper B&O taxation in later years.

LATE PAYMENT PENALTIES -- RETAIL SALES TAX DELINQUENCY -- CANCELLATION.

PENALTY -- DELINQUENT TAXES -- UNREGISTERED TAXPAYER -- TAX CREDITS OF AFFILIATED CORPORATIONS -- REDUCTION OF PENALTY. Where unregistered taxpayer is assessed penalty for delinquent taxes and its affiliated corporations have tax credits at the same time, the tax credits cannot offset the taxpayer's tax liability so as to reduce the penalty. Each corporation, though in an affiliated group, has separate tax liability. The law makes no provision for filing of consolidated tax returns or consolidated tax liability.

WAIVER OF INTEREST -- ORAL INSTRUCTIONS. Audit interest not waived where the failure to pay use tax on materials for federal contracts was found to be neither the direct result of written instructions given by the Department nor for the sole convenience of the Department.

PENALTY -- MANDATORY -- LATE PAYMENT OF TAX DUE -- UNREGISTERED TAXPAYER -- UNAWARE OF TAX LIABILITY. Taxpayer's unawareness of requirements to register and pay taxes is not a circumstance beyond its control to justify waive of penalty mandated by statutes.

INTEREST -- RELIANCE ON COMMUNICATION WITH DEPARTMENT -- WAIVER. Interest not waived where the late-payment of a tax assessment was found to be neither the direct result of written instructions given by the Department nor for the sole convenience of the Department.

PENALTIES AND INTEREST -- ASSESSMENT -- WAIVER. Rule 228 does not apply to penalties imposed on an assessment. RCW 82.32.050 controls the imposition of such penalties and they may only be waived upon a finding that late payment was due to circumstances beyond the control of the taxpayer.

PENALTIES AND INTEREST -- WAIVER -- CIRCUMSTANCES BEYOND THE CONTROL OF TAXPAYER -- WHAT CONSTITUTES. Illness of taxpayer's accountant is not a circumstances beyond taxpayer's control where the illness was not the cause of the untimely payment.

DEPARTMENT'S DUTY TO NOTIFY TAXPAYER OF ASSESSMENT -- NOTICE TO ACCOUNTANT. The Department's duty to notify the taxpayer of an assessment is satisfied where the Department sends the notice of assessment to the address given by the taxpayer.

MISCELLANEOUS -- ESTOPPEL -- ORAL INSTRUCTIONS FROM DEPARTMENT. On narrow facts presented, taxpayer has supported its account of instructions given during two telephone conversations with the Department sufficiently to justify permitting it to amend its reporting methods prospectively.

MISCELLANEOUS: ORAL REPRESENTATION. A taxpayer will not be relieved of tax or interest liability because of a claimed oral representation of the Department. This is so in this case notwithstanding the fact that the taxpayer's accountant allegedly took notes of the cited telephone conversation.

B&O TAX -- MISINFORMATION -- BY DEPARTMENT EMPLOYEE -- EXCISE TAX RETURN -- ESTOPPEL. Where a Department employee filled out a taxpayer's excise tax return incorrectly by using a line for an inapplicable B&O category, the taxpayer was entitled to rely on that writing. The Department is estopped from collecting B&O tax at a different, higher classification where the taxpayer relied on such instruction to its detriment.

INTEREST -- ACCRUAL -- DUE DATE OF TAXES. Interest accrues on unpaid tax liabilities at the rate of 9% per annum from the date the tax was due. When taxes originally deferred are found to be due, the due date of the taxes is the due date given to the taxpayer when the liability is accelerated. Interest then accrues on that liability at 9% per annum, calculated from the last day of the year in which the taxes were due. The interest is not compounded, but is instead only simple interest, calculated on a daily basis.

PENALTY -- LATE PAYMENT -- WAIVER -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER -- WHAT CONSTITUTES. If a taxpayer fails to pay taxes as required, the Department of Revenue shall assess the tax and add interest and penalties as required by the Revenue Act. Neither lack of knowledge of a tax obligation, hardship, nor voluntary compliance once an obligation is known is a basis for abating interest or penalties. ACCORD Det. 86-226, 1 WTD 67 (1986); Det. 87-235, 3 WTD 363 (1987).

INTEREST -- WAIVER -- ORAL MISINFORMATION. The Department is unable to waive interest assessed in an audit report on the basis of a taxpayer's recollection of oral instructions given by an agent of the Department.

PENALTIES OR INTEREST -- CIRCUMSTANCES BEYOND CONTROL OF TAXPAYER. Lack of knowledge of a tax obligation does not render failure to pay taxes "beyond the control" of the taxpayer within the meaning of RCW 82.32.105 and WAC 458-20-228.

RETURN -- LATE PAYMENT -- POSTMARK -- POSTAL DELAY. Where taxpayer asserts that envelope containing return was deposited in the mail ten days prior to due date and envelope is discarded upon receipt so that postmark is not available for examination, it will be presumed that the envelope was postmarked by the due date and that the return was therefore timely filed.Accord:1 WTD 251 (1986).

B&O TAX -- INVENTORY TAX CREDIT -- PERSONAL PROPERTY TAX -- LATE PAYMENT OF -- EXTENUATING CIRCUMSTANCES. The oversight of an employee of not mailing a personal property tax check which had been misfiled is not an "extenuating circumstance" which permits inventory tax credit to be applied against B&O tax owed by the employer. Two 1983 versions of Rule 228 discussed.

PENALTIES -- UNREGISTERED TAXPAYER. RCW 82.32.100 provides that the Department shall add late payment penalties if a person fails to make any return required by the Revenue Act.