Intention Disregard 25% Penalty Assessed for Failure to Follow Instructions
In a Decision and Order of Determination received this month from the Hearings Division, the Department of Treasury upheld the imposition of the 25% penalty for intentional disregard. The taxpayer, a retailer, paid sales tax on a monthly basis from the sales tax collected figures from cash register tapes. After the end of the year the amount paid was compared to the amount calculated to be due from the annual return, any balance due was paid at that time. The taxpayer did not prepare and retain monthly sales tax worksheets.
From the Decision and Order of Determination:
The audit papers indicate that this is the Petitioner's first audit; however, the auditors found Petitioner showed intentional disregard of the law or rules promulgated by the department specifically noting that Petitioner failed to correctly file their sales tax returns by reporting the 2008 tax return for a different amount than was remitted during the year, failed to provide daily sales records or prepare monthly sales tax worksheets as instructed in the SUW booklet they receive annually, and clearly disregarded the requirement to maintain proper records as required under MCL 205.68(1). Petitioner's argument that intentional disregard does not apply where the business is being run by an insufficiently trained employee manager with an absentee owner, fails. The fact that the owner was absent and not attempting to implement controls or properly train the manager on proper sales reporting and inventory check-in tends to show an intentional disregard for the instructions provided by Michigan Law and the Department for proper reporting and documentation retention. October 19, 2012 - Michigan Department of Treasury