Ignorance Is No Defense – Business Tax Penalty and Washington Occupation Confirmed

Tax arbitrator Andrea Vingo ruled that a prepaid wireless company was properly penalized by the Washington Department of Revenue. The taxpayer filed monthly business and occupation taxes, but reported no income and therefore did not file an annual reconciliation in Washington. During an audit, the Department assessed the fees associated with the reconciliation and applied a penalty. The taxpayer asked the Tax Appeals Board to reinterpret the conflicting tax codes, arguing that the taxpayer could not be expected to file a reconciliation and therefore could not be penalized. The Board was not persuaded by this argument and ruled in favor of the Department.

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