STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BUSINESS DEPOT-ACCOUNTING AND ) TAX CENTER, INC., )

)

Petitioner, )

)

vs. ) Case No. 07-0467

)

DEPARTMENT OF REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice a formal hearing was held on March 29, 2007, by video teleconference from Lauderdale Lakes, Florida, before J. D. Parrish, a designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: No Appearance

For Respondent: John Mika, Esquire

Assistant Attorney General Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

The issue in this case is whether the Respondent, Department of Revenue (Respondent or Department), may levy on the Petitioner’s bank account in order to satisfy a tax liability owed to the Respondent. The Respondent asserts the Petitioner, Business Depot-Accounting and Tax Center, Inc. (Petitioner), owes the Department for delinquent sales tax, interest, and penalties.

PRELIMINARY STATEMENT

On October 18, 2006, the Respondent filed an Electronic Judgment Lien Certificate with the Secretary of State naming the Petitioner as the judgment debtor owing $1167.20. Subsequently, the Respondent issued a Notice of Intent to Levy to advise the Petitioner that it intended to levy on a bank account in the possession or control of the Regent Bank. The notice further asserted that the levy would proceed unless the delinquent amount owed to the Department were paid within 21 days of the notice.

The notice was dated November 28, 2006. On January 16, 2007, the Petitioner filed a request for an administrative hearing and maintained that the assessments underlying the delinquent amount were calculated erroneously.

On January 26, 2007, the Department forwarded the matter to the Division of Administrative Hearings for formal proceedings. The forwarding instrument alleged that the Petitioner “has challenged the Department’s assessment of Sales and Use Tax.”

A Motion to Dismiss filed by the Department on February 2, 2007, was denied. An Order of Pre-hearing Instructions was ignored by the Petitioner. The Department’s Motion in Limine was deemed moot when the Petitioner failed to appear for the hearing. Notice of the hearing was provided to all parties at their addresses of record. No returned mail suggested that notice was not effected. No one appeared to represent the Petitioner’s cause in this matter.

At the hearing, the Respondent presented testimony from Covodis McCoy, a Revenue Specialist; and Noreen Marquez, a Revenue Specialist. The Respondent’s Exhibits 1 through 9 were admitted into evidence. A transcript of the proceedings has not been filed. The Respondent’s Proposed Recommended Order has been considered in the preparation of this Order. The Petitioner did not submit any evidence or post-hearing comments.

FINDINGS OF FACT

1. The Respondent is the state agency charged with the responsibility of collecting sales and use tax owed to the State of Florida. See § 213.05, Fla. Stat. (2006).

2. At all times material to the allegations of this case, the Petitioner was responsible for collecting and remitting to the Department sales and use tax. The return forms itemizing information for these payments require the taxpayer, Petitioner, to represent gross sales, exempt sales, as well as other data that the Department uses to compute the amount that must be remitted to the state.

3. In this case, after extensive communications with the Petitioner, the Department determined that $10,524.20 was owed for taxes, penalties, and interest. This amount was calculated based on estimates of the delinquency.

4. A Notice of Final Assessment dated August 28, 2006, was issued by the Department to the Petitioner that outlined the amounts claimed to be owed. On or about September 27, 2006, the Petitioner responded to the notice and, under oath, represented

   that the tax returns were filed. The Department took the Petitioner’s representations into consideration and re-calculated the tax liability owed by the Petitioner. Currently, the Department asserts that the Petitioner’s delinquent amount is

   $278.46.

5. Accordingly, when that amount remained unpaid, the Department sought a tax warrant, gave notice of its intent to levy on the assets of the Petitioner, and provided notice that it intended to collect monies against the Petitioner’s bank account at Regent Bank.

6. The Department issued a Notice of Freeze to the Regent Bank that instructed it not to transfer, dispose of, or return assets belonging to the Petitioner.

7. The Department also gave notice to the Petitioner of its intent to levy on the bank account with a formal Notice of Intent to Levy.

8. The Petitioner challenged the notice by seeking an administrative hearing.

9. The Petitioner did not appear at the hearing and did not offer any evidence in support of its challenge.

10. The Petitioner’s letter dated September 28, 2006, was not submitted within twenty days of the issuance of the Notice of Final Assessment.

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings. §§ 120.57(1), and 213.67, Fla. Stat. (2006).

12. Section 213.67, Florida Statutes (2006), provides:

    
    

    213.67 Garnishment.--

    1. If a person is delinquent in the payment of any taxes, penalties, and interest owed to the department, the executive director or his or her designee may give notice of the amount of such delinquency by registered mail to all persons having in their possession or under their control any credits or personal property, exclusive of wages, belonging to the delinquent taxpayer, or owing any debts to such delinquent taxpayer at the time of receipt by them of such notice. Thereafter, any person who has been notified may not transfer or make any other disposition of such credits, other personal property, or debts until the executive director or his or her designee consents to a transfer or disposition or until 60 days after the receipt of such notice, except that the credits, other personal property, or debts which exceed the delinquent amount stipulated in the notice shall not be subject to the provisions of this section, wherever held, in any case in which the taxpayer does not have a prior history of tax delinquencies. If during the effective period of the notice to withhold, any person so notified makes any transfer or disposition of the property or debts required to be withheld hereunder, he or she is liable to the state for any indebtedness owed to the department by the person with respect to whose obligation the notice was given to the extent of the value of the property or the amount of the debts thus transferred or paid if, solely by reason of such transfer or disposition, the state is unable to recover the indebtedness of the person with respect to whose obligation the notice was given. If the delinquent taxpayer contests the intended levy in circuit court

       or under chapter 120, the notice under this section remains effective until that final resolution of the contest. Any financial institution receiving such notice will maintain a right of setoff for any transaction involving a debit card occurring on or before the date of receipt of such notice.

    2. All persons who have been notified must, within 5 days after receipt of the notice, advise the executive director or his or her designee of the credits, other personal property, or debts in their possession, under their control, or owing them, and must advise the executive director or designee within 5 days after coming into possession or control of any subsequent credits, personal property, or debts owed during the time prescribed by the notice. Any such person coming into possession or control of such subsequent credits, personal property, or debts may not transfer or dispose of them during the time prescribed by the notice or before the department consents to a transfer.

    3. During the last 30 days of the 60-day period set forth in subsection (1), the executive director or his or her designee may levy upon such credits, other personal property, or debts. The levy must be accomplished by delivery of a notice of levy by registered mail, upon receipt of which the person possessing the credits, other personal property, or debts shall transfer them to the department or pay to the department the amount owed to the delinquent taxpayer.

    4. A notice that is delivered under this section is effective at the time of delivery against all credits, other personal property, or debts of the delinquent taxpayer which are not at the time of such notice subject to an attachment, garnishment, or execution issued through a judicial process.

    5. Any person acting in accordance with the terms of the notice or levy issued by the executive director or his or her designee is expressly discharged from any obligation or liability to the delinquent taxpayer with respect to such credits, other personal property, or debts of the delinquent taxpayer

    affected by compliance with the notice of freeze or levy.

    (6)(a) Levy may be made under subsection (3) upon credits, other personal property, or debt of any person with respect to any unpaid tax, penalties, and interest only after the executive director or his or her designee has notified such person in writing of the intention to make such levy.

    1. No less than 30 days before the day of the levy, the notice of intent to levy required under paragraph (a) shall be given in person or sent by certified or registered mail to the person's last known address.

    2. The notice required in paragraph (a) must include a brief statement that sets forth in simple and nontechnical terms:

    1. The provisions of this section relating to levy and sale of property;

    2. The procedures applicable to the levy under this section;

    3. The administrative and judicial appeals available to the taxpayer with respect to such levy and sale, and the procedures relating to such appeals; and

    4. The alternatives, if any, available to taxpayers which could prevent levy on the property.

    1. A taxpayer may contest the notice of intent to levy provided for under subsection (6) by filing an action in circuit court. Alternatively, the taxpayer may file a petition under the applicable provisions of chapter 120. After an action has been initiated under chapter 120 to contest the notice of intent to levy, an action relating to the same levy may not be filed by the taxpayer in circuit court, and judicial review is exclusively limited to appellate review pursuant to s. 120.68. Also, after an action has been initiated in circuit court, an action may not be brought under chapter 120.

    2. An action may not be brought to contest a notice of intent to levy under chapter 120 or in circuit court, later than 21 days after the date of receipt of the notice of intent to levy.

    3. The department shall provide notice to the Chief Financial Officer, in electronic or

       other form specified by the Chief Financial Officer, listing the taxpayers for which tax warrants are outstanding. Pursuant to subsection (1), the Chief Financial Officer shall, upon notice from the department, withhold all payments to any person or business, as defined in s. 212.02, which provides commodities or services to the state, leases real property to the state, or constructs a public building or public work for the state. The department may levy upon the withheld payments in accordance with subsection (3). The provisions of s. 215.422 do not apply from the date the notice is filed with the Chief Financial Officer until the date the department notifies the Chief Financial Officer of its consent to make payment to the person or 60 days after receipt of the department's notice in accordance with subsection (1), whichever occurs earlier.

    4. The department may bring an action in circuit court for an order compelling compliance with any notice issued under this section. (Emphasis Added.)

    
    

13. In this matter, there is no evidence that the Petitioner timely challenged the underlying Final Notice of Assessment that established the delinquent sales and use tax amounts. Additionally, the letter dated January 16, 2007, that was treated as a request for an administrative hearing in this cause was executed more than 21 days after the Notice of Intent to Levy was filed.

14. The Notice of Final Assessment is, therefore, presumed to be accurate as to the delinquent amounts. As to the challenge to the Department’s ability to levy against the Regent Bank account, the Petitioner offered no evidence to establish that the levy was improperly sought. To the contrary, the Department has

    presented credible, substantial evidence that the delinquent amount is owed. The Department has proved that the Petitioner was provided notice of the intent to levy against its assets at Regent Bank. And the Department has shown that the tax liability remains unpaid. By any standard or burden of proof, while not conceding it bore such burden, the Respondent has shown it is entitled to the levy sought. See Department of Banking and Finance, Division of Securities and Investor Protection v.

    Osborne Stern and Company, 670 So. 2d 932 (Fla. 1996); and Florida Department of Transportation v. J.W.C. Company, Inc., 396 So. 2d 778 (Fla. 1st DCA 1981).

15. It is concluded that the Department has complied with its statutory responsibilities as elaborated in Florida Administrative Code Rule 12-21, such that the tax warrant, levy and seizure of the Petitioner’s assets at Regent Bank should be upheld.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a Final Order sustaining the Notice of Intent to Levy against the Petitioner’s assets in the amount of $278.46 to satisfy the liability owed by the Petitioner to the Department.

DONE AND ENTERED this 2nd day of May, 2007, in Tallahassee, Leon County, Florida.

S

J. D. Parrish Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 2nd day of May, 2007.

COPIES FURNISHED:

S. G. Ross

Business Depot-Accounting & Tax Center, Inc.

4611 South University Drive, Suite 455

Davie, Florida 33328

John Mika, Esquire Assistant Attorney General

Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050

Bruce Hoffmann, General Counsel Department of Revenue

501 South Calhoun Street

The Carlton Building, Room 204 Tallahassee, Florida 32399-0100

James Zingale, Executive Director Department of Revenue

501 South Calhoun Street

The Carlton Building, Room 104 Tallahassee, Florida 32399-0100

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.

Docket for Case No: 07-000467

Orders for Case No: 07-000467