STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF REVENUE,

vs.

Petitioner,

Case No. 15-4710

WORLD CHAMPIONS AUTO, INC.,

Respondent.

/

RECOMMENDED ORDER

This case was heard on January 27, 2016, by video teleconferencing at sites in Tallahassee and Fort Myers, Florida, before D. R. Alexander, the assigned Administrative Law Judge of the Division of Administrative Hearings (DOAH).

APPEARANCES

For Petitioner: Stephen M. Masterson, Esquire

Office of the Attorney General Revenue Litigation Bureau

The Capitol, PL-01

Tallahassee, Florida 32399-1050 For Respondent: No appearance

STATEMENT OF THE ISSUE

The issue is whether Respondent's Certificate of Registration 46-8015920490-4 should be revoked for the reasons stated in an Administrative Complaint for Revocation of Certificate of Registration (Administrative Complaint) issued by the Department of Revenue (Department) on July 17, 2015.

PRELIMINARY STATEMENT

The Administrative Complaint proposes to revoke Respondent's Certificate of Registration for violating a Revised Compliance Agreement (Agreement) executed by the taxpayer on April 23, 2015. Respondent timely requested a hearing, and the matter was transmitted by the Department to DOAH to conduct a formal hearing.

At the final hearing, the Department presented the testimony of one witness. Department Exhibits 1-19 were accepted in evidence. Respondent did not appear at the hearing.

A Transcript of the hearing has been prepared. The Department filed a proposed recommended order, which has been considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. The Department is the state agency charged with administering and enforcing the state revenue laws, including the laws related to the imposition and collection of sales and use taxes pursuant to chapter 212.

2. Respondent is an active for-profit Florida corporation and a licensed motor vehicle dealer located at 613 Southwest Pine Island Road, Suite 14, Cape Coral, Florida. For purposes of collecting and remitting taxes, Respondent is a dealer as defined in section 212.06(2) and is required to comply with

   
   

   chapter 212. Annais German is the president and agent of the corporation.

3. Respondent holds Certificate of Registration number 46- 8015920490-4. A certificate of registration is required in order to do business in the state and requires its holder to collect and remit sales tax pursuant to chapter 212. See

   § 212.05(1), Fla. Stat.

   
   

4. A dealer must file with the Department sales tax returns and remit the tax collected on a monthly basis. See

   § 212.15(1), Fla. Stat.

   
   

5. The Department is authorized to revoke a dealer's certificate of registration for failure to comply with state tax laws. See § 212.18(3)(e), Fla. Stat.

6. Before revoking a certificate of registration, the Department must convene an informal conference that the dealer is required to attend. See § 213.692(1)(a), Fla. Stat. At the

   conference, the dealer may either present evidence to refute the Department's allegations of noncompliance or enter into a compliance agreement with the Department to resolve the dealer's failure to comply with chapter 212. Id. After a compliance agreement is executed by the dealer, the Department may revoke the certificate of registration if the dealer fails to comply with its terms and conditions. If a breach occurs, the entire amount is due and payable immediately.

   
   

7. After Respondent failed to remit taxes that were due, the Department issued tax warrants and rendered judgment liens against Respondent in March, April, and December 2014 and April 2015.

8. An informal conference was conducted with the taxpayer on April 7, 2015. Respondent was represented at the conference by Orlando German, who was given power of attorney by Annais German to represent the corporation. He signed an agreement, which required the entire balance to be paid by the end of the month. Two weeks later, Annais German requested that a new agreement be executed which allowed her to pay the delinquent taxes over a longer period of time. The Department agreed with her request.

9. On April 23, 2015, Ms. German executed an Agreement reflecting that her corporation owes $7,297.52. See Pet'r

   Ex. 2, p. 1. The Agreement required Respondent to make a down payment of $2,500.00 on or before April 28, 2015, followed by ten monthly payments of 375.00 on the 28th of each month, and a final payment of $671.52 on April 28, 2016. Id. at p. 3. The

   Agreement required these payments to be made at the Fort Myers Service Center. Id. Payments required under a compliance

   agreement are always remitted to the local district office, rather than Tallahassee, to allow the Department to track the payment and ensure that it is being made in a timely fashion.

   
   

10. The Agreement also required Respondent to "timely remit payment in full for all types of taxes, returns, and reports due from the Taxpayer for the duration of this agreement (and any extensions hereof) or for the next 12 months following the date of this agreement, whichever is longer." Id. at p. 1.

    In other words, besides making payments for past due taxes, interest, penalties, and fees, Respondent was required to timely file returns and pay current obligations as they became due during the life of the Agreement. The Agreement specifically provides that if the taxpayer fails to comply with the Agreement, revocation proceedings will be initiated without further notice.

11. Respondent paid the $2,500.00 down payment one day late, but as of the date of the hearing in this case, no other payments for past or current obligations have been made.

12. Returns for April and May 2015 were not timely filed.

    
    

    Respondent admits that in April 2015, at least three vehicles were sold, but its April return, when eventually filed, reported that no sales were made. Since filing its June and July 2015 returns, Respondent has filed no other returns.

13. By failing to pay the monthly obligations required by the Agreement or any current obligations, Respondent has violated the Agreement.

    
    

    CONCLUSIONS OF LAW

    
    

14. The Department has the burden of proving by clear and convincing evidence the allegations in the Administrative Complaint on which the Department relies to seek revocation of Respondent's Certificate of Registration. See Dep't of Banking

    & Fin. v. Osborne Stern & Co., 670 So. 2d 932, 935 (Fla. 1996).

    
    

15. A compliance agreement is a statutorily-controlled agreement between the Department and the non-compliant dealer. In return for the Department's agreement to stay its revocation proceeding, the dealer agrees to remit the state tax monies collected from customers which the dealer converted to its own use, and to comply with Florida law going forward--both of which are legal obligations of the dealer regardless of whether a compliance agreement is executed. See Fla. Dep't of Rev. v.

    PNC, LLC, Case No. 14-2538, 2015 Fla. Div. Adm. Hear. LEXIS 29 at *4 (Fla. DOAH Nov. 3, 2014; Fla. DOR Jan. 23, 2015). If a

    dealer fails to comply with the terms of a compliance agreement, the Department is required to issue an administrative complaint. Id. See also § 212.18(3)(e), Fla. Stat. (the Department shall

    issue an administrative complaint if the dealer fails to comply with the executed compliance agreement).

16. Section 212.18(3) provides that the Department may proceed to revoke a certificate after conducting a conference with a dealer and offering the dealer an opportunity to provide

additional information or resolve the dispute through a compliance agreement. Here, a conference was held, and the parties agreed to resolve the matter through the execution of a compliance agreement. By clear and convincing evidence, the Department has established that Respondent failed to comply with the terms of the Agreement. Therefore, the facts support the Department's revocation of Respondent's Certificate of Registration.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that the Department of Revenue enter a final order revoking Respondent's Certificate of Registration 46- 8015920490-4.

DONE AND ENTERED this 25th day of February, 2016 in Tallahassee, Leon County, Florida.

S

D. R. ALEXANDER Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

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

Filed with the Clerk of the Division of Administrative Hearings this 25th day of February, 2016.

COPIES FURNISHED:

Stephen M. Masterson, Esquire Office of the Attorney General Revenue Litigation Bureau

The Capitol, PL-01

Tallahassee, Florida 32399-1050 (eServed)

Annais German

World Champions Auto, Inc.

429 Northwest 38th Place

Cape Coral, Florida 33993-5536

Annais German

World Champions Auto, Inc.

613 Southwest Pine Island Road, Suite 14 Cape Coral, Florida 33991-1950

George C. Hamm, Acting General Counsel Department of Revenue

Post Office Box 6668 Tallahassee, Florida 32314-6668 (eServed)

Marshall C. Stranburg, Executive Director Department of Revenue

Post Office Box 6668 Tallahassee, Florida 32314-6668 (eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days of the date of this Recommended Order of Dismissal. Any exceptions to this Recommended Order of Dismissal should be filed with the agency that will render a final order in this matter.

Docket for Case No: 15-004710

Orders for Case No: 15-004710