Findings Of Fact On September 13, 1985, respondent, Bernard Gross, was found in contempt of the Circuit Court in and for Dade County, Florida, for failing to comply with previous orders of the court to provide child support. According to the order rendered by the court, Gross was in arrears in the amount of $4,650 as of September 4, 1985. A copy of the order has been received into evidence as petitioner's exhibit 2. By letter dated October 24, 1985 petitioner, Department of Health and Rehabilitative Services (HRS), through its contractor, the Office of the State Attorney, advised Gross that it intended to intercept his federal income tax refund, if any, to satisfy the past-due child support. According to the letter, the past due amount was then $4,425. Gross was further advised he could request an administrative hearing to contest this action no later than November 25, 1985. However, the agency's letter was not postmarked until November 26, 1985, or after the point of entry had expired, and was not received by Gross until December 6, 1985. The letter further erroneously identified the amount due as an "AFDC" claim, which meant the person due the support payments was receiving assistance under the federal Aid to Families with Dependent Children program. This was incorrect. Gross was given an informal meeting with HRS personnel on January 29, 1986, for an undisclosed purpose. However, later HRS correspondence implies it was for the purpose of allowing Gross to attempt to get HRS to reconsider its earlier decision to intercept his income tax refund. When this effort was apparently unsuccessful, HRS, through its contractor, issued a Notice of Right to Hearing in Non-AFDC Cases on March 3, 1986, offering Gross an opportunity for a formal hearing. The notice made reference to the earlier court order dated September 13, 1985, and stated the arrearage due was greater than $500, the support was owed to or on behalf of a minor child, and it was more than three months past due. Gross thereafter timely requested a formal hearing. The clerk of the Circuit Court in and for Dade County maintains a central depository which has an account history for each person paying child and spousal support. According to the computer printout on Gross' account, Gross owed $4,650 as of September 4, 1985, but it decreased to $4,255 as of December 25, 1985. The amount is subject to change each week since the printout indicates Gross must pay $85 per week in child support. The printout has been received into evidence as petitioner's exhibit 1. Gross did not challenge or contest the accuracy of the numbers contained in the document. At final hearing petitioner ore tenus amended its request to claim only $4,255. That amount is the last amount shown on Gross' payment record, and is the balance due as of December 25, 1985. This date was selected by petitioner's counsel since it represents the most current data on respondent's account. Gross' former wife confirmed that Gross owed her more than $4,000 as of the end of 1985, but could not state the precise amount owed. Federal regulations (45 CFR 303.72) govern the conditions under which a federal income tax refund may be intercepted in a non-AFDC case to offset past- due support owed by the taxpayer. As is pertinent here, they require that the taxpayer owe support to or on behalf of a minor child and that it be not less than $500. Regulations also require that the agency substantiate the delinquent amount with a copy of the "court order, or an order of an administrative process established under State law, for support and maintenance of a child, or of a child and the parent with whom the child is living," "a copy of the payment record," or if no payment record exists, "an affidavit signed by the custodial parent attesting to the amount of support owed." In this regard, petitioner tendered into evidence a copy of the September 13, 1985 court order, a certified copy of the clerk of the circuit court's payment record, and offered the testimony of Gross' former wife, the latter in an effort to establish the amount owed her as of the end of 1985. Through his own testimony, and the submission of respondent's composite exhibit 1, Gross contended that various errors occurred in the administrative process that culminated in the final hearing. First, he cited the agency's failure to send its October 24, 1985 letter until November 26, or after the original point of entry had expired. He also pointed out that this notice was dated only fifty days after the court order, and that a minimum of ninety days is required by law. He further contended he had no opportunity prior to hearing to question the amount of past-due support allegedly owed. Finally, he pointed out that the court order of September 13 refers to an arrearage of $4,650, the proposed agency action on March 3 relies upon an arrearage of $4,450, and at hearing petitioner claimed the past due amount was $4,255. He did not deny that he owed the above amounts, but contended the agency was bound to seek only the amount shown in the court order, and by later changing the amount allegedly due, HRS has invalidated its claim.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a Final Order be entered certifying a claim to the Secretary of the Treasury in the amount of $4,255 against respondent's federal income tax refund, if any. DONE and ORDERED this 23rd day of October 1986 in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 23rd day of October 1986.
The Issue The issue is whether Petitioner collected and remitted to Respondent the correct amount of sales and use taxes during the audit period from October 1, 2004, through September 30, 2007, and, if not, what additional amount of tax plus penalty and interest is due.
Findings Of Fact Petitioner True Blue Pools (Petitioner, taxpayer, or TBP) is a domestic corporation headquartered in Miami-Dade County, Florida. TBP services, repairs, and renovates swimming pools and constructed some pools during the audit period. Respondent, Florida Department of Revenue (Respondent or DOR), is the agency of state government authorized to administer the tax laws of the State of Florida, pursuant to section 213.05, Florida Statutes.2 DOR is authorized to prescribe the records to be kept by all persons subject to taxes under chapter 212, Florida Statutes. Such persons have a duty to keep and preserve their records, and the records shall be open to examination by DOR or its authorized agents at all reasonable hours pursuant to section 212.12(6), Florida Statutes. DOR is authorized to conduct audits of taxpayers and to request information to ascertain their tax liability, if any, pursuant to section 213.34, Florida Statutes. On November 2, 2007, DOR initiated an audit of TBP to determine whether it was properly collecting and remitting sales and use taxes to DOR. The audit period was from October 1, 2004, through September 30, 2007. On December 15, 2008, DOR sent TBP its Notice of Intent to Make Audit Changes (NOI), with schedules, showing that TBP owed to DOR additional sales and use taxes in the amount of $113,632.17, penalty in the amount of $28,406.05, and interest through December 16, 2008, in the amount of $34,546.59, making a total assessment in the amount of $176,586.81. On October 26, 2009, DOR issued its Notice of Proposed Assessment. TBP timely challenged the Notice of Proposed Assessment, filing its petition with DOR and requesting an administrative hearing. Subsequent to the petition being filed, additional documentation was provided by TBP resulting in a revision to the tax, interest, and penalty amount due. DOR's revised work papers, dated May 27, 2010, claim Petitioner owes $64,430.83 in tax, $16,107.71 in penalty, and interest through May 27, 2010, in the amount of $27,071.99, with an assessment of $107,610.53. The assessed penalty, $16,107.71, was calculated after 25% of the penalty was waived, pursuant to subsection 213.21(3)(a), Florida Statutes, based on DOR's determination that there is no evidence of willful negligence, willful neglect, or fraud. The audit was conducted to determine liability in four categories: improper sales tax exemptions, unpaid sales taxes for taxable expenses, unpaid use taxes on fixed assets, and unpaid use taxes on taxable materials used to fulfill contracts to improve real property. Sales Tax Exemptions Due to the large volume of invoices and other records, the auditor conducted a random sampling of invoices for three months during the audit period, October 2004, January 2005, and September 2007.3 If no sales tax was collected and the Petitioner claimed that the transaction was exempt from the requirement to pay taxes, the auditor looked for proof that either the TBP customer was an exempt organization, for example, a school or a church, or that TBP had provided its suppliers with a DOR Form DR-13 to exempt from taxes products acquired for resale. In the absence proof of either type of exemption, DOR assumed taxes should have been paid. Using the difference between taxes collected and taxes due for the three months, the auditor determined that the percentage of error was .016521. When .016521 was applied to total sales of $1,485,890.79 for the 36-month audit period, the results showed that an additional $24,548.41 in sales taxes should have been collected from customers, and is due from TBP. Although a business is required to pay taxes for the materials it purchases to use in its business, it is not required to collect taxes from its customers when it enters into lump sum contracts to perform a service for customers. At least one invoice for $9,500.00 that the auditor treated as an improper exemption was, in fact, a partial payment on a lump-sum contract. The invoice referenced a "shotcrete draw," which represented the collection of funds after the concrete part of pool construction was completed. TBP is not required to collect taxes when it uses lump-sum contracts. Other invoices for pool repair and services were also mischaracterized as exempt by the TBP, but it is not clear that all were payments related to lump-sum contracts. DOR's auditor, nevertheless, testified as follows: With the knowledge that I have for True Blue Pools, being a lump-sum contractor, True Blue Pools should not charge their customer any sales tax. Transcript at pages 67-68. DOR concedes that some of TBP's transactions are also exempt from taxes as improvements to real property. In its Proposed Recommended Order, DOR asserted that TBP's use of the term "improvements to real property" is overbroad, but it did not specify how or why this is the case. During cross- examination of the owner of TBP, only one invoice for $500.00 for leak detection on the Delgado property was shown to have been for a service rather than for swimming pool construction. Taxable Expenses DOR audited TBP's purchases of tangible personal property used in the daily operation of its business. The products included chlorine and other chemicals, office supplies, and vehicle parts, expenses, and repairs. The ledger for a 12- month period, calendar year 2006, showed an average monthly additional tax due of $111.18, or a total of $4,002.48 in additional taxes for the 36-month audit period. As noted in Petitioner's Proposed Recommended Order, "[t]he representative of TBP did not dispute DOR's allegation that no tax may have been paid on the purchase of all of these items " Fixed Assets TBP's list of fixed assets was taken from the depreciation schedule on Internal Revenue Service Form 4562. The items listed are computer- and software-related. TBP provided no proof that it had paid a use tax. The additional tax due equals $419.94. Petitioner's Proposed Recommended Order includes the statement that "[a]gain, the representative of TBP did not dispute DOR's allegation that no tax may have been paid on the purchase of these items " Taxable Materials Taxable materials, those purchased to fulfill a contract to improve real property, included items used to build, renovate, and repair pools. The items included concrete, meters, drains, and valves. For the 12-month sample period, calendar year 2006, TBP failed to pay taxes on material purchases in the total amount of $168,310.05, or an average of $14,078.96 a month. For the 36-month audit period, the total of the purchases was $506,842.56. With a 6 percent tax due for the state and 1 percent for the county, the total additional tax due on materials is $35,460.00. TBP conceded that it improperly used a resale exemption to purchase taxable materials from suppliers without paying taxes. The materials were used to provide services and were not resold. Acknowledging again that TBP uses lump-sum contracts, this time to support the collection of additional taxes, the auditor testified as follows: And the law states that the taxpayer's [sic] an ultimate consumer of all materials purchased to fulfill a lump-sum contract, and that's what they told me they operate under, a lump-sum contract. Transcript at page 58. At the hearing, TBP used its actual profit and loss statement to show that the cost of goods it sold (general purchases and taxable materials) in the amounts of $18,360.77 in October 2004, $8,519.22 in January 2005, and $4,818.65 in September 2007. Corresponding taxes for each of those months should have been $1,285.25, $596.35, and $337.31, or an average of $739.63 a month, or a total of $26,626.68 for 36 months. The goods that it sold were not at issue in the audit of taxable materials, rather it was TBP's purchases from vendors that should have been taxed that resulted in DOR's audit results. Total Additional Sales and Use Taxes Due The three categories of additional taxes due, $4,002.48 for taxable expenses, $419.94 for fixed assets, and $35,460.00 for taxable materials, equal $39,882.42 in additional taxes due during the audit period. Taxes Paid TBP filed DOR Forms DR-15, monthly sales and use tax reporting forms, and paid sales and use taxes during the audit period. For the sample months used by DOR to examine sales tax exemptions, TBP paid $1,839.10 in taxes in October 2004, $1,672.73 in January 2005, and $1,418.13 in September 2007. Using the three months to calculate an average, extended to 36 months, it is likely that TBP paid $59,712 in taxes. TBP asserted that DOR was required to, but did not, offset the deficiency of $39,882.42, by what appears to be an overpayment of $59,712.00 in sales and use taxes. Other than pointing out that the amount reported on the DR-15s differed, being sometimes more and sometimes less than the amount shown on the profit and loss statements, DOR did not dispute TBP's claim that it had paid sales and use taxes. TBP's representative explained that end-of-the-year adjustments for additional collections or for bad debt could cause the amounts on the DR-15s and profit and loss statements to differ. With regard to the taxes paid, DOR took the following position in its Proposed Recommended Order: Petitioner's DR-15's [sic] for the collection periods October 2004, and January 2005, [and September 2007] (Petitioner's Composite Exhibit 1) do reflect sales tax being collected and remitted to DOR. DOR does not allege that Petitioner never paid tax on its purchases, or made bona fide exempt sales for which no tax was collected. DOR's audit findings identify just those which occurred within the sample period, scheduled in the auditor's workpapers, and applied over the entire audit period. The DR-15s are taken from the sample months selected by DOR within the audit period, and DOR does not address TBP's claim that a set off for taxes paid was mandatory, pursuant to subsection 213.34(4), Florida Statutes. Using the audit schedules, DOR showed credit for taxes paid in the amounts of $20.63 for taxable expenses, $0 for fixed assets, and $24.31 in state taxes and $1.03 for county taxes on taxable materials. The amounts are far less that the $59,712.00 in sales/use taxes TBP showed that it paid during the audit period.
Recommendation Based upon the forgoing findings of fact and conclusions of law, it is recommended that the Department of Revenue issue a final order dismissing the Notice of Intent to Make Audit Changes dated December 15, 2010. DONE AND ENTERED this 20th day of January, 2011, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER 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 20th day of January, 2011.
The Issue The issue in this proceeding is whether the Department of Revenue's denial of a refund of intangible tax should be upheld.
Findings Of Fact Petitioner, First Alachua Banking Corporation, is a Florida corporation engaged in the business of banking. On February 25, 2000, Petitioner filed a Florida intangible personal property tax return in which it reported intangible assets in Florida worth $42,829,500.64. Petitioner paid intangible tax in the amount of $61,617.47. Due to a change in the law, banks became exempt from intangible tax effective for taxes due on or after July 1, 1999.2/ On June 23, 2003, Petitioner filed an application for refund with the Department requesting a refund of intangible tax in the amount of $46,576.98. The reason given on the application for refund is "taxpayer exempt under Fla statute," citing Subsection 199.185(5), Florida Statutes. The application for refund was prepared by Mr. Bevis. Petitioner filed four applications for refund for the years 2000 through 2003. The Department issued refunds to Petitioner for 2001, 2002, and 2003. However, on July 7, 2003, the Department issued a Notice of Intent to Make Tax Refund Claim Changes showing a proposed refund due of $0 for 2000. The explanation given by Linda Lyles, Refund Auditor, is as follows: EXPLANATION: I am denying your refund request for the following reason: Your refund has exceeded the 3 year statute of limitations per s. 215.26(2) Florida Statutes. Tax paid on or after October 1, 1994, but before July 1, 1999 has a five year limit, for tax paid after July 1999, the limit is 3 years from the date paid. Additionally r 12C-2.012(b) F.A.C. states, 'Form DR-26, Application for Refund, must be filed with the Department for tax paid on or after July 1, 1999 within 3 years after the date the tax was paid.' Your 2000 tax was paid on February 25, 2000, therefore your refund application should have been submitted by February 25, 2003. It was postmarked June 19, 2003. On July 21, 2003, Mr. Stevens wrote to Ms. Lyles requesting an informal conference, citing Subsection 215.26(5), Florida Statutes, and giving the following reasons why the return was not prepared correctly: Our client intends to demonstrate reasonable cause for failure to prepare the return correctly, detect such error, and timely file the refund request within the three-year statutory period. The principal reasons for failure to comply with the time limitations and conditions for a timely refund request were that: The Company's assistant secretary has prepared the intangible return for a number of years using the instructions provided in the intangible return package. He was unaware of the changes in statutes eliminating a Florida intangible return on bank assets. Furthermore, the intangible return instructions for the year 2000 were silent with respect to this change in tax law. The Company has engaged a certified public accounting firm to prepare their income tax returns and relies on this firm to provide relevant and timely information on bank income and other tax issues. This firm failed to notify the Company of the change in intangible personal property tax laws. In 2002, a Florida Department of Revenue audit was conducted in which the auditor obtained and reviewed copies of the intangible personal property tax return for January 1, 2000. The auditor should have known that banking assets were not subject to intangible tax and failed to advise the Company. We have enclosed a copy of the DR-840 for your convenience. The intervening audit referenced in Petitioner's letter of June 21, 2003, was a corporate income tax audit. In the Notification of Intent to Audit Book and Records, the auditor requested that Petitioner make its intangible tax return and intangible personal property records available for audit to determine whether Petitioner properly took a credit on its corporate income tax return for intangible tax paid in 1999. However, in accordance with the general practice of the Department, the auditor who conducted the corporate income tax audit did not audit Petitioner's intangible tax return. The Notification of Intent to Audit Book and Records identified the tax to be audited as Corporate Income Tax pursuant to Chapter 220, Florida Statutes. If an auditor determines during an audit that an examination of another tax is necessary, it is the policy of the Department that the auditor inform the taxpayer, add that tax to the Notification of Intent to Audit Book and Records, initial that change, and request the taxpayer to initial the addition. There is no indication in the audit file that any other tax was audited other than corporate income tax. On July 25, 2003, the Department issued a Notice of Proposed Refund Denial regarding Petitioner's request for the 2000 intangible tax refund. On January 5, 2004, the Department issued a Notice of Decision of Refund Denial sustaining its earlier proposed decision to deny the refund request because the request was filed outside the three-year statute of limitations referenced in Subsection 215.26(2), Florida Statutes.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Revenue enter a final order denying Petitioner's request for a refund of intangible taxes. DONE AND ENTERED this 9th day of July, 2004, in Tallahassee, Leon County, Florida. S BARBARA J. STAROS 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 9th day of July, 2004.
The Issue Whether Respondent, Neighborhood Grill, Inc., d/b/a Neighborhood Sports Grill (Respondent), failed to remit monies owed to Petitioner, Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco (the Department) pursuant to the surcharge provisions found in Section 561.501, Florida Statutes (2006). If so, whether the Department should impose discipline against Respondent for that failure.
Findings Of Fact At all times material to the allegations of this case, the Department has been the state agency charged with the responsibility of regulating persons holding alcoholic beverage licenses. At all times material to the allegations of this matter Respondent has held license number 60-13254, series 4-COP., which was duly issued Respondent by the Department. At all times material to the allegations of this matter, Respondent was obligated to pay monthly surcharge taxes to the Department pursuant to the provisions of Section 561.501, Florida Statutes (2006). Respondent elected to have these surcharge taxes based on the "purchase method," i.e., based on the volume of alcohol Respondent purchased from its suppliers during the month.2 The Department routinely audits licensees to compare the surcharge taxes remitted by the licensee with the records maintained by the licensee’s suppliers and/or by the licensee. The purpose of the audit is to verify that surcharge tax paid by a licensee was based on a correct calculation of its surcharge tax obligation. In this case, the Department audited Respondent for the subject audit period of October 1, 2006, through June 30, 2007. Mr. Marrero began the subject audit by issuing an engagement letter to Respondent that included a questionnaire. In addition to other information, the questionnaire requested Respondent to identify its beverage suppliers. Respondent did not respond to the engagement letter or to the questionnaire. Based on records available to him, including information as to Respondent’s beverage suppliers gathered during prior audits, Mr. Marrero was able to identify Respondent’s major beverage suppliers. Consistent with the Department’s policies, Mr. Marrero contacted Respondent’s beverage suppliers to obtain records of all sales of alcoholic beverages those suppliers had made to Respondent during the subject audit period. Those beverage suppliers then provided their records to establish the beverages sold to Respondent during the subject audit period. Based upon those records Mr. Marrero determined the volume of alcoholic beverages purchased by Respondent during the subject audit period and calculated the surcharge tax due and owing to the Department for the subject audit period. Mr. Marrero compared the amount of the surcharge tax he calculated with the surcharge tax paid by Respondent to the Department for the subject audit period. Based upon that comparison, Mr. Marrero determined that Respondent had failed to remit the correct surcharge taxes payment based on underpayment, non-payment, and late payment. More specifically, Mr. Marrero calculated that the Respondent owed the Department additional surcharge tax in the principal amount of $6,265.06; surcharge interest in the amount of $589.93; and surcharge penalties in the amount of $3,467.05. Mr. Marrero determined that Respondent owed the Department the total amount of $10,322.04. Mr. Torres reviewed the audit prepared by Mr. Marrero and verified its accuracy. Mr. Marrero and Mr. Torres have the requisite education, training, and experience to conduct the subject audit (in the case of Mr. Marrero) and to review the subject audit to verify its accuracy (in the case of Mr. Torres). The subject audit accurately reflects the amounts Respondent owes the Department. On May 5, 2008, the Department provided Respondent a copy of its audit summary and demanded payment of the amounts due. Respondent has not paid any portion of the total sum ($10,322.04) identified as being due by the audit summary.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco, enter a Final Order providing that the Respondent owes it surcharge taxes in the principal amount of $6,265.06, surcharge interest in the amount of $589.93, and surcharge penalties in the amount of $3,467.05, for a total amount of $10,322.04. The Final Order should give the Respondent a period of 30 days to remit the full amount $10,322.04 or make acceptable arrangements for the payment. The Final Order should revoke Respondent’s license if Respondent fails to timely remit the full amount due or make acceptable arrangements for such payment. DONE AND ENTERED this 5th day of June, 2009, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 5th day of June, 2009.
Findings Of Fact In 1972 Petitioner received $743,982 of income from state and municipal bonds. On its federal income tax return the Petitioner allocated $471,229 of this amount to the policyholders' share as required by law and $272,753 to the company's share (Phase I). The Phase II figures were $359,669 and $384,313 respectively. Respondent has added back the entire $743,982 for purposes of computing Petitioner's Florida taxable income. Petitioner added back the $272,753 (Phase I) and $384,313 (Phase II). For 1972 Petitioner accrued $350,000 of Florida taxes on its federal income tax return. In computing its deductions on its federal income tax return 36.6612 percent of this amount was deducted in the Phase I computation and 51.6564 percent in the Phase II computation. Respondent has added back all of the Florida tax accrued in computing the Florida income tax owed by Petitioner. Petitioner's position is that only the company's percentages were deductible and only these amounts should be added back. The amount of additional Florida income tax assessment proposed for 1972 by the Respondent over that paid by Petitioner is $21,234. In 1973 Petitioner received $552,408 of income from state and municipal bonds. On its federal income tax return Petitioner allocated $335,662 of this amount to policyholders' share as required by law and $216,786 to the company's share (Phase I). The Phase II figures were $248,789 and $303,619 respectively. Respondent has added back the entire $552,408 for purposes of computing Petitioner's taxable income. Petitioner added back the $216,786 (Phase I) and $303,619 (Phase II). For 1973 Petitioner accrued $475,000 of Florida taxes on its federal income tax return. In computing its deductions on its federal income tax return 39.2438 percent of this amount was deductible in Phase I and 54.9628 percent in Phase II. Respondent has added back all of the Florida tax accrued. Petitioner's position is that only the company's percentages were deductible and only these amounts should be added back. The amount of additional Florida income tax assessment proposed for 1973 by Respondent was $20,184. It was further stipulated that the sole issues here involved are: The computation of the amount of tax exempt interest which is excludable from taxable income under section 103(a) Internal Revenue Code for purposes of the Florida corporate income tax; and The computation of the amount of Florida income tax accrued which is deductible for purposes of federal income tax and added back for purposes of computing the Florida income tax.
The Issue Whether Respondent is subject to a civil penalty for alleged violation of Section 400.424(3)(a), Florida Statutes, and Rule 58A-5, Florida Administrative Code, through failure to provide a timely prorated refund following the death of a resident of Respondent’s facility.
Findings Of Fact Petitioner is the agency responsible for the licensing and regulation of assisted living facilities, and, in this case, specifically “Holly Hill Care Center” in Holly Hill, Florida. Holly Hill Care Center is operated by a corporation owned by Harry Hartman, President, and Mr. Hartman’s wife. Pursuant to a complaint, Ernest H. Cartwright, a health care evaluator employed by Petitioner, conducted an investigation on November 20, 1997, of Respondent’s facility. The complaint, alleging that a timely prorated refund had not been made to a beneficiary following death of a resident, was confirmed. Beatrice Raverini moved into Holly Hill Care Center on August 24, 1997, and died on September 1, 1997. Her personal belongings were removed from her room on September 8, 1997. While the policy of the facility is to process refunds on the first day of the month following termination, an error in communication occurred between the onsite administrator and the facility’s bookkeeper who is located off-site. As a consequence, the refund was not mailed on October 1, 1997. A refund check was prepared and mailed on or about November 1, 1997, and deposited by Mrs. Raverini’s beneficiary on November 14, 1997, in Canada. Approximately 53 days elapsed before the refund was made. Section 400.424(3)(a), Florida Statutes, requires that the refund occur within 45 days or less. The refund check processed and mailed by Respondent erroneously refunded 958 dollars instead of 616 dollars. Since the room was not vacated of personal belongings until September 8, 1997, the refund should have been calculated from that date instead of the date of September 1, 1997. Respondent refunded 342 dollars in excess of what was owed to the beneficiary.
The Issue The issue to be resolved in this proceeding concerns whether the Petitioner's application for licensure as a nonresident life, health and variable annuities insurance agent should be denied on the basis of his having pled guilty and been convicted of a felony. Embodied within that general issue are the issues of whether the felony involved is one of moral turpitude and whether the conviction, and the circumstances surrounding it, demonstrate that the Petitioner lacks fitness or trustworthiness to engage in the business of insurance.
Findings Of Fact The Petitioner, Preston Hursey, Jr., filed an application for qualification in Florida as a nonresident life, health and variable annuities agent. The application was filed on November 13, 1989. On April 9, 1990, the Department of Insurance issued a letter of denial with regard to that application based upon a felony conviction of the Petitioner in the past. The Respondent is an agency of the State of Florida charged, in pertinent part, with enforcing the licensure, admission and continuing practice standards for insurance agents of all types, embodied in Chapter 626, Florida Statutes, and with regulating the admission of persons to licensure as insurance agents in the State of Florida. On August 12, 1988, an Information was filed with the United States District Court for the District of Columbia, charging the Petitioner with three felony counts involving "aiding or assisting presentation of false income tax return". That is a felony violation of Title 26 U.S.C., Sections 7206(2). On November 15, 1989, the Petitioner was found guilty of three counts of aiding or assisting presentation of false income tax return in violation of that statutory section. The actual conduct for which he was convicted occurred prior to the charges. Prior to 1984, the Petitioner worked for some years as a medical examiner for insurance companies, taking medical histories, blood pressures, pulses and the like, for purposes of establishing insurance coverage for clients of the companies. Some time in early 1984, the Petitioner approached American Dynamics Corporation, as a client, with the intent of availing himself of the financial planning services of that company with the intent of saving on income taxes. The company was apparently counseling clients as to tax shelters in which they could invest or which they could claim, as a means of' avoidance of federal income tax. The Petitioner became very interested in that tax saving procedure and sometime in 1984 became involved with the firm as one of its financial counselor employees. The firm trained him in the service they offered to taxpayers, which involved financial planning by using trusts to defer taxes, as well as other means of sheltering income from tax liability. The company and the Petitioner counseled numerous clients and assisted them in taking advantage of alleged tax shelters, including the final act of preparing their tax returns. During the course of going to hearings with his clients, when their tax returns came under question by the Internal Revenue Service, the Petitioner became aware that apparently the service would not accept the tax shelter devices being used by his company and him as a legitimate means of avoiding taxes. He then sought legal advice from a tax attorney and received an opinion from him that the tax avoidance counseling methods, devices and tax return preparation the Petitioner and his employer were engaging in were not legal, and that the Petitioner should advise anyone he knew involved in such schemes to terminate their relationship. The Petitioner acted on that advice, terminated his relationship with the company and recommended to his clients that they terminate their relationship with the company and the tax avoidance devices being used. Through hindsight and learning more about relevant tax law in the last four to five years since the conduct occurred, the Petitioner realizes that the tax shelter schemes marketed by his employer at that time and, by himself, did not make financial or legal sense. The Petitioner at that time had very little training in financial counseling or advising and very little training in the Federal income tax laws arid regulations. In retrospect, after receiving much more such training as an agent of New York Life Insurance Company since that time, he realized the significance of the error he and his former employer committed. When the tax returns were prepared by the Petitioner and others employed with the firm involved, the tax return accurately reflected the gross income of he taxpayer, the "W2 forms", and all appropriate documentation. Then, the gross income of the taxpayer was shown as reduced by the amount of funds affected by the tax shelter system marketed by the Petitioner's former employer and the Petitioner. There was a statement on the tax return itself explaining the disparity in taxable income so that basically the Internal Revenue Service had the facts and circumstances of such situations disclosed to it. It, however, deemed anyone marketing such tax shelters as engaged in marketing "abusive tax shelters", in effect, in violation of the Internal Revenue Code. Ultimately, the Petitioner was prosecuted along with others involved in the transactions and suffered a felony conviction of three counts of violation of the statute referenced above. The Petitioner has steadfastly maintained both before and after his conviction that he had no intent to violate the tax laws of the United States, but rather believed, until he sought a legal opinion from a qualified attorney, that the service he was marketing was a legal one. After he came under prosecution by the Justice Department for the violation, the Petitioner cooperated fully with the Internal Revenue Service and the Justice Department. The felony violation of which he was convicted, by guilty plea, carried a sentence of three years imprisonment, one year for each tax return involved. That sentence was reduced by the court; however, in consideration of the circumstances of the Petitioner's offense and his cooperation with the prosecuting authorities, to one month of "work release", which he served by working during the day for senior citizens organizations and returning to a confinement facility in the evening. He also was required to render 200 hours of community service, which he has completed, and three years probation. Because of his excellent attitude and behavior and his demonstrated activities designed to further his education in the insurance and securities field, his successful pursuit of the insurance and securities marketing profession in other states and his obviously-positive motivation, his probation officer has recommended that his probation be terminated early, after only two years of it would have been completed in November, 1990. The sentence was reduced because of the Petitioner's positive record in his community, the fact that he had no prior criminal history and because of widespread support by responsible members of the community and by the probation officers who reviewed his case and situation. The judge, upon sentencing, also noted that he was impressed by the fact that the Petitioner wanted to continue to work in the insurance and securities field and was the sole support of a young son whom he was supporting and caring for as an active parent. He continues to do that. The record establishes that the Petitioner's conviction was the result of a guilty plea. That plea resulted from a negotiated "plea bargain" settlement with the prosecuting authorities. The Petitioner established with unrefuted testimony, that he never had any willful intent to commit a crime or defraud the Federal government and the Internal Revenue Service. While he had a general intent to offer the tax advice involved to clients and assist them in engaging in tax shelter arrangements and in preparing the related tax returns, he had no specific intent to commit acts which he knew to be illegal when he committed them, nor which he believed amounted to fraud or deceit of the Internal Revenue Service. Although he pled guilty to a crime involving, by the language of the above--cited statute, the element of falsity, which bespeaks of deceit or fraud, the evidence shows that the Petitioner harbored no such fraudulent or deceitful intent. This is corroborated by the fact that the Petitioner and his clients disclosed all income on the tax return and simply disclosed that a portion of it was sheltered, which procedure was determined by the Internal Revenue Service to be illegal. There was no evidence of record to indicate that the Petitioner sought to conceal income or otherwise commit a false or fraudulent act in the course of his financial and tax advice to these clients, nor in the preparation of their tax returns for submittal. While the statute he is convicted of violating appears to involve the element of moral turpitude because it refers to false or fraudulent tax returns, it is a very general type of charge which can cover many types of activities or conduct. Consequently, one should consider the specific conduct involved in a given instance, such as this one, to determine whether the crime committed factually involved moral turpitude. Based upon the unrefuted evidence of record culminating in the findings of fact made above, it is clear that the Petitioner committed no conduct involving moral turpitude at the time the activity in question was engaged in for the above reasons. The Petitioner has been in no legal altercation, criminal or otherwise, before or since the instance which occurred in 1984. He has become licensed in Washington DC, Maryland and Virginia as an insurance agent and as a broker agent. He represents numerous insurance companies, including, for approximately five years, the New York Life Insurance Company and other reputable companies. He has pursued his continuing education requirements and has earned more requirements than he needs for licensure in Florida and Maryland. He is actively seeking to improve his professional standing and competence in the insurance and securities field and is highly motivated to continue doing so. A great deal of his motivation comes from the fact that he is the sole support of his young 11-year-old son. He enjoys the insurance profession because it gives him time to participate in his son's many school-related and extracurricular activities, such as football. The Petitioner's testimony, and the proven circumstances of the situation, establish without question that he is an honest, forthright person who has candidly admitted a past mistake and who has worked actively, in the approximate six years which have elapsed since the conduct was committed, to rectify that blemish on his record. His efforts to rehabilitate himself personally and professionally involved his active participation as a parent for his son in his son's school life and otherwise, and participation in church and community activities. During the time period which has elapsed since the conduct in question occurred, he has sufficiently rehabilitated himself both personally and professionally so as to justify the finding that he has demonstrated trustworthiness and fitness to engage in the business of insurance. Indeed, three other states, after having the circumstances of his conviction fully disclosed to them, have licensed him or retained him as a licensee insurance agent. The Petitioner is a navy veteran of Vietnam, having served three tours in the Vietnam war, for which service he was decorated. He had a number of security clearances, including a top secret security clearance based upon his work in the field of communications and cryptology during that war. This honorable service, the efforts he has made to improve himself personally and professionally before and since the subject conduct occurred, the fact that it was an isolated incident on his record, the fact that it did not involve any established intent to defraud or deceive on his part, the fact that he is an active, positive parental role model, community member and church member, and his general demeanor at hearing of honesty and forthrightness convinces the Hearing Officer that the isolated incident of misconduct he committed did not involve a demonstrated lack of fitness and trustworthiness to engage in the business of insurance. Quite positively, the Petitioner has demonstrated his fitness and trustworthiness to engage in that business.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is therefore, RECOMMENDED that the Petitioner's application for licensure as a nonresident life, health and variable annuities insurance agent should be granted. DONE AND ENTERED this 7th day of February, 1991, in Tallahassee, Leon County, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of February, 1991. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 90-3069 Petitioner's Proposed Findings of Fact 1-4. Accepted. 5. Rejected, as not clearly established by the evidence of record. 6-14. Accepted. Respondent's Proposed Findings of Fact 1-4. Accepted. 5. Rejected, as not clearly established by the evidence of record. COPIES FURNISHED: Mr. Tom Gallagher State Treasurer and Insurance Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, FL 32399-0300 Don Dowdell, Esq. General Counsel Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, FL 32399-0300 Preston Hursey, Jr., pro se Post Office Box 43643 Washington, DC 20010 Willis F. Melvin, Jr., Esq. Andrew Levine, Esq. Department of Insurance Division of Legal Services 412 Larson Building Tallahassee, FL 32399-0300
The Issue The ultimate issue is whether, the Department of Health and Rehabilitative Services may intercept Daniels' income tax refund. However, this turns on the issue of whether Daniels has been delinquent in excess of 3 months. Factually, Daniels owed money for aid provided his child. The Department of Health and Rehabilitative Services has obtained a judgement in the amount of $6,673 upon which Daniels is to make payments of $25/month. Department of Health and Rehabilitative Services argues that Daniels owes and has been delinquent on the $6,673 since the order was entered. Daniels argues that he is not over three months in arrears on his payments of $25/month. The evidence introduced by Department of Health and Rehabilitative Services shows Daniels is in arrears only $27.91 on his payments on the judgement. The issue is whether Section 45 CFR Section 303.72 requires a delinquency in payments required to be made on the amount of money established in a court order.
Findings Of Fact On October 10, 1981, Carol Renee Neal assigned to the State of Florida her rights to child support for Latoya v. Daniels, acknowledged child of Ira Clayton Daniels. An Order was entered on January 14, 1985, which established that Ira Clayton Daniels owed the State of Florida $6,673 for a public assistance child support obligation and provided that Ira Clayton Daniels would pay $25/month until the $6,673 was repaid. The records of the Department, Daniels' Exhibit 1, reflect Daniels has made regular payments on the debt, and at the time of the hearing owed $27.91 arrearage on the debt. Daniels was less than three months in arrears on his payments established by the Order referenced above.
Recommendation Based upon the foregoing, the claim against Ira Clayton Daniels should be dismissed. DONE AND ORDERED 16th day of September 1986 in Tallahassee, Leon County, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 16th day of September 1986. COPIES FURNISHED: Warren J. Schulman, Esquire Assistant General Counsel Child Support Enforcement Program 105 East Monroe, Suite 101 Jacksonville, Florida 32202 Frederick J. Simpson, Esquire HRS District IV Legal Counsel Post Office Box 2417 Jacksonville, Florida 32231-0083 Ira C. Daniels 8904 Greenleaf Road Jacksonville, Florida 32208
Findings Of Fact During the discovery phase of this proceeding, the Department ascertained from Echo Artz that $4,070 (the "Uncontested Amount") of the assessed tax was not contested. That is, Echo Artz agreed that it owed at least that amount of the total tax assessment of $67,757.46 set forth in the Notice. Of the total amount set forth in the Notice, $54,626.25 was the tax portion and the remainder was interest. No penalties were imposed as of the date of the Notice of Proposed Assessment. The Uncontested Amount was approximately 7.5 percent of the tax portion and approximately 5.9 percent of the total assessment. At the final hearing, during discussion of the Department's Motion to Dismiss, Echo Artz stated that the Uncontested Amount was erroneous. Instead, it stated that $23,135 of the total tax assessment was actually uncontested. The total tax portion of the assessment should be, according to Echo Artz, $57,730. The revised uncontested amount was approximately 40 percent of the total tax portion. Echo Artz did not pay any of the Uncontested Amount or any of the revised uncontested amount pursuant to its own calculations. The Department asserts that inasmuch as Echo Artz failed to pay the Uncontested Amount prior to filing its request for formal hearing, the case must be dismissed as required by law.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent, Department of Revenue, enter a final order of dismissal. DONE AND ENTERED this 18th day of May, 2012, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN 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 18th day of May, 2012.
The Issue The issue to be determined is whether Respondent, Ronald M. Shultz, violated section 473.323(1)(g) and (h), Florida Statutes (2014), and Florida Administrative Code Rule 61H1-23.002(1)(a) and (b), as alleged in the Administrative Complaint, and if so, what penalty should be imposed.
Findings Of Fact Based upon the documentary evidence and the witness testimony presented, and the entire record of this proceeding, the following findings of fact are found: The Florida Board of Accountancy is the state agency charged with the licensing and regulation of the practice of certified public accounting pursuant to section 20.165 and chapters 455 and 473, Florida Statutes. Respondent, Ronald M. Shultz, is a certified public accountant (CPA) licensed in the state of Florida. Respondent has been licensed since 1997 and holds license number AC 003065. His license is currently active, and he has no history of discipline by the Board. Respondent’s address of record is 1031 Northwest 6th Street, Suite F-2, Gainesville, Florida 32601. At all times material to the allegations in the Administrative Complaint, Respondent was the owner of a CPA firm in the state of Florida, i.e., Ronald M. Shultz, CPA, PA. The firm’s license was first issued in May of 2006, and is also in active status. Respondent is the president and sole shareholder for his firm. While he employed others who worked in the firm, Respondent is ultimately responsible for all aspects of business conducted by the firm. Ronald M. Shultz, CPA, PA, is in the business of providing tax services to clients, including the preparation of federal income tax returns. The normal procedure employed in Respondent’s office required that, once a client’s tax return had been prepared, the client was called to come in and receive a copy of the return for review. The client also was given a copy of an IRS E-File signature authorization form (Form 8879), although the evidence was unclear as to when the form was given to the client. In any event, the client was usually told to review the return, and then a meeting would be scheduled to go over the return, especially in those cases where the return was complex or had a lot of “moving parts.” Once the client had an opportunity to review the return and discuss it with Respondent, the client would provide a signed copy of Form 8879 and Respondent’s firm’s personnel would electronically file the return. No return is supposed to be filed without a signed Form 8879. During the period giving rise to these proceedings, Respondent had a part-time employee named Jeff Gruver, and a former IRS-enrolled agent named Jeff Conklin. Mr. Gruver usually answered the phones, took messages, provided copies of returns to clients, and, once things were finalized with a return, electronically filed returns as directed. Mr. Gruver could answer simple tax-related questions such as, “the return indicates you are getting a refund of this amount,” or the return shows that you need to pay this much in taxes.” Any more complicated questions were fielded by Mr. Conklin, or if necessary, Mr. Shultz. Mr. Conklin is someone with whom Mr. Shultz had worked previously, and actually prepared tax returns for the firm. Mr. Shultz would generally review his work, and would go over the return with the client. During this time period, Respondent relied on Mr. Conklin to a greater extent than was his normal practice. Mr. Shultz was in the midst of a protracted divorce, and helping with the care of his father, who was in declining health. William and Jo Lee Beaty were clients of Respondent, and had been clients for several years. Respondent’s office prepared their federal income taxes since at least 2009. The Beatys’ tax return generally has a lot of “moving parts.” They typically request an extension of time for filing, and bring their paperwork to Respondent’s office early in October, in order to have the return prepared by the October 15 deadline. Normally, the Beatys will owe additional taxes. They generally reviewed the return with Mr. Shultz, signed the Form 8879, and provided a check to send to the IRS when the return was filed. In 2014, Mr. Beaty took the documents necessary for the preparation of the Beatys’ 2013 tax return to Respondent’s office. Mr. Beaty acknowledged that he often delivered the documentation very late in the process–-often just days before the October 15 deadline--but thought that this year, he had delivered it as much as six weeks before. The complaint the Beatys filed with the Department indicates that the documents were delivered on or about October 1. While Respondent had no direct knowledge of when the documents were delivered to the office, he testified that his office records indicated that it was no earlier than October 1.1/ After consideration of all of the evidence, the documents were delivered most likely sometime in very late September or on October 1, 2014. Respondent directed Jeff Conklin to prepare the Beatys’ tax return. Mr. Conklin had prepared their tax return the year before. In the days immediately preceding the October deadline, Jo Lee Beaty started calling Respondent’s office to see when she and her husband would be able to review the return and determine how much money they owed in taxes. She could not reach anyone from the firm, despite repeated phone calls. Someone from Respondent’s office (presumably either Mr. Conklin or Mr. Gruver) electronically submitted the Beatys’ 2013 federal income tax return to the IRS on October 15, 2014. However, Respondent did not review the return before it was filed and the Beatys did not see it, and were not informed as to its contents. On or about November 6, 2014, Mr. Conklin notified Mr. Shultz that he was quitting his job, effective immediately. He did not notify Respondent that there were any problems with the Beatys’ tax return. Respondent was knowledgeable about the Beatys’ prior returns, and knew that the 2013 return would include a significant amount of information, including multiple Schedule Cs, Schedule K-1s, significant information regarding businesses owned by the Beatys, and property rentals. Respondent was also aware that the Beatys typically wanted to review their tax return with him prior to its filing. Not only were the Beatys unable to contact Respondent in order to schedule a meeting prior to the tax-filing deadline, but they were unable to contact him to determine whether the return was actually filed or to determine how much money was owed. Mrs. Beaty called the office the day after the deadline and no one answered. The office was actually closed that day. Mrs. Beaty made other calls to the office, although she was unable to say specifically how many times. However, when she was still unable to speak to anyone on November 13, 2014, nearly a month after the filing deadline, she made a request to the IRS to get a copy of the couple’s tax return. The IRS sent the Beatys a transcript of their filed return that same day, although it is unclear when they received it. Mrs. Beaty continued to attempt to reach Respondent, with no success. She even spoke to Respondent’s wife on the phone, and requested that she have Respondent return Mrs. Beaty’s phone calls. Respondent first learned that the Beatys were trying to reach him when his wife called him with the message from Mrs. Beaty. Respondent finally spoke to Mrs. Beaty on November 18, 2014. During this phone call, Respondent advised Mrs. Beaty that he would have their materials ready the following week. The Beatys did not receive the return or their documents as promised. On or about December 9, 2014, Mrs. Beaty sent Respondent an email requesting their return and backup materials. The email states: Ron, We were not given an opportunity to review the return with you prior to you submitting it to the IRS electronically. I called for several days prior to the final October 15th deadline to file trying to talk with you an/or [sic] Jeff. No one was available. My calls were not returned. October 14th and 15th I called more than once trying to find out what we were going to owe so that we could be prepared to include a check with the return we would need to sign and send to the IRS. Still no return phone call. Late in the day on October 15, I was assured by Jeff Gruver that the return would be filed and we would be able to take care of everything October 16th. It is nearly two months now, we have not reviewed our return with you, for accuracy, as has been the procedure in years past. We have not received the return for our signatures and instructions for submission. It is not for a lack of trying. After the filing deadline, on October 16th we began calling the office on numerous occasions to talk with you or Jeff and get our return. We left messages both with Jeff Gruver and on the various voice mailboxes to no avail. I have driven to the office only to find the man who was renting space from you there. He knew nothing of your schedule or when I might find you. He did indicate that Jeff C. now [sic] longer worked there. After calling Debra at the numbers on your sign twice you finally called. That was on or about November 18th or 19th. You told me you needed to review the return and would get it to us that week. I told you it needed to be before Friday November 21, 2014 as I was having surgery that day. You told me it would be before my surgery. We didn’t hear from you as promised. I called again the beginning of the next week (Thanksgiving week) and left a message which you returned early Tuesday afternoon I believe. You said you would get it to me later probably that day (this was a day that you had an afternoon doctor appointment). To date I have not heard from you again and had it not been for my call to the IRS I would have no proof that the return was filed nor any idea of what we owe. We are sorry to have to terminate our relationship under these circumstances. We had previously been very satisfied with your service and as you know we had referred people to you. Ron, your negligence and non-feasance comes as a great surprise. It is nonetheless inexcusable. We are contemplating reporting your inaction to the Florida DBPR. Please respond to this email and tell me what time before 5:00 p.m. Tuesday, December 9, 2014, so I can pick up all of the documents we gave you to prepare our 2013 tax return, and copies of all of our records. With disappointment, Jo Beaty Respondent did not respond to this email in a timely fashion and states that he did not do so because he was not checking his email regularly due to the issues with his father’s health. As a consequence, his first response to the email was dated December 22, 2014, in which he stated in part: First speaking about your federal tax return. Jeff Conklin told me your return was complete. He then told me basically he had to quit his current position with me for personal reason [sic] and simply walked out. When I went to find your file, none of your paperwork had been copied for what we call work papers . . . . Since Jeff left your file is [sic] disarray, I had to organize your paper work so that I could do an accurate review of your return. Yesterday I completed putting all of your paper work together and is now ready for my review. My plan is to complete the review tonight. And then, we can arrange a time to meet to go over your return. Despite this communication over two months after the filing of the Beatys’ tax return, they still did not receive their tax return or supporting documentation. The Beatys hand-delivered a complaint to the Department on December 22, 2014. Respondent was sent a notification letter regarding the complaint on December 29, 2014. He placed the documentation in the Beatys’ mailbox that same day. With the tax return and supporting documentation was an invoice for his services at a 50-percent discounted rate of $350. The Beatys were going to owe money, including some interest and penalties for being late, even had they paid their taxes on October 15, because payment was actually due on April 15. The IRS charges a failure to pay proper estimate penalty of $200. When taxes are paid after the due date, the IRS also charges a penalty of .5 percent of the unpaid amount due per month, up to 25 percent of the amount due. Any portion of a month is treated as a full month. On November 24, 2014, the IRS sent the Beatys a letter notifying them that they owed their taxes, including the $200 failure to pay proper estimated tax penalty; $879.08 in penalties, and $406 in interest. Some, but not all, of the penalties and interest are due to Respondent’s failure to timely provide a copy of their tax return. The Department expended $260 in costs, not including time by the legal section, in the investigation of this case.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Florida Board of Accountancy enter a final order finding that Respondent, Ronald M. Shultz, violated section 473.323(1)(g) and (h), and rule 61H1-23.002(1)(a) and (b). It is further recommended that Respondent’s license be reprimanded; that he be placed on probation for a period of one year, subject to conditions determined by the Board; and that he pay an administrative fine of $500 and investigative costs of $260.00 DONE AND ENTERED this 8th day of April, 2016, in Tallahassee, Leon County, Florida. S LISA SHEARER NELSON 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 8th day of April, 2016.
