Findings Of Fact At all times pertinent to the matters in issue here, Bellot Realty operated a real estate sales office in Inverness, Florida. The Department of Transportation was the state agency responsible for the operation of the state's relocation assistance payment program relating to business moves caused by road building operations of the Department or subordinate entities. Frank M. Bellot operated his real estate sales office and mortgage brokerage, under the name Bellot Realty, at property located at 209 W. Main Street in Inverness, Florida since July, 1979. He operated a barber shop in the same place from 1962 to 1979. He moved out in October, 1991 because of road construction and modification activities started by the Department in 1989. The office was located in a strip mall and the other tenants of the mall were moving out all through 1990. Mr. Bellot remained as long as he did because when the Department first indicated it would be working in the area, its representatives stated they would be taking only the back portion of the building. This would have let Mr. Bellot remain. As time went on, however, the Department took the whole building, including his leasehold, which forced him out. He received a compensation award from the Department but nothing from any other entity. Though the instant project is not a Federal Aid Project, the provisions of Section 24.306e, U.S.C. applies. That statute defined average annual net earnings as 1/2 of net earnings before federal, state and local income taxes during the two taxable years immediately prior to displacement. During 1988, Mr. Bellot's staff consisted of himself and between 3 and 5 other agents from whom he earned income just as had been the case for several prior years. In 1988 his Federal Corporate Income Tax return reflected gross income of $120,843.00 and his profit was reflected as $27,377.25. The Schedule C attached to his personal Form 1040 for that year reflected gross sales of $25,078.00 with deductions of $5,250.00 for a net income of $19,828.00. Two of his agents foresaw the downturn in business as a result of the road change and left his employ during 1989. A third got sick and her working ability, with its resultant income, was radically reduced. This agent was his biggest producer. For 1989, Petitioner's tax return reflected the company's gross receipts were down to $50,935.75 and his operating loss was $5,700.03. However, the Schedule C for the 1989 Form 1040 reflected gross revenue of $21,450 with a net profit of $14,503. In 1990, the Schedule C for the Form 1040 reflected gross receipts of $5,565.00 which, after deduction of expenses, resulted in a net profit of $1,665.00 for the year. The corporate return reflects gross receipts of $23,965.96 and a net income figure from operations of $1,282.21. Mr. Bellot contends that neither 1989 or 1990 were typical business years as far as earnings go. Aside from a loss of activity and a general decline in business in Inverness, his parents, who were always in the office due to a terminal illness, caused him lost work time as he was very busy with them. He was also involved in a move and in refurbishing a house. In 1990, Mr. Bellot decided he could no longer stay in his office location due to the fact that the Department decided to take his whole building. Even if the taking had been of only one-half the building, however, it still would have put him out of business because it would have taken his parking area. At that time, the Department was rushing Mr. Bellot to vacate the premises. He was in difficult financial straits, however, and it would not have been possible for him to move but for the Department's compensation payments. As it was, he claims, the compensation was after the fact, and he had to borrow $30,000.00 in his mother's name in order to rehabilitate the building he moved into. Instead of utilizing income figures from years in which business activity was normal, the Department chose to use the income figures from 1989 and 1990, both of which were, he claims, for one reason or another, extraordinary. In doing so, since the income in those years was much lower than normal, the compensation he received was also much lower, he claims, than it should have been. He received $8,725.50. Had the 1988 and 1989 years income been used, the payment would have been $20,000.00, the maximum. He also claims the Department used the incorrect operating expense figures concerning travel expense. The Schedule C reflects a higher deduction for automobile expense for both years, arrived at by the application of a standard mileage expense approved by the Internal Revenue Service. In actuality, the expense was considerably less and, if the real figures had been used, his income would have been increased substantially for both years. Mr. Bellot's appeal was reviewed by Ms. Long, the Department's administrator for relocation assistance who followed the provisions of departmental manual 575-040-003-c which, at paragraph (IV) on page 33 of 35, requires the displacee to furnish proof of income by tax returns or other acceptable evidence. At subparagraph (e) on page 31 of 35 of the manual, the requirement exists for the displaced business to "contribute materially" to the income of the displace person for the "two taxable years prior to the displacement." If those two years are not representative, the Department may approve an alternate two year period if "the proposed construction has already caused an outflow of residents, resulting in a decline of net income. " To grant an alternative period, then, the Department must insure that the loss of income is due to the Department's construction and not to other considerations. Here, the Department's District Administrator took the position it was not it's actions which caused the Petitioner's loss of income. Ms. Long took the same position. The Department's District 5 initially notified the people of Inverness of the proposed project somewhere around 1988. The project was to straighten Main Street out through downtown Inverness for approximately 2 miles. There is no evidence as to when the first affected party moved and Ms. Long does not know whether or not the project had an adverse effect on business in downtown Inverness. Petitioner's evidence does not show that it did.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that Petitioner's appeal of the Department's decision to refuse to use alternate tax years or actual mileage deduction in its calculation of a relocation assistance payment be denied. RECOMMENDED this 29th day of December, 1992, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of December, 1992. APPENDIX TO RECOMMENDED ORDER The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: Accepted. & 3. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and, in part, incorporated herein. Rejected as not proven by competent, non-hearsay, evidence. Accepted. Not proven. Merely a statement of Petitioner's position. Accepted that Petitioner's business income dropped. It cannot be said that the road project's were the primary cause of the decline in Petitioner's business. There is no independent evidence of this. Accepted and incorporated herein. First sentence accepted. Balance not based on independent evidence of record. Not a proper Finding of Fact but a comment on the evidence. First sentence accepted. Second sentence rejected. Accepted and incorporated herein. Not a Finding of Fact but a restatement of and attempted justification of Petitioner's position. Accepted and incorporated herein. Rejected as argument and not Finding of Fact. Not a Finding of Fact but a recapitulation of the evidence. FOR THE RESPONDENT: Accepted. & 3. Accepted. - 6. Accepted and incorporated herein. Accepted and incorporated herein. Accepted. & 10. Accepted. 11. & 12. Accepted. 13. Accepted. COPIES FURNISHED: Charles G. Gardner, Esquire Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0458 James R. Clodfelter Acquisitions Consultant Enterprises, Inc. P.O. Box 1199 Deerfield Beach, Florida 33443 Ben G. Watts Secretary Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0458 Thornton Jpp. Williams General Counsel Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0458
The Issue Whether Respondent committed the violations alleged in the "Administrative Complaint for Revocation of Certificate of Registration" (Administrative Complaint) filed with DOAH on September 13, 2011, and, if so, the action that should be taken.
Findings Of Fact Petitioner is the agency of the State of Florida responsible for administering the revenue laws of the State of Florida, including the imposition and collection of the state's sales and use taxes pursuant to chapter 212, Florida Statutes, and the state's corporate income taxes pursuant to chapter 220. Petitioner provides unemployment compensation tax collection services under contract with the Agency for Workforce Innovation through an interagency agreement pursuant to section 443.1316. Respondent is an active for-profit corporation with its principal address at 4401 Annette Street, West Palm Beach, Florida 33409. Respondent is a "dealer" as that term is defined by section 212.06(2), and holds certificate of registration number 60-8014787127-3. Respondent failed to timely file sale tax returns for the months of February and June 2011. Petitioner assessed Respondent an estimated tax liability of $2,000 for the months of February 2011 and June 2011. Respondent filed returns but failed to timely remit payment for the sale and use tax in the amount of $24,529.84 due and owing for the months of June, September, and December 2008; March, June, September, and December 2009; January through December 2010; and January, April, and May 2011. Due to its failure to timely file and/or remit taxes due, Respondent is liable for interest in the sum of $2,505.56, penalty in the sum of $2,526.36, and fees in the sum of $2,687.47, as of July 1, 2011. Respondent is an employing unit as defined in subsection 443.036(2), and is subject to the unemployment compensation tax provisions of chapter 443, as provided in section 443.1215. Respondent failed to timely file unemployment compensation tax reports for the calendar quarters ending June 30, September 30, and December 31, 2009; March 31, June 30, September 30, and December 31, 2010; and March 31 and June 30, 2011. As a result, Petitioner assessed Respondent an estimated unemployment compensation tax liability of $4,500.00 as of July 1, 2011. Due to its failure to timely file the unemployment compensation tax reports, Respondent is liable for interest thereon in the sum of $490.06, penalty in the sum of $450.00, and fees in the sum of $443.31, as of July 1, 2011. Respondent issued Petitioner worthless checks for the unemployment taxes due for the calendar quarters ending June 30, 2006; December 31, 2008; and March 31, 2009. As a result, Respondent still owes Petitioner unemployment compensation taxes in the sum of $425.34, interest in the sum of $119.09, and fees in the sum of $111.70. Respondent is required to file with Petitioner corporate income tax returns each year pursuant to the provisions of chapter 220. Respondent failed to timely file corporate income tax returns and/or pay the tax due to Petitioner for the tax years 2008, 2009, and 2010. Due to its failure to timely file corporate income tax returns and/or pay the tax due, Respondent is liable for penalties in the sum of $450.00 and fees in the sum $25.00, as of July 1, 2011. Petitioner has issued and filed against Respondent delinquent tax warrants, notices of liens, or judgment lien certificates in the public records for the collection of delinquent sales and use tax, delinquent unemployment compensation tax, and delinquent corporate income tax. Petitioner served upon Respondent a Notice of Conference on Revocation of Registration via mail on May 23, 2011, advising Respondent of a conference to be held June 22, 2011. No one appeared on behalf of Respondent at the conference scheduled on June 22.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a final order that revokes Respondent's certificate of registration. DONE AND ENTERED this 31st day of January, 2012, in Tallahassee, Leon County, Florida. S 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 31st day of January, 2012. COPIES FURNISHED: Nancy Terrel, Acting General Counsel Department of Revenue The Carlton Building, Room 204 501 South Calhoun Street Post Office Box 6668 Tallahassee, Florida 32314-6668 Lisa Vickers, Executive Director Department of Revenue The Carlton Building, Room 104 501 South Calhoun Street Tallahassee, Florida 32399-0100 Joseph Mellichamp, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399 Michael Lawrence Cohen, Esquire Michael L. Cohen Law Offices 1803 South Australian Avenue West Palm Beach, Florida 33409 Carrol Y. Cherry, Esquire Office of the Attorney General Revenue Litagation Bureau The Capitol, Plaza Level 01 Tallahassee, Florida 32399
The Issue The issue in this case is whether Petitioner is entitled to a waiver of the bond requirement set forth Section 559.927, Florida Statutes.
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made: Ladatco is a "seller of travel" as that term is defined in Section 559.927(1)(a), Florida Statutes. Ladatco deals exclusively in wholesale travel packages. Ladatco primarily packages and sells tours of Central and South America to retail travel agents. Until the last few years, the retail travel agents handled virtually all of the ticketing involved in the packages. Changes in the industry have resulted in Ladatco becoming more involved in the ticketing aspect as part of the services it provides in assembling the packages. However, Ladatco has very little direct contact with consumers. Ladatco originally began operations in 1967 as a subsidiary of another company. Ladatco has been conducting business in its current corporate form since 1976. Michelle Shelburne has been working for the company since 1969. She has been the president of Ladatco for at least the last ten years and she owns fifty percent (50 percent) of the outstanding stock. Annie Burke and Rosa Perez are the other officers of the company and they each own approximately twenty two and half percent (22 1/2 percent) of the stock. Both Burke and Perez have worked for Ladatco since approximately 1970. The remaining five percent of the outstanding stock is owned by an attorney who has represented Ladatco since 1967. Ladatco has seven other full time employees and operates out of an office building that is owned jointly by Shelburne, Perez and Burke. Under Section 559.927(10)(b), Florida Statutes, a seller of travel is obligated to post a performance bond or otherwise provide security to the Department to cover potential future claims made by travelers. The security required by this statute is for the benefit of consumers and may be waived by the Department in certain circumstances. On or about May 27, 1994, Ladatco submitted an Application for Security Waiver (the "Application") pursuant to Section 559.927(10)(b)5, Florida Statutes. In lieu of audited financial statements, Ladatco submitted a copy of its 1993 income tax return with the Application. Line 30 of that income tax return reflects a net loss for tax purposes of $100,722. In reviewing an application for a bond waiver, the Department looks at the taxable income on the income tax return. It is the Department's position that if a company shows a loss for tax purposes, it is lacking in financial responsibility and is ineligible for a bond waiver. Based on this policy, the Department denied Ladatco's Application by letter dated August 2, 1994. The certified public accountant who has handled all outside accounting services for Ladatco since 1977 testified at the hearing in this matter. He submitted a history of operations for the company from 1985 through 1993. The accountant explained that, in 1986, Ladatco acquired a very expensive computer system with customized software. The cost of this system was depreciated over a five year period. In addition, until 1991, the company operated out of a building that it owned. The building was sold to the individual principals of the company in 1991. During the years the company owned the building, a significant amount of depreciation was generated for tax purposes. The large depreciation expenses for the years 1986 through 1991 generated losses for tax purposes which have been carried over for future years. Thus, while the company's operations for 1993 generated a profit of $65,000, the loss carry over resulted in a net loss for income tax purposes. The current year forecast for the company, based upon existing bookings, projects a net income in excess of $64,000 for the year ending December 31, 1994. In sum, an isolated look at the taxable income loss reflected on the 1993 income tax return does not provide an accurate picture of the financial responsibility of this company. This closely owned company has been in business for approximately twenty eight (28) years. The three principals in the company have all been with the firm for more than twenty four (24) years. The company has demonstrated a great deal of stability and, while profitability has fluctuated from year to year, the company has continually met its obligations for more than a quarter century. There is every indication that it will continue to do so in the future. Ladatco has maintained a bond with the Airline Reporting Corporation ("ARC") for approximately two and a half years. The amount of the bond varies from year to year, but is generally in the vicinity of $35,000. The statute provides that a company which has successfully maintained a bond with the ARC for three years is entitled to a security waiver. While the ARC bond only protects the airlines and not the travelers, Ladatco will qualify for a waiver under this provision in approximately May of 1995. There is no indication of any unresolved complaints against Ladatco nor is there any evidence of civil, criminal or administrative action against the company.
Recommendation Based upon the forgoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Agriculture and Consumer Services enter a Final Order granting Ladatco's application for security waiver pursuant to Section 559.927(10)(b)5, Florida Statutes. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 16th day of December 1994. J. STEPHEN MENTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of December 1994. APPENDIX TO RECOMMENDED ORDER Only the Respondent has submitted proposed findings of fact. The following constitutes my ruling on those proposals. Adopted in pertinent part Finding of Fact 6 and also addressing the Preliminary Statement and in the Conclusions of Law. Adopted in substance in Finding of Fact 6. Adopted in substance in Finding of Fact 7. Adopted in substance in Finding of Fact 7. Adopted in substance in Finding of Fact 8. Adopted in substance in Finding of Facts 7 and 8. COPIES FURNISHED: Michelle D. Shelburne, President Ladatco, Inc. d/b/a Ladatco Tours 2220 Coral Way Miami, Florida 33145 Jay S. Levenstein, Senior Attorney Department of Agriculture and Consumer Services Room 515, Mayo Building Tallahassee, Florida 32399-0800 Honorable Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810 Richard Tritschler General Counsel Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, Florida 32399-0810
The Issue The issue in this proceeding is whether Petitioner, Richard Ruble, is entitled to renewal of his loan originator license, pursuant to chapter 494, Florida Statutes.
Findings Of Fact The Parties Petitioner, Richard Ruble, holds a loan originator license, National Mortgage Licensing System Identification Number 209981 ("LO License"), which was issued by Respondent, Office of Financial Regulation, and is the subject of this proceeding. Respondent is the state agency charged with administering and enforcing chapter 494, including part II of that statute, which regulates loan originators. Background and Evidence Adduced at the Final Hearing Petitioner has held his LO License since approximately 2004. As required by section 494.00312(7), Florida Statutes, loan originator licenses must be annually renewed.2/ In 2005 and 2006, Petitioner earned a substantial income from his business as a loan originator for real estate mortgage loans. As a result, he incurred a substantial federal income tax liability. When the real estate market took a dramatic downturn starting in 2007, Petitioner's income also dramatically dropped. He suffered significant loss of income starting in 2007. As a consequence, he has been unable to pay his federal income taxes since 2006. As a result of Petitioner's federal income tax liability for the years of 2005 and 2006, on February 12, 2013, the Internal Revenue Service(“IRS”) recorded a Notice of Federal Tax Lien ("Tax Lien") against Petitioner's real property located at 3801 South Ocean Drive, Unit 6Z, Hollywood, Florida,3/ and in Leon County, Florida. As a consequence of the creation of the Tax Lien, information constituting "adverse credit history information," as defined in Florida Administrative Code Rule 69-40.0113(2), has been included in his credit report. The inclusion of adverse credit history in Petitioner's credit report prompted Respondent to contact Petitioner sometime after February 12, 2013, and before June 8, 2013, and request him to provide specified information about release or payment of the Tax Lien by a June 8, 2013, deadline. Petitioner, through his counsel, contacted Respondent by correspondence dated June 7, 2013, explaining the circumstances under which the Tax Lien had been created and stating that Petitioner would provide the requested information, and notifying Respondent that Petitioner's accountant would need additional time beyond the June 8, 2013, deadline to gather and provide the requested information. On July 30, 2013, Respondent proposed to deny renewal of Petitioner's LO on the basis of the Tax Lien. On August 13, 2013, Petitioner provided to Respondent the requested additional information explaining the circumstances under which the Tax Lien was created. On August 15, 2013, Respondent withdrew its notice of denial of renewal of Petitioner's LO License; this withdrawal document expressly stated: "Please consider the Notice of Denial previously issued as withdrawn and of no force and effect." Respondent renewed Petitioner's LO, effective August 15, 2013. On December 30, 2013, Petitioner applied to renew his LO license for the year 2014. On June 30, 2014, Respondent issued a notice of denial of renewal of Petitioner's LO. Petitioner timely requested a hearing challenging the proposed denial of the renewal of his LO License. However, before the final hearing in that proceeding, the parties settled the matter by executing a Settlement Stipulation, a condition of which was that Petitioner provide, by December 31, 2014, all information required by Respondent to complete review of the renewal application for his LO. To comply with this condition, on December 22, 2014, Petitioner submitted Respondent's4/ Response Pursuant to Settlement Stipulation ("Response"), consisting of an explanation of his adverse credit history due to the Tax Lien and two lines of credit he had taken out to cover his business and personal expenses after the 2007 economic downturn and his consequent loss of income. The Response was supported by extensive documentation consisting of Petitioner's personal and business federal income tax returns; correspondence from Petitioner's counsel to Respondent addressing the Tax Lien and the status of Petitioner's efforts to resolve the Tax Lien matter with the IRS; and correspondence from the IRS dated September 8, 2014, stating that due to information Petitioner had provided, it (the IRS) had refunded some taxes paid and applied them to Petitioner's 2005 tax liability, which had, in part, given rise to the Tax Lien. On December 24, 2014, a Final Order incorporating the Settlement Stipulation was issued, and the file was closed on December 29, 2014. On December 31, 2014, Petitioner filed, and Respondent deemed received, Petitioner's application to renew his LO License for the year 2015. Sometime before October 19, 2015——over nine months later——Respondent informed Petitioner that the information that he had provided was not substantively adequate to support renewal of his LO License for 2015. Thereafter, on October 19 and December 14, 2015, Petitioner, through his counsel, submitted information consisting of copies of his income tax returns filed with the IRS for years 2005 through 2010, as well as copies of his 2011, 2012, and 2013 income tax returns that were filed with the IRS by his accountant, Chris Bagnall. The last three years of tax returns (for years 2011, 2012, and 2013) were offered by Petitioner as evidence that he was working diligently with the IRS to become current with respect to his filed income tax returns. On December 28, 2015, Petitioner applied to renew his LO License for the year 2016. On February 15, 2016, Respondent issued a Notice of Intent to Deny Renewal Application for Loan Originator License Pursuant to Chapter 494, Florida Statutes (hereafter, "Notice of Intent to Deny"), proposing to deny Petitioner's application to renew his LO License for the years 2014, 2015, and 2016.5/ The Notice of Intent to Deny cited three grounds, two of which remain pertinent to this proceeding: (1) Petitioner failed to demonstrate that he possessed the general fitness and responsibility necessary to command the confidence of the community and warrant a determination that he, as the applicant, would operate honestly, fairly, and efficiently, as required by section 494.00312(4)(b) and rule 69V-40.113; and (2) a background check revealed that Petitioner's credit history contained adverse credit history information——specifically, that the IRS holds an outstanding federal income tax lien on property owned by Petitioner. At the final hearing, Respondent expressly abandoned the third ground for its proposed denial—— specifically, that Petitioner had failed to provide certain information as required under the terms of a final order of settlement (discussed in greater detail below); accordingly, that ground is no longer at issue in this proceeding.6/ At the final hearing, Petitioner presented the testimony of his accountant, Chris Bagnall, who was retained in 2013 to assist Petitioner in preparing and submitting his overdue tax returns for years 2005 through 2015, and negotiating a plan for paying his past due income taxes for these years. Bagnall explained that it is the IRS's preference to have the taxpayer make payments toward the outstanding liability, and then to issue refunds if the taxpayer has overpaid. Alternatively, if the taxpayer is not able to make payments toward resolving the outstanding tax liability, the IRS will negotiate payment plans applying the carryback rules, which allow income gains and losses to be "netted out" for purposes of determining overall tax liability. Under this approach, the IRS will not negotiate payment plans until all past due tax returns have been filed. In the meantime, interest and penalties continue to accrue on the outstanding income tax liability. Bagnall testified, credibly, that after the real estate market crash in 2008, Petitioner did not have the money to pay the income tax he owed, and he used what little money he did have to try to keep his business afloat. Because Petitioner was not in a position to make a payment toward his tax liability due to his drastically diminished income, and due to not having timely filed income tax returns for several years, he was not in a position to negotiate a plan with the IRS to pay the income taxes he owes. In the meantime, interest and penalties on Petitioner's past due taxes continued to accrue. As of the date of the final hearing, Petitioner's total liability was approximately $366,000, a significant portion of which was attributable to penalties and interest accruing on the outstanding tax liability.7/ Bagnall testified that since Petitioner retained him in 2013, he has been preparing and filing Petitioner's past due income tax returns in batches, as Petitioner has been able to garner the funds to pay for Bagnall's accounting services. As of the date of the final hearing, Bagnall recently had filed Petitioner's income tax return for 2014, and he testified, credibly, that he would be filing Petitioner's 2015 income tax return within a few days after the final hearing. Once Petitioner's 2015 return was filed, he would be current regarding the filing status of his income tax returns, so finally would be in a position to negotiate with the IRS to develop a plan to pay off his tax liability, with the ultimate aim of dissolving the Tax Lien. Petitioner acknowledged that as of the date of the final hearing, he had not voluntarily made any payments toward addressing his income tax liability. Additionally, Petitioner's tax returns show gambling losses of $8,782 in 2011, $2,100 in 2012, and $18,546 in 2013. However, as discussed above, the evidence shows that Petitioner, through Bagnall, is taking a comprehensive approach to resolving his income tax liability based in part on the use of the carryback rules to net out his overall tax liability. The evidence does not show that it would have been feasible for Petitioner to have made individual payments toward his outstanding tax liability until all of his returns had been filed and he was in a position to negotiate a repayment plan. Respondent elicited testimony from Petitioner that in the application for renewal of his LO License filed in December 2013 for the year 2014, he had failed to disclose the existence of the Tax Lien until Respondent brought to his attention that they were aware of the existence of the Tax Lien. Respondent also elicited testimony that until brought to his attention by Respondent, Petitioner had failed to disclose, in his LO License renewal application filed in December 2015 for the year 2016, that he had filed for personal bankruptcy in September 2015. Respondent elicited this testimony to establish that Petitioner exhibited a pattern of being untruthful and incomplete in his responses to the application questions, and, thus, lacks the character to warrant a determination that he would operate honestly, fairly, and efficiently, as required by rule 69V-40.0113(3)(b), for purposes of entitlement to renewal of his LO License.8/ However, the evidence does not clearly and convincingly show that Petitioner intended to be untruthful in his application responses or to hide the existence of the Tax Lien or his personal bankruptcy from Respondent. It is as plausible that Petitioner omitted this information in error. With respect to the Tax Lien, the evidence shows that Petitioner had previously disclosed the creation of the Tax Lien to Respondent in correspondence dated June 13, 2013, and had, at that time, provided an explanation regarding the events leading to its creation. It would simply be nonsensical for Petitioner to intentionally falsely deny the existence of the Tax Lien on his application when he had previously submitted that very information to Respondent. Similarly, with respect to disclosure of his personal bankruptcy, Petitioner credibly testified that the matter had been a topic of discussion with Respondent's staff for a period of months. Although Petitioner amended his 2016 LO License renewal application only shortly before the final hearing to correctly reflect that he had filed a personal bankruptcy petition within the past 10 years, the credible evidence indicates that Petitioner believed that Respondent was aware of his personal bankruptcy through previous discussions with Respondent's staff, so would have had no motivation to intentionally provide false information regarding that matter on his renewal application. No evidence was presented at the hearing showing that Petitioner has ever engaged, in the course of conducting his mortgage loan originator business, in any fraudulent, dishonest, or other conduct harmful to the consuming public. Findings of Ultimate Fact The undersigned found Petitioner to be credible and forthright in his explanation of the creation and status of the Tax Lien, his personal bankruptcy, the filing of his tax returns, and his ongoing efforts to resolve his adverse credit history issues that have affected renewal of his LO License.9/ As discussed in detail above, Petitioner's adverse credit history information is, at least in some significant measure, a result of circumstances largely beyond Petitioner's control. When the real estate market collapsed in 2008, Petitioner suffered an immediate, dramatic drop in income; at that point, he incurred the large tax liabilities with which he has been burdened ever since. As discussed above, due to Petitioner's lack of income during and after the real estate market crash, it took some time for him to obtain the accounting services he needed in order to file his overdue tax returns——an essential step in negotiating a tax payment plan with the IRS. Although Petitioner's efforts to resolve the Tax Lien with the IRS have taken some time, Petitioner finally is, or soon will be, in a position to negotiate a payment plan with the IRS to pay his tax liability and, ultimately, resolve the Tax Lien. Before now, Petitioner has not been in a position to comprehensively and systematically pay down his tax liability pursuant to a negotiated plan. Thus, at this juncture, Petitioner's lack of voluntary payments toward resolving his Tax Lien and his gambling losses have not been determined a basis for finding that Petitioner lacks the character, general fitness, and financial responsibility to entitle him to renewal of his LO License.10/ The persuasive evidence shows that Petitioner is making steady progress toward getting himself in the position, through bringing himself current in his income tax returns filings, to negotiate a payment plan with the IRS in order to comprehensively and systematically pay down his tax liability with the aim of dissolving the Tax Lien. For these reasons, the undersigned finds that Petitioner has shown that he possesses the character, general fitness, and financial responsibility to warrant a determination that he will operate honestly, fairly, and efficiently such that his LO License should be renewed for the year 2016.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent issue a final order approving renewal of Petitioner's loan originator license for the year 2016. DONE AND ENTERED this 27th day of January, 2017, in Tallahassee, Leon County, Florida. S CATHY M. SELLERS 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 27th day of January, 2017
Findings Of Fact On September 16, 1981, the Circuit Court, Fourth Judicial Circuit, In And For Duval County, Florida, upon a Petition For Modification of the Final Judgment of Paternity, entered a Consent Order For Support requiring the Petitioner in this cause to pay Fifteen and No/100 Dollars ($15.00) per week as and for child support and assigning said support payments to the Respondent in this cause until such time as the child involved in the paternity suit no longer received assistance from the State of Florida. At the time Respondent caused Petitioner's Federal Income Tax Refund to be intercepted, the Petitioner was in arrears in the sum of Two Thousand Seven Hundred Ninety and 17/100 Dollars ($2,790.17) on child support payments assigned to the Respondent under the order referred to in paragraph 1 above. Petitioner's Federal Income Tax Refund in the amount of Eight Hundred Twenty Eight and No/100 Dollars ($828.00) has been intercepted and is in the possession of the Respondent.
Recommendation Having considered the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED that Respondent, Department of Health and Rehabilitative Services, enter a Final Order providing for the Petitioner's income tax refund in the amount of Eight Hundred Twenty Eight and No/100 Dollars ($828.00) be applied against his debt to the State of Florida for past due child support. Respectfully submitted and entered this 22nd day of April, 1988, in Tallahassee, Florida, Leon County, Florida. WILLIAM R. CAVE 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 22nd day of April, 1988. COPIES FURNISHED: Gregory Alan Mitchell 439 Woodbine Street Jacksonville, Florida 32206 R. Craig Hemphill, P.A. 331 East Union Street, Suite 1 Jacksonville, Florida 32202 Frederick J. Simpson, Esquire Dept. of HRS Post Office Box 2417 Jacksonville, Florida 32231 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
The Issue Whether Respondent Office of the Comptroller should refund to Petitioner taxes paid pursuant to Chapter 199 and 201, Florida Statutes.
Findings Of Fact The parties stipulated to the facts set forth in paragraphs 1 through 9 of the Petition herein, as follows: The agencies affected in this action are the Department of Revenue, Tallahassee, Florida, and the Office of the Comptroller, Tallahassee, Florida. The Petitioner is Zimmer Homes Corporation, 777 Southwest 12th Avenue, Pompano Beach, Florida. Zimmer Homes Corporation, on or about December 12, 1974, conveyed a piece of property described as follows: All of that part of the Southeast quarter of Section 10, Township 44 South, Range 42 East, of Palm Beach County, Florida, lying North of the North right-of-way (r/w) line of Forest Hill Boulevard, less the West 40 feet thereof for road right-of-way and less the East 40 feet thereof. The sellers paid the necessary excise tax on documents and intangible tax as follows: a. $11,250.00 total consideration $3,750,000.00 of Section Florida 201.02(1) Statutes b. 3,900.00 based upon note of $2,600,000.00 Section Florida 201.07 Statutes c. 1,542.00 based upon note of $1,027,906.00 Section Florida 201.07 Statutes d. 4,125.00 based upon total consider- ation of $3,750,000.00 Section Florida 201.021(1) Statutes e. 5,200.00 based upon mortgage secur- ing note of $2,600,000.00 Section Florida 199.032(2) Statutes f. 2,055.81 based upon mortgage secur- ing note of $1,027,906.00 Section Florida 199.032(2) Statutes A lawsuit was commenced for reasons not relevant to this Petition and the Circuit Court of the Fifteenth Judicial Circuit of Florida entered a Final Judgment on July 12, 1978, a copy of which is attached hereto as Exhibit "A". In the Final Judgment the Court determined that the Purchasers had a right to rescind the transaction. The Court ordered that all obligations of the parties arising out of the Purchase and Sale Agreement were cancelled and that the Purchasers were entitled to a sum of money in order to restore the parties to their original positions. (Petitioner's Exhibit 1). On March 22, 1979, pursuant to Section 215.26, Florida Statutes, Zimmer Homes Corporation applied for a refund of the excise tax on the documents in an amount as specified in Paragraphs 4(a), 4(b), 4(c) and 4(d), above. (Petitioner's Exhibit 4). On April 3, 1979, pursuant to Section 199.252, Florida Statutes, and Section 215.26, Florida Statutes, Zimmer Homes Corporation applied for a refund of the intangible tax paid in an amount as specified in Paragraphs 4(e) and 4(f) above. (Petitioner's Exhibit 4). According to a letter from the Office of the Comptroller dated April 23, 1979, a copy of which is attached hereto as Exhibit "B", the Office of the Comptroller indicated that they concurred with the findings and conclusions of the Department of Revenue in denying the refund request on the excise tax on documents as specified in paragraph 6 above. As grounds therefore, it was indicated that the refund requests were denied because the statute of limitations under Section 215.26, Florida Statutes, barred the request for refund. (Petitioner's Exhibit 3). By letter dated April 26, 1979, a copy of which is attached hereto as Exhibit "C", the Office of the Comptroller indicated that they concurred with the findings of the Department of Revenue on denying the refund for intangible taxes which had been paid as specified above. As grounds therefore it was indicated that the request was denied because the applicable statute of limitations had run. (Petitioner's Exhibit 2).
Recommendation That Petitioner's application for refund of tax paid under Chapters 199 and 201, Florida Statutes, be approved. DONE AND ENTERED this 6th day of September 1979 in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of September 1979. COPIES FURNISHED: Richard B. Burk, Esquire Scott, Burk, Royce and Harris 450 Royal Palm Way Palm Beach, Florida 33480 Barbara Harmon, Esquire Assistant Attorney General The Capitol, Room LL04 Tallahassee, Florida 32301 John D. Moriarty, Esquire Department of Revenue Room 104, Carlton Building Tallahassee, Florida 32301 Honorable Gerald A. Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32301
Findings Of Fact Petitioner, St. Joe Paper Company, is a taxpayer subject to the requirements of the Florida Corporate Income Tax. Its principal offices are located at 803 Florida National Bank Building, Jacksonville, Florida. Petitioner filed its 1976 calendar year tax return with respondent, Department of Revenue (Department), on September 23, 1977. Although filings are normally due on April 1, the filing was made pursuant to an extension of time to and including October 1, 1977 which was granted by the Department. Petitioner was subsequently audited by the Internal Revenue Services (IRS) for calendar years 1972 through 1977. Thereafter, petitioner and IRS entered into a settlement in 1982 wherein they agreed that certain adjustments were required for each of the audited tax years. The adjustments resulted in an overpayment of the Florida Income Tax for 1976. Subsection 220.23(2) , Florida Statutes, requires that a taxpayer notify the Department whenever an IRS audit results in adjustments to the taxpayer's net income subject to the Florida corporate income tax for any taxable year. Because the IRS sett1enent affected the years 1972 through 1977, petitioner filed amended returns for those years with the Department on October 8, 1982. According to the amended returns, petitioner owed additional taxes for all years except 1976, when it had made an overpayment. It added these deficiencies, totaling $82,003.03, and subtracted the overpayment for 1976 ($18,174.10), resulting in a net tax owed the Department of $63,828.94. Petitioner also computed interest owed on its deficiencies for the years 1972-1975 and 1977 to be $39,956.58 and offset this amount with a $12,067.40 credit which it claimed was interest owed it by the Department for its overpayment of taxes for calendar year 1976. When the interest was added to the $63,828.94, the total liability was $91,718.42. The record is unclear whether petitioner calculated its 1976 interest using a 12 percent or 6 percent rate. The proper rate to be used is 6 percent. On August 5, 1983 the Department directed petitioner to appear at its Jacksonville office on August 11 to pay $12,067.40 and if it failed to do so, a tax warrant would be issued. Thereafter, on August 9 petitioner paid the deficiency. On August 15, 1983 petitioner filed an Application for Refund Form DR- 26 requesting a refund of its August 9 payment. In its application, it stated chat "(i)nterest computed on the tax refund for 1976 was offset against interest due for other years", and that the Department's refusal to allow this offset was error. On August 19, 1983 the Department's classification officer, audit classification, issued a letter denying the application on the following grounds: Florida Statutes 214.14 requires that interest be paid should the Department take longer than nine (9) months to refund an overpayment of tax. When computing interest, the Department does so under the theory that each year stands alone. Consequently, offsetting of deficiencies and overpayments is not recognized when computing interest. Your letter of October 8, 1982, shows that check number 2400 was sent, with the Amended Florida returns, to pay the net additional tax and interest. Consequently, the 1976 refund would be deemed to have been made within the nine-month period required under Florida Statute 214.14. This letter prompted the instant proceeding.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: that petitioner's application for a refund be GRANTED and that it be computed at a 6 percent rate to run from October 1, 1977. DONE and ENTERED this 18th day of November, 1983, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of November, 1983. COPIES FURNISHED: Mr. W. W. Carlson Assistant Vice-President St. Joe Paper Co. 803 Florida National Bank Building Jacksonville, Florida 3220 Barbara Staros Harmon, Esquire Department of Legal Affairs The Capitol, LL04 Tallahassee, Florida 32301 Mr. Randy Miller Executive Director Department of Revenue Carlton Building, Room 102 Tallahassee, Florida 32301 =================================================================
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.
The Issue Whether Respondent properly assessed a tourist development tax, penalty, and interest against Petitioner.
Findings Of Fact The Tax Collector is empowered to impose a tourist development tax (“TDT”) on the privilege of renting, leasing, or letting “for consideration of any living or accommodations in any hotel, apartment hotel, motel, [or] resort motel.” § 125.0104(3)(a)1., Fla. Stat. The Tax Collector is the entity operating pursuant to Palm Beach County Ordinance, Chapter 17, Article III, Section 17-111 through 116, and is authorized to impose TDT at a six percent rate on taxpayers. See also § 125.0104(4)(a), Fla. Stat. As part of its duties, Respondent audits taxpayers and attempts to recover TDT owed. At all times material to this case, Homing Inn was a 103-room hotel located in Boynton Beach, Florida. As a taxpayer and operator of a hotel that rents rooms, Homing Inn was subject to audit of its revenues by Respondent. Respondent initiated an audit against Petitioner for the period of July 1, 2016, through June 30, 2019 (“audit period”), to determine if Petitioner had properly remitted TDT, as reflected on Petitioner’s TDT returns. In July 2019, Suzanne Englhardt (“Englhardt” or “Auditor”), revenue auditor, was assigned to conduct Homing Inn’s audit. Englhardt started the audit of Homing Inn by conducting pre-audit research, which included her looking up Petitioner on Sunbiz, the property appraisers’ website, and preparing an audit notice. On or about July 3, 2019, Englhardt sent Homing Inn a certified notice informing Petitioner that their account had been selected for a Tourist Development Audit (“audit”) of Petitioner’s books and records. In the notice, Respondent requested Homing Inn “make available all records, receipts, invoices, and related documentation” to review for the audit. Petitioner complied with Respondent’s request for records and provided bank statements for November 2017 through June 2019; federal income tax returns for years 2016, 2017, and 2018; and room revenue reports, which were typed pages of purported revenue reported by Petitioner on its TDT returns. After Homing Inn provided the records, Englhardt reviewed the submitted documentation and found that Homing Inn failed to maintain records of sales at the hotel. As a result, Englhardt used the best information supplied and available to conduct the audit, Petitioner’s federal tax returns and bank statements. She did not utilize Petitioner’s revenue reports during the audit because no source documents were provided to support or back up any of the listed numbers typed on the revenue reports. 2018 Englhardt started the audit by reviewing Petitioner’s 2018 gross income reported on its supplied federal income tax return in the amount of $1,122,076.00. Englhardt compared the supplied 2018 bank deposits on the bank statements that amounted to $1,122,048.73 to the federal income tax return. Englhardt also reviewed Petitioner’s 2018 TDT returns, which amounted to $653,202.13. Homing Inn did not provide Respondent any documentation to account for the difference in reported income. Next, Englhardt decided that since the gross revenues on the federal income tax return and the bank deposit statements balanced, she presumed TDT and sales tax were included. After she backed out the six percent TDT and seven percent sales tax, the Auditor ultimately calculated and arrived at the adjusted income of $992,963.48 that she utilized to calculate the additional TDT. Englhardt calculated the additional TDT by subtracting the income reported by Petitioner on the TDT returns, $653,202.13, from the gross adjusted amount she established, $992,963.48, and determined that the total unreported income was $339,761.85. She then charged a six percent rate of TDT, which lead to the additional TDT of $20,385.68 for 2018. Englhardt calculated the remaining years of the audit with the same methodology. 2016 When auditing 2016, Englhardt reviewed Homing Inn’s 2016 federal income tax return provided and determined that Petitioner’s gross income was $1,042,188.00. However, when the Auditor looked at the income reported on the 2016 TDT returns, the amount differed, and the reported income on the TDT returns was $724,929.42. Englhardt backed out the TDT and sales tax from the income reported on the federal tax return and ultimately calculated and arrived at the adjusted income of $922,290.27. Next, Englhardt subtracted the reported income on the TDT return from the adjusted income and determined the total 2016 unreported income was $197,360.85. To determine the additional TDT taxes Homing Inn owed, Englhardt charged the six percent rate by $197,360.85 for an additional $11,841.53 owed. 2017 Englhardt reviewed Homing Inn’s 2017 federal income tax return and determined the gross income reported was $1,032,331.00. Englhardt also reviewed Petitioner’s 2017 TDT returns, which amounted to $658,435.37. Englhardt backed out TDT and sales tax from the income reported on the federal tax return and ultimately calculated and arrived at the adjusted income of $913,567.26. Next, Englhardt subtracted the reported income on the TDT return from the adjusted income to determine the total 2017 unreported income was $255,131.89. To determine the additional TDT taxes Homing Inn owed, Englhardt charged the unreported income of $255,131.89 by the six percent rate for an additional $15,307.91 owed. 2019 Englhardt reviewed Homing Inn’s bank statements from January 2019 to June 2019 to determine the 2019 gross income. The total deposits reported were $614,992.28. Englhardt also reviewed Petitioner’s 2019 TDT returns, which amounted to $350,925.07. Englhardt backed out TDT and sales tax from the income reported from the deposits on the bank statements, and ultimately calculated and arrived at the adjusted income of $544,240.96. Next, Englhardt subtracted the reported income on the TDT return from the adjusted income and determined the total 2019 unreported income was $193,315.89. To determine the additional TDT taxes Homing Inn owed for 2019, Englhardt charged the unreported income of $193,315.89 by the six percent rate for an additional $11,598.95 owed. After completing the audit, Englhardt added the unreported income for each year and the TDT amounts owed. She found that Homing Inn had a total unreported income of $985,569.97 and owed an additional TDT of $59,134.20 from the audit period. On or about September 27, 2019, the Tax Collector issued a Notice of Intent to Make Audit Changes to Petitioner (“Notice of Intent”) and advised Petitioner of the additional TDT in the amount of $59,134.20 owed. The Notice of Intent also notified Homing Inn that Respondent also sought a penalty and interest and provided, in pertinent part: The $59,134.20 total tax due was carried over from the Summary of Tax Due scheduled to the Calculation of Tax Penalty and Interest spreadsheet. The floating rate of interest on tax due is based on the applicable rates established by the Florida Department of Revenue, which is currently an annual rate of 9%. As also prescribed by the State due to findings previously identified in a prior audit, penalty is assessed at 100% of tax due per Florida Statute 212.07(3)(b). As of 09/30/2019, Mata Chorwadi Inc., d/b/a: Homing Inn, currently owes a total of $125,460.97 in tax, penalty and interest. On or about December 16, 2019, Respondent issued a Notice of Proposed Assessment (“NOPA”). Petitioner requested and was granted an extension until April 14, 2020, to respond to the NOPA. On or about April 11, 2020, Petitioner timely protested Respondent’s audit findings. Petitioner’s protest letter claimed that the unreported revenue was made up of Homing Inn’s snack sales sold for $1.00 each; coins collected from a laundromat; proceeds from additional room cleaning services; and proceeds from charges for lost room keys. Petitioner informed Respondent in the protest letter that all the unreported revenue was deposited in the hotel’s bank account. Petitioner requested that Respondent fully abate the penalties and interest for reasonable cause and not willful neglect pursuant to section 213.21(3)(a), Florida Statutes. To support its position in the protest, Petitioner produced purchase receipts from Sam’s Club, which included purchases for snacks and cleaning supplies, and produced a laundry room collection log allegedly showing the coins collected from the laundromat at Homing Inn. Homing Inn did not produce any documents to show any revenue allegedly earned for additional cleaning services or lost room keys. On or about May 4, 2020, Respondent issued the Notice of Decision denying Homing Inn’s protest letter and sustaining the assessment. The Tax Collector considered Homing Inn’s argument and documents, but determined that Petitioner did not provide any proof that the snacks, coins listed on the collection log, or other expenses accounted for the unreported revenue since the Tax Collector was not provided any documents from Homing Inn relating to alleged revenue for additional cleaning services or lost room keys, sales receipts, or bank deposit slips that correspond to verify the amounts listed on the collection log. On June 3, 2020, Petitioner timely filed a Motion for Reconsideration (“Motion”). Homing Inn disputed the assessment and penalty and asked that it be reevaluated. Homing Inn again asserted in its Motion that the unreported revenue consisted of snack sales, revenue from the laundromat, revenue from additional cleaning services, and revenue from lost room keys. However, Petitioner did not provide any additional documents to support its position. On June 9, 2020, Respondent issued a Notice of Reconsideration-Final Assessment (“Notice of Reconsideration”) denying the Motion and sustaining the assessment since no new information was provided by Petitioner. The Tax Collector also notified Petitioner in the Notice of Reconsideration how to appeal the Tax Collector’s decision if Homing Inn was not in agreement with the tax assessment and stated, in pertinent part: If the taxpayer is not in agreement with the assessment, pursuant to Florida Statute 72.011, Mata Chorwadi Inc. may contest the assessment by “filing an action in circuit court; or, alternatively, the taxpayer may file a petition under the applicable provisions of chapter 120.” As a settlement offer, Petitioner remitted a $28,000.00 check to Respondent dated June 8, 2020, that had “paid in full” on the memo line. Respondent returned the check to Homing Inn since the amount was not for the assessment due. Afterwards, Petitioner remitted a second check in the amount of $28,000.00. Respondent applied the $28,000.00 to the total outstanding balance of Homing Inn’s tax. On July 17, 2020, Petitioner timely filed a Petition for Chapter 120 Hearing contesting tax, penalty, and interest from the Tax Collector’s assessment in the Notice of Reconsideration and requested a hearing. Audit History In 2007, Homing Inn had been audited by the Tax Collector. The first audit resulted in Petitioner owing additional TDT based on unreported revenue. The current audit is the second audit of Homing Inn for TDT. Hearing At hearing, Englhardt testified that at the beginning of the audit, Petitioner informed her that all records before November 2017 were destroyed in a flood and could not be provided. Englhardt testified that snack sales, laundry coins, key card replacement monies, and room cleaning proceeds were not revenues subject to TDT. However, she explained during the hearing, that Homing Inn failed to provide any documents to demonstrate sales or revenue for the items they were asserting, so she was not able to make any of the revenue deductions Petitioner requested. At hearing, Englhardt addressed in detail each item Petitioner was contesting and all of the documentation Homing Inn provided the Tax Collector requesting a reduction of the assessment amount determined from the audit. Englhardt started with Homing Inn’s purchase receipts for the snacks supplied. On the point of snacks, Englhardt testified that she asked Homing Inn for sales receipts during the conference they had so that she could adjust for the snacks. However, Homing Inn never provided any sales receipts. Englhardt explained that the receipts supplied by Homing Inn demonstrated expenses, not revenue, so she could not use the documents supplied for the audit. Englhardt also explained that she did not use the coin laundry log because Homing Inn did not provide any deposit slips to back up those alleged deposits. She needed additional source documentation to delineate that particular revenue stream, and Petitioner failed to provide documentation to substantiate any of the items on the log. Englhardt explained further that she was not able to use the alleged extra cleaning charge proceeds for the audit because there was nothing to quantify it. There was no audit trail, folios, sales receipts, or anything to demonstrate any such payments. Englhardt also explained that the alleged charge of $5 per lost key was considered. She testified that she saw the purchase receipt for the room keys but could not use it because nothing showed revenue for lost keys. There were no customer bills, folios, or credit card receipts. Englhardt testified she had to conduct the audit following section 212.12(5)(b), Florida Statutes, because if records were unavailable, she was to make an assessment from an estimate based on the best information available, which for Homing Inn were the federal income tax returns, TDT reports, and bank statements that she used. Englhardt also testified that she considered Homing Inn’s request to reduce the assessment amount, but denied it, because there was no documentation to make any reductions or adjustments. At hearing, Englhardt also addressed the interest and penalty the Tax Collector was imposing. She explained that the penalty is 100 percent, according to the statute, if there is a previous audit finding as there had been with Homing Inn. She also testified that interest is “never compromised.” Englhardt also testified that she applied the $28,000.00 remitted by Homing Inn to the tax, which reduced their TDT of $59,134.20 to $31,134.20, but the penalty amount was still the $59,134.20, and $7.66 per day interest. At hearing, Homing Inn produced purchase receipts for snacks and cleaning supplies, Exhibit 3; a laundromat collection log, Exhibit 4; purchase receipts for key cards, Exhibit 5; a list showing charges for room damages and a list of additional cleaning services, Exhibit 7; and a copy of a check that represented repayment for a loan, Exhibit 6. Homing Inn used its corporate representative, Dipika Shah (“Shah”), to testify at hearing. Shah explained that her husband owns Homing Inn, and she works at the desk occasionally, but mainly runs errands and purchases items needed for the hotel. Shah testified that all income collected from the snacks, key cards, and other revenues are deposited in one bank, PNC Bank. Shah explained that the computer system checks guests in and out. There are four or five people that work at the desk. She testified there are weekly customers, and the weekly rental comes with one cleaning. If a customer wants an additional cleaning, it is an additional $20.00 per room cleaning. Shah also testified that there is an additional charge for any room damage, but often times the damage amount is not paid. Shah described the Homing Inn’s coin-operated laundromat on the hotel premises contained four washers and four dryers. She explained that her husband pulls the coins out of the machines, logs the amount collected, rolls up the coins, and makes laundromat deposits in the Homing Inn general bank account. Shah admitted that she has no personal knowledge of what her husband has collected. Shah verified the purchase of 5,800 room key cards at hearing. However, she admitted there was no receipts for sales of lost keys in the amount of $5.00 each to customers. Shah also explained that Homing Inn has snacks for purchase. Shah testified that Homing Inn does not keep records of snacks sales and most of the snack purchases are cash. Shah testified that their accountant prepares the TDT returns monthly. Shah testified that she is unsure if the business maintains a general ledger and has never seen a profit and loss statement for the business. Findings of Ultimate Fact In this case, the Tax Collector established that the audit giving rise to this proceeding was properly conducted. After reviewing the records Homing Inn submitted for the audit, the Auditor determined that the amounts on the bank statements and federal tax returns matched, but the amounts listed in Homing Inn’s TDT returns were underreported. Homing Inn failed to provide the Auditor with any records to account for the difference between the federal income tax and TDT returns. The Auditor correctly performed Homing Inn’s audit using an acceptable methodology of assessing unreported revenue based on the federal income tax returns, bank statements, and income reflected in the TDT returns. During the audit, Petitioner failed to supply requested records to the Tax Collector that accurately reflected sales at the hotel or source documentation that explains any of the contested unreported revenue. Therefore, the Auditor could not use Petitioner’s supplied documentation as part of the calculations for the audit to reduce the assessment amount. Additionally, the record is void of any evidence to support reducing the assessment amount for any snack sales, laundromat revenue, cleaning revenue, key sale monies, and room damage proceeds. Shah’s limited involvement and knowledge in the daily operations of Homing Inn did not allow her to present relevant firsthand testimony or competent evidence to support Petitioner’s assertions. Therefore, the Auditor properly determined Petitioner’s TDT liability utilizing the method in section 212.12(5)(b), which allows the Auditor to rely on an estimation for the assessment when the taxpayer fails to provide records for the audit, and the Tax Collector’s assessment of $59,134.20 tax is proper.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent, Palm Beach County Tax Collector, enter a final order directing Mata Chorwadi, Inc., d/b/a Homing Inn, to pay the Tax Collector’s assessment for $31,134.20 of TDT; $59,134.20 of penalty; and $12,444.95 of interest, accruing at $7.66 per day. DONE AND ENTERED this 21st day of May, 2021, in Tallahassee, Leon County, Florida. S JUNE C. MCKINNEY Administrative Law Judge 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 21st day of May, 2021. COPIES FURNISHED: Orfelia Mayor, General Counsel Palm Beach County Tax Collector 301 North Olive Avenue Post Office Box 3715 West Palm Beach, Florida 33402-3715 Rex D. Ware, Esquire Moffa, Sutton & Donnini, P.A. 3500 Financial Plaza, Suite 330 Tallahassee, Florida 32312 Joseph C. Moffa, Esquire Moffa, Sutton & Donnini, P.A. Trade Center South, Suite 930 100 West Cypress Creek Road Fort Lauderdale, Florida 33309 Manshi Shah, Esquire 6525 Jessy Court Lake Worth, Florida 33467 Jonathan W. Taylor, Esquire Moffa, Sutton & Donnini, P.A. Trade Center South, Suite 930 100 West Cypress Creek Road Fort Lauderdale, Florida 33309 Hampton C. Peterson, General Counsel Palm Beach County Tax Collector 301 North Olive Avenue Post Office Box 3715 West Palm Beach, Florida 33402-3715
