Findings Of Fact The Petitioner, Integra Corporation, had a dispute with the Florida Department of Revenue with respect to sales or use tax allegedly due in the amount of $605,305.70 on lease payments made on its rental of hotels from their owners. An assessment for taxes due was processed in the normal manner by the Department of Revenue. Integra Corporation filed a Protest of the assessment, and after the Department's Notice of Decision denied the Protest, Integra filed a timely Petition for Reconsideration. Ultimately the Department issued a Notice of Reconsideration which rejected the arguments of Integra Corporation. Integra Corporation agrees that the Notice of Reconsideration was transmitted on April 24, 1990, for it alleges that fact in paragraph 3 of its Petition. The Department's final rejection of the arguments made by Integra Corporation against the assessment of sales and use tax made in the Notice of Reconsideration dated April 24, 1990, prompted Integra Corporation to mail by certified mail, return receipt #P796 304 819, to the Division of Administrative Hearings on June 21, 1990, an original Petition challenging the Department's tax assessment. That petition was captioned Integra Corporation, Petitioner v. Department of Revenue, Respondent, and was filed by the Clerk of the Division of Administrative Hearings on June 25, 1990. No copy of the original Petition was served on the Department of Revenue, or its counsel. The opening paragraph states that Integra Corporation "hereby petitions the Department of Revenue for administrative proceedings. . ." The Clerk of the Division of Administrative Hearings realized that the Petition should not have been addressed to or filed with the Division of Administrative Hearings, and on that same day forwarded the Petition to the appropriate agency, the Department of Revenue, which received the Petition on June 27, 1990.
Recommendation It is RECOMMENDED that the petition filed by Integra Corporation be dismissed as untimely. DONE and ENTERED this 10th day of September, 1990, at Tallahassee, Florida. WILLIAM R. DORSEY, JR. 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 10th day of September, 1990.
The Issue The issue is whether Petitioner owes money to Respondent due to an overpayment of compensation.
Findings Of Fact At all relevant times, Respondent has employed Petitioner. By Stipulation, the parties agree that Respondent overpaid Petitioner the sum of $6282.41 by check dated February 14, 2005. The dispute is whether Respondent is entitled to repayment of an additional $2332 in withheld federal income taxes associated with the agreed-upon overpayment. On the date of the overpayment in February 2005, Respondent credited Petitioner with the gross sum of $9328. The net payment to Petitioner was $6282.41. The difference between the gross and the net was $2332 in withheld federal income taxes and $713.59 in employee-paid FICA and Medicaid. Respondent is not seeking repayment of the employee-paid FICA and Medicaid. Respondent discovered the error on December 31, 2005, so it was unable to process the paperwork necessary correct the situation with the tax withholding in the same tax year of 2005. By failing to discover the error in time to process the paperwork in the same tax year, Respondent was unable to effectively reverse the withholding transaction with the Internal Revenue Service. Thus, when Petitioner filed his 2005 federal income tax return, his gross income included this overpayment, and the amount of tax already paid included the $2332 that was erroneously withheld in Respondent's overpayment in February 2005. It is thus clear that Respondent overpaid Petitioner $6282.41 in net pay plus $2332 in income taxes that it withheld from Petitioner and submitted, to Petitioner's credit, to the Internal Revenue Service. The total overpayment is therefore $8614.41.
Recommendation It is RECOMMENDED that the Department of Juvenile Justice enter a final order determining that, due to an overpayment in 2005, Petitioner shall repay $8614.41, upon such terms, if any, as the department shall determine. DONE AND ENTERED this 24th day of October, 2006, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE 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 24th day of October, 2006. COPIES FURNISHED: Anthony J. Schembri, Secretary Department of Juvenile Justice Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-3100 Jennifer Parker, General Counsel Department of Juvenile Justice Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-1300 Michael B. Golen Assistant General Counsel Department of Juvenile Justice 2737 Centerview Drive Tallahassee, Florida 32399 Theodore E. Morakis 11904 Southwest 9th Manor Davie, Florida 33325
The Issue The issue is whether petitioner's candidacy for the office of Tax Collector would conflict or interfere with his employment as an auditor for the Department of Revenue.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Petitioner, Robert M. Hendrick, a career service employee, is employed with respondent, Department of Revenue (DOR), as a Tax Auditor IV in its Leesburg, Florida field office. He has been employed by DOR since September 1991. In his position, petitioner primarily audits tangible personal property assessments performed by the local Property Appraiser and, on occasion, he inspects the property which is the subject of the assessment. In March 1996, the Lake County Tax Collector publicly announced that he would not run for reelection. After learning of this decision, by letter dated March 19, 1996, petitioner requested authorization from his employer to run for that office. The letter was received by DOR's Executive Director on April 1, 1996. On April 10, 1996, the Executive Director issued a letter denying the request on the ground the candidacy would conflict with petitioner's job duties. More specifically, the letter stated in relevant part that: Under section 195.002, Florida Statutes, the Department of Revenue has supervision of the tax collection and all other aspects of the administration of such taxes. Your position with the Department may require you to review or audit the activities of the office you propose to seek. Also some of your duties in supervising other officials in the administration of property taxes may be affected by your proposed candidacy. Your job requires you to review appropriate tax returns, and other records to resolve complex issues related to taxing statutes administered by the Department of Revenue. It also requires you to identify and scrutinize transactions to ascertain whether taxpayers have escaped paying property taxes. In addition, it also requires you to review and audit procedures used by counties to identify and value tangible personal property and accomplish statutory compliance, to investigate taxpayer complaints, to conduct field review with county staff as appropriate, and to provide education and assistance to county taxing officials. Because of the Department's statutory supervision of the office of tax collector, there cannot be a certification that your candidacy would involve "no interest which conflicts or activity which interferes" with your state employment within the definitions in section 110.233(4), Florida Statutes. The letter went on to say that This letter is a specific instruction to you that you should not qualify or become a candidate for office while employed in your current position. If you wish to commence your campaign by performing the pre-filing requirements, the law requires that you first resign from the Department. Failure to do so shall result in disciplinary action to dismiss you from your position in accordance with the Department's disciplinary standards and procedures, and Rule 60K-4.010, F.A.C., on the grounds that you are in violation of the Department's Code of Conduct, Section 110.233, Florida Statutes, and Rule 60K- 13.002(3), F.A.C. After receiving the above decision, by letter dated April 15, 1996, petitioner requested that the Executive Director reconsider his decision. Thereafter, on April 24, 1996, petitioner filed a request for a formal hearing to contest the agency's decision. Both the Property Appraiser and Tax Collector play a role in the property tax program in the State of Florida. The Property Appraiser generally values or assesses property subject to taxation and applies the millage rate set by the taxing authority. After the tax roll is approved by DOR, it is certified to the Tax Collector who then collects the taxes and distributes them to the appropriate taxing authorities. It is noted that ad valorem taxes make up the lion's share of taxes at the local level while tangible personal property taxes are a very small source of revenues. DOR is charged with the duties of providing oversight to the property tax program and aid and assistance to the Property Appraiser and Tax Collector. In this regard, DOR views the two offices as an integral part of the property tax program rather than two separate entities. It characterizes the program as "a stream or process where (the) lines of delineation (between the two offices) are not as distinct as they might have been ten or fifteen years ago." Because of the highly sensitive nature of the tax program, it follows that a certain degree of trust and integrity must exist between DOR (and its employees) and the local offices. Petitioner does not interface with the office of Tax Collector in any respect, and his duties do not require that he audit any of that office's records. His only duties are to audit the tangible personal property assessments performed by the Property Appraiser. These facts were not controverted. Although he has never differed with a valuation of the Property Appraiser during his five year tenure at DOR, and no such disagreement has occurred in Lake County during the last twenty-five years, petitioner could conceivably disagree with an assessment while running for office during the next few months. If the matter could not be informally settled, the tax rolls would not be certified by DOR, and litigation against DOR could be initiated by the Property Appraiser. Under those unlikely circumstances, petitioner might be called as a witness in the case, although the general practice has always been for DOR to use personnel from the Tallahassee office in litigation matters. To the very minor extent that petitioner could affect the tax rolls by disagreeing with the Property Appraiser's valuations, this could also impact the amount of money collected by the Tax Collector. DOR cites these circumstances as potentially affecting in an adverse way the level of trust and integrity between DOR and the office of Tax Collector. However, under the facts and circumstances of this case, this potential conflict is so remote and miniscule as to be wholly immaterial. The evidence also shows that in his audit role, petitioner has the "opportunity . . . to look and have access to tax returns," some of which "are of TPP (tangible personal property) nature (and) have attached to them federal tax returns" which might be used by the Property Appraiser for establishing the value of tangible personal property. Whether petitioner has ever had access to, or reviewed such, returns is not of record. In any event, to the extent this set of circumstances would pose a potential conflict with the Property Appraiser, as to the Tax Collector, it would be no more significant than the purported conflict described in finding of fact 7. Finally, DOR suggests that if petitioner was unsuccessful in his bid for office, it would likely damage the "relationship of trust" that now exists between DOR and the Tax Collector. Again, this purported conflict is so speculative as to be deemed immaterial. The parties have stipulated that, as of the date of hearing, petitioner's only option for qualifying to run for office is to pay a $6,173.00 qualifying fee no later than noon, July 19, 1996. The opportunity for submitting an appropriate number of signatures in lieu of a filing fee expired on June 24, 1996. On the few, isolated occasions during the last twenty-five years when the Lake County Tax Collector has requested information from DOR personnel, he has spoken by telephone with DOR legal counsel in Tallahassee. Those matters of inquiry, primarily relating to ad valorem taxes, do not concern any area related to petitioner's job duties. He also pointed out that his office always cooperates with the office of the Property Appraiser, especially when "corrections" must be made due to errors by that office. Even so, he described the two offices as being separate and with entirely different duties. This testimony is accepted as being the most persuasive on this issue. At least four persons have already announced that they would run for Tax Collector for Lake County. The parties have stipulated that one of those persons is a regional administrator for the Department of Highway Safety and Motor Vehicles who was not required to resign his position in order to run for office. According to the incumbent Tax Collector, that individual supervises other state employees who occasionally audit certain aspects of his office pertaining to automobile license plates and decals. Because of the time constraints in this case, and although not legally obligated to do so, respondent has voluntarily agreed to allow petitioner to take annual leave (or presumably leave without pay) commencing on the date he qualifies for local public office, or July 19, 1996, and to remain on leave until a final order is issued by the agency. At that time, if an adverse decision is rendered, petitioner must choose between resigning or withdrawing as a candidate. These terms are embodied in a letter from DOR's counsel to petitioner dated July 3, 1996. If petitioner is allowed to run for office without resigning, he has represented that he will campaign while on leave or after regular business hours. He has also represented, without contradiction, that his campaign activities will not interfere with his regular duties. If elected, he intends to resign his position with DOR.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Revenue enter a final order granting petitioner's request that it certify to the Department of Management Services that his candidacy for the office of Lake County Tax Collector would involve no interest which conflicts, or activity which interferes, with his state employment. DONE AND ENTERED this 10th day of July, 1996, in Tallahassee, Florida. DONALD R. ALEXANDER, 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 10th day of July, 1996. APPENDIX TO RECOMMENDED ORDER Respondent: Partially accepted in finding of fact 1. Partially accepted in findings of fact 2 and 3. 3-5. Partially accepted in finding of fact 1. 6. Partially accepted in finding of fact 5. 7-9. Partially accepted in finding of fact 4. 10-11. Partially accepted in finding of fact 7. 12. Rejected as being irrelevant since petitioner was not an employee of DOR in 1990. 13-17. Partially accepted in finding of fact 7. 18. Rejected as being unnecessary. 19-20. Partially accepted in finding of fact 5. 21. Partially accepted in finding of fact 8. 22-23. Partially accepted in finding of fact 5. Partially accepted in finding of fact 9. Rejected as being unnecessary. Note - Where a proposed finding of fact has been partially accepted, the remainder has been rejected as being irrelevant, not supported by the evidence, unnecessary, subordinate, or a conclusion of law. COPIES FURNISHED: L. H. Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100 Linda Lettera, Esquire Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Mr. Robert M. Hendrick 5022 County Road 48 Okahumpka, Florida 34762 Peter S. Fleitman, Esquire Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668
Findings Of Fact Winn-Dixie. Winn-Dixie is a Florida corporation with its principal offices at 5050 Edgewood Court, Post Office Box B, Jacksonville, Florida. [Stipulation of Facts]. Winn-Dixie's taxpayer identification number is 59-0514290. The Department's audit number is 88-04203785035. Winn-Dixie's fiscal year ends on the last Wednesday of June. Winn-Dixie's Intangible Tax Returns. Winn-Dixie has filed a Florida intangible tax return for every year beginning with the calendar year 1972. For calendar years 1972 through and including 1988, Winn-Dixie reported the value of its intangible personal property based upon the value of its intangible personal property at the end of its previous fiscal year, the last Wednesday of June. For example, in its 1972 intangible tax return Winn-Dixie reported the value of its intangible personal property as of June 26, 1971. The decision to use the value of its intangible personal property as of the end of its fiscal year for Florida intangible tax was made by Winn-Dixie without any direction from, or communication with, the Department. When Winn- Dixie began using its fiscal year end as the date to value its intangible personal property for Florida intangible tax purposes, no representation concerning the appropriateness of this method was made by the Department. Winn- Dixie made no effort to obtain approval of its method of valuation from the Department. Winn-Dixie indicated on each of its intangible tax returns for 1972 through 1988, that it had determined the value of its intangible personal property based upon its value as of the end of Winn-Dixie's fiscal year. Winn-Dixie used the fiscal year end value of its intangible personal property as the value of those assets for Florida intangible tax purposes for administrative convenience. It was easier to use such data than it would have been to redetermine the value of its intangible personal property at the end of each calendar year. When Harry Francis began working for Winn-Dixie in 1978, Mr. Francis was aware that Florida law required that intangible personal property be valued as of the first day of the calendar year. Mr. Francis, who served as director of taxes for Winn-Dixie until 1989, was also aware that Winn-Dixie was using the incorrect valuation date to value its intangible personal property for Florida intangible tax purposes. When Leon Calvert became the director of taxes for Winn-Dixie in 1989, Mr. Calvert was aware that Florida law required that intangible personal property be valued as of the first day of the calendar year. Mr. Calvert was also aware that Winn-Dixie was using the incorrect valuation date to value its intangible personal property for Florida intangible tax purposes. The explanations Mr. Francis and Mr. Calvert gave for not changing Winn-Dixie's method of valuing its intangible personal property for Florida intangible tax purposes were not credible. Both Mr. Francis or Mr. Calvert indicated that the valuation practice of Winn-Dixie was followed, in part, because of the need for consistency in the field of accounting. Neither Mr. Francis or Mr. Calvert, however, cited any generally accepted accounting principle to support the use of an incorrect method of valuing assets for tax purposes when that method is clearly contrary to law. Winn-Dixie does not collect intangible tax as an agent for the State of Florida by separately stating and passing along said tax to its customers. [Stipulation of Facts]. Therefore, Winn-Dixie has not lost any right to pass the asserted additional intangible tax liability along to others. Subsequent to the audit involved in this case Winn-Dixie prepared an analysis of the difference in the value of its intangible personal property for 1972 through 1984 and the value of its intangible personal property for 1972 through 1984 if it had valued its intangible personal property as of January first of each year. Based upon this analysis, Winn-Dixie over reported the value of its intangible personal property by $78,390,211.00 for the period from 1972 through 1984. [See Stipulation of Facts]. This amounted to an overpayment of taxes of approximately $81,485.00. Winn-Dixie has not filed any claim for refund of any amount of intangible taxes it may have overpaid as a result of using the value of its intangible personal property as of the end of its fiscal year. The weight of the evidence failed to prove that the value of Winn- Dixie's intangible personal property as of the end of its fiscal year for any year for which it has filed an intangible tax return was approximately the same as the "just value" of those assets as January first. 1972 and 1973 Intangible Tax Returns. Winn-Dixie's intangible tax returns for calendar years 1972 and 1973 were examined by the Department. [Stipulation of Facts]. Winn-Dixie's 1972 and 1973 returns clearly indicated that the value of the assets included in the returns was the value as of the last Wednesday of June as of the previous year, Winn-Dixie's fiscal year end. No changes to Winn-Dixie's valuation method were recommended by the Department to Winn-Dixie's 1972 or 1973 intangible tax returns. The weight of the evidence failed to prove that any Department employee made any statements as a result of the Department's audit of the 1972 and 1973 returns to Winn-Dixie concerning Winn-Dixie's use of the value of its intangible personal property as of the end of its fiscal year to determine its intangible tax liability. The weight of the evidence failed to prove that any representation was made to Winn-Dixie by a Department employee that it was okay to use the June value of Winn-Dixie's intangible personal property even if that value was not the same as the January first value of Winn-Dixie's intangible personal property. Therefore, it is possible that the Department made no adjustments to Winn-Dixie's 1972 and 1973 returns because of a determination that the value of Winn-Dixie's intangible personal property in January was not materially different from the June value of its intangible personal property as reported by Winn-Dixie. Such a conclusion is consistent with Harry Francis' belief that there was not much difference in the value of Winn-Dixie's intangible assets at any time during the year. [See Transcript of Formal Hearing, page 90, lines 9- 12]. The weight of the evidence also failed to prove that any representation was made to Winn-Dixie as a result of the audit of the 1972 and 1973 returns by a Department employee concerning the filing of future year intangible tax returns. 1979, 1980 and 1981 Intangible Tax Returns. Winn-Dixie's intangible tax returns for calendar years 1979, 1980 and 1981 were examined by the Department. [Stipulation of Facts]. The auditor that performed the examination is now deceased. [Stipulation of Facts]. The director of taxes for Winn-Dixie at the time of the audit of the 1979, 1980 and 1981 returns described a conversation he had with the Department's auditor as follows: The gist of the conversation was why did we use the June year end instead of January 1st. And the answer was as I said before, it was a long-standing practice, it was a consistency method, it was not a question of cherry picking for a good date and it seemed to do no harm. The recollection I have is that he was hesitant to make a determination on his own as to whether he required an adjustment or required a recomputation using a different date and that he was checking with some unknown superior in the Department of Revenue and later the no-change audit resulted. I don't recall if he ever called me about his conversation with the superiors, but I do recall no adjustments of any kind were made to any of those tax returns. And I would have recalled. I was nervous about those because I had prepared them. And they were the first ones that had been audited since I had been there. So I was relieved that no adjustments were made. And that was the gist of my relationship with the auditor. [Transcript of Formal Hearing, page 94, lines 17-25, and page 95, lines 1-12]. No changes were recommended by the Department to Winn-Dixie's 1979, 1980 or 1981 intangible tax returns. [Stipulation of Facts]. The weight of the evidence, however, failed to prove why the Department made no changes. Winn-Dixie did not change its method of reporting its intangible personal property as a result of any representations from a Department employee. The weight of the evidence failed to prove that any Department employee made any statements to Winn-Dixie as a result of the Department's audit of the 1979, 1980 and 1981 returns concerning Winn-Dixie's use of the value of its intangible personal property as of the end of its fiscal year to determine its intangible tax liability. The weight of the evidence failed to prove that any representation was made to Winn-Dixie by a Department employee that it was okay to use the June value of Winn-Dixie's intangible personal property even if that value was not the same as the January first value of Winn-Dixie's intangible personal property. Therefore, it is possible that the Department made no adjustments to Winn-Dixie's 1979, 1980 and 1981 returns because of a determination that the value of Winn-Dixie's intangible assets in January was not materially different from the June value of its intangible personal property as reported by Winn- Dixie. Such a conclusion is consistent with Harry Francis' belief that there was not much difference in the value of Winn-Dixie's intangible assets at any time during the year. [See Transcript of Formal Hearing, page 90, lines 9-12]. The weight of the evidence also failed to prove that any representation was made to Winn-Dixie as a result of the audit of the 1979, 1980 and 1981 returns by a Department employee concerning the filing of future year intangible tax returns. 1985, 1986, 1987 and 1988 Intangible Tax Returns. The Department performed an audit of Winn-Dixie's intangible tax returns for 1985, 1986, 1987 and 1988. For these tax years Winn-Dixie valued its intangible personal property as of the end of the fiscal year preceding the taxable year, consistent with prior years. As a result of the Department's audit of the 1985, 1986, 1987 and 1988 returns, the Department determined that Winn-Dixie had underpaid Florida intangible tax in the following amounts and issued an assessment for same: 1985 $(16,244.00) 1986 21,471.00 1987 93,980.00 1988 86,974.00 Total $186,181.00 The Department's auditor who performed the audit of Winn-Dixie's 1985, 1986, 1987 and 1988 tax returns determined the value of Winn-Dixie's intangible personal property based on the value of those assets as reasonably close to January first as provided to Winn-Dixie. The information provided by Winn-Dixie was reasonably close to the value of Winn-Dixie's intangible personal property as of January first. Winn-Dixie filed a Petition for Reconsideration dated August 24, 1990. By letter dated October 17, 1990, the Department issued a Notice of Reconsideration. [Stipulation of Facts]. Other Receivables. Winn-Dixie has taken the position that it overpaid intangible taxes for 1985, 1986, 1987 and 1988 because it incorrectly treated certain accounts as intangible personal property. The parties agreed that the amount of tax paid on these accounts for the years at issue was as follows: 1985 $ 8,614.00 1986 9,823.00 1987 11,120.00 1988 13,562.00 Total $43,119.00 The parties agreed that the amount of intangible tax paid on the accounts at issue should be refunded to Winn-Dixie if it is determined that Winn-Dixie improperly paid intangible tax on the accounts. The following are the accounts which Winn-Dixie has argued it should not have treated as intangible personal property: Account Number 123-2, perishable vendors- billed outside sales warehouse invoices. Account Number 123-3, vendors debit balances/billed advertising coupons, vendor freight claims, promotion allowances, billings, return merchandise, charges and other debit memo billings. Account Number 123-4, claims insurance and freight/insurance and freight claims against carriers. Account Numbers 123-2, 123-3 and 123-4 are listed as "receivables" on Winn-Dixie's federal income tax return balance sheet as of its fiscal year end, Winn-Dixie's accounts receivable trial balances and on Winn-Dixie's SEC public disclosure forms 10-K. Account Numbers 123-2 and 123-3 are essentially identical except for the type of vendor involved. Account Number 123-2 involves vendors of perishable products and Account Number 123-3 involves vendors of nonperishable products. Winn-Dixie strives to pay for merchandise it receives within seven to ten days from the date it receives an invoice for the merchandise in order to receive discounts and the best merchandise available. Winn-Dixie earns trade discounts, promotional allowances and volume discounts on some of the merchandise it handles. When Winn-Dixie pays an invoice on merchandise for which it may receive such reductions in costs, Winn- Dixie may not know the exact amount of the discount. Therefore, it pays the entire amount invoiced. As a result of the quick payment of invoices and the inability to calculate the exact amount of discounts or other reductions in the amount owed, Winn-Dixie pays more on some invoices than it ultimately may owe on the invoice. The amount of any estimated overpayments is reflected in Account Numbers 123-2 and 123-3. Winn-Dixie also receives coupons from customers on certain merchandise. The coupons received by Winn-Dixie entitle it to reimbursement on the product sold from the vendor. The amount which Winn-Dixie will ultimately receive for the coupons is also recorded in Account Numbers 123-2 and 123-3. The coupons are ultimately turned over to a coupon handling firm which pays Winn-Dixie for the coupons. Account Number 123-4 involves claims insurance and freight. It is similar to the other two accounts at issue except that it relates primarily to claims against railroads for misdelivery or damaged merchandise which Winn-Dixie is entitled to. As is true of other merchandise, Winn-Dixie strives to pay for merchandise shipped to it by rail within seven to ten days to be entitled to the discounts for quick payment. Therefore, Winn-Dixie is not always able to estimate the amount of damaged or missing merchandise it may be entitled to a reduction for. The amount of such reductions are reflected in Account Number 123-4. When the amounts owed to Winn-Dixie, which are reflected in Account Numbers 123-2, 123-3 and 123-4, are finally determined, Account Number 123-2, 123-3 or 123-4 is debited and the amount received is recorded in another account. The amounts recorded in Account Numbers 123-2, 123-3 and 123-4 are valued, recorded and returned for tax purposes as accounts receivable. Account Numbers 123-2, 123-3 and 123-4 are "accounts receivable" under generally accepted accounting principles. The weight of the evidence failed to prove that all of the amounts recorded in Account Numbers 123-2, 123-3 and 123-4 during the years in question were not due at the time they were entered in the accounts. Therefore, the weight of the evidence failed to prove what portion of Account Numbers 123-2, 123-3 or 123-4 are contingent.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department issue a Final Order assessing $186,181.44 in additional intangible tax, plus interest, against Winn-Dixie for 1985, 1986, 1987 and 1988, and dismissing Winn-Dixie's Petition for Administrative Proceedings. RECOMMENDED this 8th day of May 1991, in Tallahassee, Florida. LARRY J. SARTIN 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 8th day of May, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-8021 The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. Winn-Dixie's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1 2-4 and 6. 2 6. 3 15 and 17. 16. See 18-20 and 30. The last sentence is not supported by the weight of the evidence. 21 and 23. The last sentence is not relevant. See 22. The last sentence is not relevant. Not relevant. Not supported by the weight of the evidence. 9 12. Not supported by the weight of the evidence. 12. The last sentence is not supported by the weight of the evidence. Not supported by the weight of the evidence. Not supported by the weight of the evidence. The last sentence is not relevant. 14 32-33, 35 and 40. 15 34. Not relevant. See 36 and 41. The weight of the evidence failed to prove that Winn- Dixie was "required to pay" its vendors within seven to ten days. 37-38. The weight of the evidence failed to prove the last sentence. 19 40-41. 20 42. 21 Not supported by the weight of the evidence. The Department's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1 and 3. 2 and 4. 3 5. 4 7. 5 15 and 21. 6 28. 7 4. 8-9 29. 10-11 11. 12 22. 13 22 and 25-27. 14 24. 15 22. 16 18-20 and 25-27. 17 5. 18 21. 19 12. 20 13. 21 14. Not relevant. See 45. 24 35 and 40. 25 37-38 and 43. 26 39. 27 Not relevant. 28 32. 29 See 44. 30 34. COPIES FURNISHED: Thomas K. Purcell, Esquire Suite 1235, One Enterprise Center 225 Water Street Jacksonville, Florida 32211 Leonard F. Binder Kevin O'Donnell Assistant Attorneys General Department of Legal Affairs Tax Section, Capitol Building Tallahassee, Florida 32399-1050 J. Thomas Herndon, Executive Director Department of Revenue 104 Carlton Building Tallahassee, FL 32399-0100
The Issue The issue in the case is whether the allegations of the Administrative Complaint for Revocation of Certification of Registration are correct.
Findings Of Fact At all times material to this case, the Respondent operated a used car dealership at 1014 West Central Boulevard, Orlando, Florida, 32805. At all times material to this case, the Respondent's registered corporate agent was identified as Jennifer Hamilton, 3517 Domino Drive, Orlando, Florida, 32805. Florida law requires specified persons conducting business within the state to register with the Petitioner and to obtain a certificate of registration essentially for purposes of tax collection. As a dealer, the Respondent was required to register with the Petitioner and received Certificate of Registration No. 58-8011915294-5 from the Petitioner. As a dealer, the Respondent was required to collect sales and use taxes from purchasers and to submit monthly tax returns and collected taxes to the Petitioner. The Respondent filed proper tax returns, but failed to remit taxes received for the following months: September 2004, October 2004, December 2004, January 2005 through October 2005, December 2005, March 2007 through July 2007, and September 2007 through December 2007. The unremitted taxes totaled $21,194.32. Based on the Respondent's failure to remit the taxes, on July 22, 2008, the Petitioner assessed a penalty of $3,271.64 pursuant to Subsection 212.12(2), Florida Statutes. Based on the Respondent's failure to remit the taxes, the Petitioner assessed interest charges of $4,304.62 (as of July 22, 2008) pursuant to Subsection 212.12(3), Florida Statutes. The interest charges continue to accrue until they are paid. The Respondent failed to file tax returns for the months of January 2008 through July 2008. Pursuant to Subsection 212.12(5), Florida Statutes, the Petitioner assessed an estimated tax liability of $3,500.00 against the Respondent. Pursuant to Subsection 212.15(4), Florida Statutes, the Petitioner has recorded warrants in the public records of Orange County, Florida, for the unpaid taxes. Pursuant to Subsection 212.18(3)(d), Florida Statutes, the Petitioner issued a Notice of Conference of Revocation of Certificate of Registration dated July 30, 2008, and an informal conference was conducted on September 4, 2008. No one appeared at the conference on behalf of the Respondent. The Petitioner thereafter filed the Administrative Complaint underlying this proceeding.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Petitioner enter a final order revoking the certificate of registration held by the Respondent. DONE AND ENTERED this 3rd day of March, 2009, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM 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 3rd day of March, 2009.
The Issue The issues in this case are whether Respondent failed to remit taxes, interest, penalties, and fees pursuant to a Compliance Agreement between Respondent and Petitioner; and, if so, whether Petitioner should revoke Respondent's sales tax registration certificate in consequence thereof.
Findings Of Fact Petitioner Department of Revenue ("Department") is the agency of state government authorized to administer the tax laws of the State of Florida. Respondent Servers, Inc. ("Servers") is a Florida corporation whose principal place of business is located in Plantation, Florida. Servers sells tangible personal property at retail and consequently is required to collect from its customers, and remit to the Department, sales tax on every transaction which is taxable under Chapter 212, Florida Statutes. In connection with this responsibility, Servers is an authorized "dealer," holding a sales tax certificate of registration numbered 16-8012479332-4 (the "Certificate"), which the Department issued on May 11, 2002. On May 2, 2008, the Department issued a notice to Servers, which initiated a proceeding to revoke Servers' Certificate for failure to remit taxes. Servers was invited to appear at an informal conference with the Department on June 18, 2008. At the informal conference, Servers would have the opportunity to avoid revocation either by presenting evidence refuting the charges regarding unpaid taxes, or by entering into a compliance agreement pursuant to which the outstanding liability would be satisfied. The informal conference took place as scheduled. Bruce Drumm, Servers' president, appeared on behalf of the corporation. At the conference, the Department and Servers entered into a written compliance agreement (the "Agreement"). Under the Agreement, Servers admitted that it owed the State of Florida a grand total of $10,868.60, a sum which comprised $8,453.45 in unpaid taxes, $1,557.86 in interest, fees in the amount of $40.00, and a penalty of $817.29. Servers agreed to pay its debt in installments, in exchange for the Department's promise to forbear from revoking Servers' Certificate. The Agreement called for Servers to make a down payment of $1,500 on June 25, 2008, followed by six monthly payments in the respective amounts of $750 (July through October) and $1,200 (November and December), due on specific dates beginning July 16, 2008, and ending December 16, 2008. The balance remaining after Servers' payment of $6,900 pursuant to foregoing schedule was "to be renegotiated on December 16, 2008." The Agreement did not provide that time was of the essence with regard to Servers' duty to make the installment payments, nor was there a grace period applicable to the payment deadlines. The Agreement did, however, state as follows: E. If the certificate holder fails to comply with any obligation under this agreement, the Department has the right to initiate revocation procedures by filing an Administrative Complaint, with a copy to the certificate holder, but without further notice to the certificate holder of the default. In the event of an action to revoke the certificate the Department shall introduce this Agreement into evidence as proof of the facts recited herein. * * * G. If the certificate holder fails to perform any of the obligations under this agreement, including the timely filing of returns and payment of all taxes, penalties and interest as they become due, all amounts of the tax, interest and penalty settled under this agreement and any unpaid balance shall be immediately due and payable and collectible by all legal means. In addition to promising to pay the outstanding indebtedness, Servers agreed: To accurately complete all past due sales tax returns and file them no later than Due date. To remit all past due payments to the Department as stated in the attached payment agreement. To accurately complete and timely file all required sales tax returns for the next 12 months, beginning with the period 07/2008 through 06/2009. To timely remit all sales tax collections due for the next 12 months, associated with the periods stated above. To comply with all other provisions of Chapter 212, Florida Statutes. Servers delivered each of the seven scheduled payments to the Department, fulfilling this particular financial obligation. Two of the payments (for October and December, respectively), however, were tendered on the next day after the due date, and one payment (September) was tendered on the second day after the due date. The Department accepted these late payments. The Department claims that each of these brief delays in performance on Servers' part amounted to a substantial violation of the Agreement. It alleges also that Servers further breached the Agreement by filing late returns for July and September 2008, and by being overdue in payment of taxes for the months of October and November 2008. Of these additional alleged breaches, only one was clearly proved. Based on the evidence presented, the undersigned finds that Servers' payment of the taxes due in November 2008 was delinquent. The proof of Servers' delinquency came in the form of an admission, which was offered against Servers during the cross- examination of the Department's sole witness, Tara Teague Schaffner. The damaging testimony, in other words, was elicited not by the Department, but by Servers' representative, Mr. Drumm. The admission, moreover, was memorialized in the Department's business records, from which Ms. Schaffner (in response to Mr. Drumm's questions) read lengthy excerpts out loud, thereby "publishing" the contents of the Department's internal documents into the evidentiary record of this proceeding. The business records from which Ms. Schaffner quoted were not offered into evidence. That the Department's records constituted "business records" for purposes of the business-records exception to the hearsay rule was established through Mr. Drumm's interrogation of Ms. Schaffner. Prompted by Mr. Drumm's questioning, Ms. Schaffner testified credibly, and the undersigned finds, that the Department's file on Servers contains, among other things, notes concerning conversations with the taxpayer, which were made contemporaneously, in the performance of a regular business activity, by a person with knowledge of the conversations, and which were kept in the regular course of the Department's business. For reasons that will be discussed below, the undersigned has concluded that the contents of the Department's business records, though presented in an unusual manner, nevertheless constitute admissible evidence which clearly and convincingly proves that Servers committed at least one material breach of the Agreement, namely being delinquent with regard to payment of taxes due in November 2008. To facilitate the forthcoming analysis of the admissibility of the dispositive evidence, and to show the basis for the finding that Servers breached the Agreement, the critical testimony is quoted here: Q [by Mr. Drumm] And do you [i.e. the Department] have any comments [in your records] regarding the 12/16 payment [for which the schedule in the Agreement provided]? A [by Ms. Schaffner] We have a note on the 17th of December [2008]. It says received stip payment due December 16th, twelve hundred dollars, hand delivered on December 17th. Q Are there any comments in the notes regarding my request to negotiate the balance due at that time? A On the 21st it says that Ms. Aboite [an employee of the Department] called you. She spoke to Bruce Drumm, the owner, reference delinquency for October and November 2008. He said that the return of payment was mailed yesterday for November and December 2008, informed him about the payment for October, stated he claimed to check the records and call me back. Advised he was informed all current returns should be mailed to the Hollywood Service Center for the 12th month, informed Mr. Drumm stip payment late, was due on December 17th. T. 44-45 (emphasis added). There are, to be sure, some discrepancies in Ms. Schaffner's testimony, which might be attributable to her misreading of information contained in the Department's records, or to inaccuracies in the entries themselves. For example, the "21st" of December 2008, which is when Ms. Aboite reportedly called Mr. Drumm——assuming the referenced month was December—— fell on a Sunday. While it is possible that Ms. Aboite transacted official business on Sunday, December 21, 2008, the undersigned doubts that such occurred, and declines to so find. The undersigned does find, however, that the conversation recorded in the notes took place around (and most likely after) December 17, 2008. This much is clear from the context of the comments. Ms. Schaffner's testimony, after all, came in response to a question of Mr. Drumm's inquiring about his request to negotiate with the Department "at that time," meaning the period of December 16-17, 2008. Similarly, the comment that the payment "was due" on December 17, 2008, is not correct. The payment was due on December 16 and was received by the Department on December 17, 2008. These facts are not disputed. Either the witness, or the maker of the notes from which the witness read, was mistaken. These are minor points, however, that ultimately do not seriously discredit Ms. Schaffner's testimony that, according to the Department's records, Servers' owner, Mr. Drumm, admitted on or about December 17, 2008, having just recently (the day before) mailed the tax payment due in November 2008. That payment (as will be discussed below) was delinquent as a matter of law if it were mailed after November 20, 2008—— which Mr. Drumm plainly admitted was the case. In sum, whatever other defaults under the Agreement Servers might have committed, the established fact is——as the evidence clearly and convincingly proves——that Servers failed to timely remit all sales tax collections due in November 2008. This failure was a material and substantial breach of the Agreement.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order revoking sales tax certificate of registration numbered 16- 8012479332-4, which the Department issued to Servers, Inc., on May 11, 2002. DONE AND ENTERED this 31st day of July, 2009, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM 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 31st day of July, 2009.
The Issue The issue is whether Petitioner is liable for the sales and use tax assessment issued by Respondent on February 21, 1995.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: In this proceeding, Respondent, Department of Revenue (DOR), has issued a proposed sales and use tax assessment in the amount of $24,546.54, plus $6,640.12 in penalties, plus interest from the date of the assessment, against Petitioner, Florida Truck Dock Company (Petitioner or taxpayer). As of March 20, 1997, the assessment totaled $55,195.27, and it continues to increase by $8.07 each day. The assessment constitutes taxes, penalties, and interest allegedly due from Petitioner for various materials and supplies purchased by Petitioner for use in the performance of real property contracts for Petitioner's customers. In its response to the assessment, Petitioner denied that it owed the money. Petitioner's business activities consisted primarily of purchasing truck loading dock equipment from suppliers, principally Kelly Company, Inc. (Kelly), and then installing such equipment as an improvement to real estate. Its records indicate that purchased equipment was generally brought into Florida and installed in real property in the state under a contract whereby parts and labor were furnished for one lump sum contract price. The foregoing contracts were Class A or lump sum contracts within the meaning of Rule 12A-1.051(2)(a), Florida Administrative Code. Class A contracts are considered contracts for the improvement of real estate, not contracts for the resale of tangible personal property. In addition, when the equipment was purchased, Petitioner had not issued resale certificates to its vendors. Under these circumstances, Petitioner was properly treated as an end-user of the equipment in question and owed use taxes on all such purchases of tangible personal property. This controversy began on March 30, 1992, when DOR issued a Notification of Intent to Audit Books and Records of the taxpayer in conjunction with a routine audit. The notice requested that Petitioner make available various corporate records pertaining to its sales and use tax and intangible tax liability. However, only the sales and use tax is in issue here. DOR later advised the taxpayer that the audit period would run from March 1, 1987, through February 29, 1992, and that instead of a detailed audit, only a three-month sampling of the full audit period would be necessary. An initial audit revealed that Petitioner was entitled to a refund. None was given, however, because of information supplied by an employee of the taxpayer regarding the possible destruction and alteration of certain records by the taxpayer, and the auditor's conclusion that a three-month sampling of the records was not representative for the full five-year audit period. In addition, the auditor concluded that the results of the sample period were not reasonable. For these reasons, the scope of the audit was expanded. The auditor then requested, among other things, that copies of all sales (summary) journals for the entire five-year period be produced. Although Petitioner has always contended that these journals were merely "commission" journals for transactions between its vendors and customers, the auditor's finding that they are records of cash transactions is consistent with the language on the face of the journals, referring to "deposits" and "total deposits." Further, a comparison of the journals with Petitioner's own bank statements confirms this finding. At least twelve months of the records were missing, and the taxpayer agreed to recreate the missing records. Once a copy of all journals (both original and recreated) was produced, the auditor tested their validity and then made various audit adjustments, which are reflected on Schedule A-2 of Exhibit 5. In those instances where inadequate cost price information concerning equipment purchases was provided by the taxpayer, the auditor properly used estimates in making his adjustments. The tax liability for each taxable transaction was recorded by the taxpayer under Account 367 on the sales journals. The auditor then examined the source documents (original invoices) to verify the accuracy of the recorded amounts. These numbers were then compared with the taxes paid by the taxpayer on its monthly tax returns filed with DOR. This comparison produced a deficiency which represents approximately 75 percent of the total assessment. However, in those instances where Petitioner collected sales tax from its customers, and remitted the same to DOR, Petitioner was not assessed with a tax for those same items. A sampling of the audit period established that Petitioner also had a number of lump-sum contracts with various governmental customers on which it neither paid taxes to the vendor when the equipment was purchased, nor did it collect taxes from the end-user when the equipment was resold. Thus, it was responsible for the use taxes on these transactions. The deficiency is detailed on Schedule B-3 of the final audit report (Exhibit 6), and it accounts for approximately 14 percent of the total assessment. The remaining part of the assessment is related to four miscellaneous transactions which are unrelated to the sales journals. Two of the transactions occurred during the short period of time when the service tax was in effect in 1987, while the remaining two relate to small purchases of equipment and supplies by the taxpayer for its own consumption. There was no evidence that the taxpayer paid the taxes due on these transactions. DOR met with the taxpayer, its accountant, and its original counsel on various occasions in an effort to obtain more documentation favorable to the taxpayer's position. In most cases, the taxpayer refused to provide more records. At one meeting, however, the taxpayer produced additional source documents (invoices) that appeared to be altered from the original invoices previously given to the auditor. These are shown in Exhibit 7 received in evidence. When asked by the auditor for copies of the same invoices sent to customers so that the discrepancy could be resolved, the taxpayer refused to comply with this request. During the audit process, the taxpayer contended that its primary supplier, Kelly, had already paid taxes on a number of the transactions. No documentation was produced, however, to support this contention. It also complained that there was bias on the part of DOR's auditor. As to this contention, the record shows that the auditor had no relationship with the taxpayer prior to this audit, and for the intangible personal property tax, the auditor's field work actually resulted in a refund for Petitioner. Finally, the taxpayer contended that rather than using the originally supplied records, the auditor should have used Petitioner's recreated or altered records in making the audit adjustments. This latter contention has been rejected.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Revenue enter a final order sustaining its original assessment against Petitioner. DONE AND ENTERED this 13th day of November, 1998, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 Filed with the Clerk of the Division of Administrative Hearings this 13th day of November, 1998. COPIES FURNISHED: Linda Lettera, Esquire Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Jeffrey M. Dikman, Esquire Department of Legal Affairs The Capitol, Tax Section Tallahassee, Florida 32399-1050 Benjamin K. Phipps, Esquire Post Office Box 1351 Tallahassee, Florida 32302 L. H. Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
The Issue The parties stipulated that the following legal issues were presented on the facts: When the taxpayer fails to claim the tax credit for sales tax on bad debts charged off during the month for which the return is filed as permitted by Section 212.17(8) Florida Statutes, may the taxpayer claim a refund of the overpayment pursuant to Section 215.26, Florida Statutes? Does claiming a bad debt credit on a return for a month later than the month in which the charge-offs were made constitute an "application for refund" within the meaning of Section 215.26(2), Florida Statutes? STIPULATIONS The parties entered into a written stipulation of the issues, of the facts, and stipulated to the introduction into evidence of the attachments to the written stipulation of facts and the Exhibits 1 through 6. The following are the pertinent findings of fact in this case.
Findings Of Fact Causeway Lumber Company, Inc., (Causeway) is a Florida corporation engaged in the sale of lumber and building materials. During the years 1973- 1977 it operated two yards; one at 2701 South Andrews Avenue, Fort Lauderdale, Broward County, and one and 400 Northwest 2nd Avenue, Boca Raton, Palm Beach County. Because it operated in two counties, separate tax returns were filed for the Fort Lauderdale yard and the Boca Raton yard. Causeway uses the accrual method of accounting, the specific charge-off method of writing off bad debts, and its fiscal year ends March 31. Causeway did not collect the sales tax on credit sales at the time such sales were made, but billed sales tax to its customers as part of the credit sales. Although the sales taxes were not received by Causeway at the time the credit sales were made, Causeway reported and paid the sales tax on credit sales on the return for the month in which the sale was made as required in Section 212.06, Florida Statutes. In March of 1974, 1975, and 1976 the accounts receivable were reviewed and the account deemed worthless were written off as uncollectable and so reported on the corporation's income tax returns for those years. Causeway attempted to take as a credit in September of 1976 all of the bad debts written off in March of 1974, 1975 and 1976. The taking of this credit was questioned by the Comptroller, and Causeway paid the taxes due on the September 1976 sales tax remittance and then filed an application for refund on January 20, 1978, pursuant to provisions of Section 215.26, Florida Statutes. The Comptroller denied the application for refund stating as the grounds that there was no authority in Section 212.17, Florida Statutes, for a refund. Causeway's two outlets overpaid sales taxes in the following amounts in the years indicated: 1974 1975 1976 Boca Raton $ 1,072.51 $ 9,208.17 $ 30,477.11 Ft. Lauderdale 3,323.15 10,237.33 10,004.22 $ 4,395.66 $ 19,445.50 $ 40,481.33
Recommendation Based upon the foregoing findings of fact and conclusions of law, the Hearing Officer recommends to the Comptroller that the taxpayer be refunded the taxes overpaid in 1975, and 1976, in the total amount of $59,926.83. DONE and ORDERED this 9th day of October, 1978, in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of October, 1978. COPIES FURNISHED: Richard W. Roe 2900 East Oakland Park Boulevard Fort Lauderdale, Florida 33306 Harold F. X. Purnell Assistant Attorney General The Capitol, Room LL04 Tallahassee, Florida 32304 Eugene J. Cella General Counsel Office of the Comptroller The Capitol Tallahassee, Florida 32304 =================================================================
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
Findings Of Fact 1. After an audit, the Department issued a Notice of Proposed Assessment (‘NOPA’) to Dever, Inc. (“Dever”) on April 7, 2009, finding Dever liable for additional documentary stamp taxes, plus interest. 2. Dever informally protested the Department’s NOPA as permitted by Department rules, and the Department issued a Notice of Decision on March 25, 2010, and, subsequently, a Notice of Reconsideration on July 23, 2010. The Notice of Reconsideration set forth the Department's final position regarding. the documentary stamp taxes assessed against Dever. Filed November 1, 2011 4:14 PM Division of Administrative Hearings © 3. The Notice of Reconsideration included a section titled “Taxpayer Appeal Rights,” which explained that the Notice of Reconsideration constituted the final decision of the department, prior to court action or administrative proceedings, and that, pursuant to Section 72.011, Florida Statutes, no court action or administrative proceeding could be brought to contest the assessment after sixty (60) days from the date of the assessment. This section further stated, in regard to any request for administrative hearing, Pursuant to Sections 72.011, 120.569, 120.57, and 120.80(14), F.S., and Rule Chapter 12-6, F.A.C., you may contest the assessment in an administrative forum by filing a _ petition for a Chapter_120 administrative hearing with the Department of Revenue, Office of General Counsel, Post Office Box 6668, Tallahassee, FL 32314-6668. THE PETITION MUST BE RECEIVED BY THE DEPARTMENT WITHIN SIXTY (60) DAYS OF THE DATE OF THIS NOTICE OF RECONSIDERATION. . . . The requirements of Section 72.011(2) and (3)(a), F.S., are jurisdictional for any action contesting an assessment or refund denial under Chapter 120, F.S. See id. at 5. (capitalization in original). 4. Dever did not file a petition or court action within 60 days of the July 23, 2010, Notice of Reconsideration, to contest the tax assessment. On or about January 18, 2011, the Department issued a Notice of Intent to Levy (“Intent to Levy”) on certain bank accounts held by Dever. 5. On or about January 21, 2011, Dever filed a one-page letter with the Department stating that it was “a petition/request for an administrative hearing.” This petition was dismissed, with leave to amend, for failure to comply with Chapter 120, Florida Statutes, and Rule 28-106.201, Florida Administrative Code. O 6. On March 23, 2011, Dever filed its “Amended Petition For Reconsideration” (“Petition”), which resulted in the instant proceeding. The Petition, however, did not dispute any material facts regarding the Department's Intent to Levy. Neither did the Petition provide any legal basis to contest the levy. Instead, the Petition sought to challenge the underlying basis for the assessment of the documentary stamp taxes, as set forth in the Notice of Reconsideration. 7. The Department, pursuant to Rule 28-106.204, Florida Administrative Code, moved for entry of an order relinquishing jurisdiction back to the Department for entry of a final order of dismissal. The Department asserted that the Division was " without jurisdiction over the matter. Dever did not file a response in opposition. The Division entered an order on August 29, 2011, granting the Department’s Motion to Dismiss, and it relinquished jurisdiction back to the Department. 8. Dever did not file any exceptions or otherwise challenge the order of the Division.
Conclusions This cause came before the State of Florida, Department of Revenue ("Department"), for the purpose of issuing a final order.
Other Judicial Opinions Any party who is adversely affected by this final order has the right to seek judicial review of the order under section 120.68, Florida Statutes, by filing a notice of appeal under Rule 9.190 of the Florida Rules of Appellate Procedure with the Agency Clerk of the Department of Revenue in the Office of the General Counsel, Post Office Box 6668, Tallahassee, Florida 32314-6668 [FAX (850) 488-7112], AND by filing a copy of the notice of appeal accompanied by the applicable filing fees with the District Court of Appeal, First District or with the District Court of Appeal in the appellate district where the party resides. The notice of appeal must be filed within 30 days from the date this order is filed with the clerk of the Department. C) NY COPIES FURNISHED : Hon. Diane Cleavinger Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 Timothy E. Dennis, Esquire Office of the Attorney General The Capital, Plaza Level 01 400 South Monroe Street Tallahassee, Florida 32399-1050
