The Issue The issues for determination are whether Petitioner paid sales and use tax on rental income from transient housing in Osceola and Polk counties, and whether Petitioner paid sales and use tax on the purchase of fixed assets in accordance with the requirements of Sections 212.03 and 212.06, Florida Statutes (1995). (Statutory references are to Florida Statutes (1995) unless otherwise stated.)
Findings Of Fact Petitioner is a Florida corporation with its principal place of business located at 3501 West Vine Street, Suite 387, Kissimmee, Florida. Petitioner primarily engages in the business of renting and managing transient property in the Orlando-Disney World area for absentee owners. Respondent is the state agency responsible for the administration of the Florida sales and use tax pursuant to Section 213.05. Respondent selected Petitioner for audit because Petitioner filed several sales and use tax returns reporting no taxable income (zero returns). Zero returns are unusual for a tourist-based business in the Orlando-Disney area. Osceola County, Florida (Osceola), also audited Petitioner for the period December 1994 through December 1999. Osceola is a political subdivision of the state and is responsible for administering and assessing the Tourist Development Tax authorized in Section 212.03 and Section 13-16, Osceola County Code of Ordinances (Code). Osceola audited Petitioner because Petitioner failed to file any tax returns with Osceola. Osceola correctly assessed Petitioner $394,378.39 for tax, penalty, and interest. The mathematical computations in the Osceola audit are correct. Osceola conducted its audit in accordance with generally accepted auditing principals. The Osceola audit revealed that Petitioner began doing business on January 1, 1995, but reported that it began doing business on both November 16, 1999, and March 12, 1998. The Osceola audit revealed that Petitioner failed to maintain required tax records, including guest registration forms; cash receipts; a general ledger; and documents necessary to verify amounts reported in tax returns. Petitioner did not reconcile its bank statements and did not maintain records necessary to verify that all receipts from guest registrations were properly entered into Petitioner's computer system of record keeping. Respondent began its audit on January 8, 2001. However, Respondent was unable to examine most of Petitioner's books and records due to a lack of cooperation from Petitioner. Respondent made several attempts to obtain Petitioner's books and records, but Petitioner provided Respondent with only consumable purchase invoices. Respondent and Osceola have an agreement to share information. Respondent relied on information obtained by Osceola in the course of the Osceola audit. Osceola provided Respondent with copies of Osceola's work papers including a spreadsheet of undeclared revenue compiled from Petitioner's books and records. Osceola also provided Respondent with a list of 102 properties managed by Petitioner during the audit period. Approximately 61 properties are located in Osceola County and 41 are located in Polk County. Respondent bases its assessment on an estimate derived from the Osceola assessment, records, and work papers. Respondent conducted its audit in accordance with applicable law. The mathematical computations in Respondent's audit are correct. Petitioner owes sales and use tax in the respective amounts of $218,152.88 and $125,680.72, due on rentals derived from transient housing in Osceola and Polk counties. Petitioner also owes sales and use tax in the amount of $2,100 from the sale of fixed assets. Interest accrues at the daily rate of $98.13.
Recommendation Based upon the findings of fact and the conclusions of law, it is RECOMMENDED that Respondent enter a Final Order assessing Petitioner for tax, penalty, and accrued interest. DONE AND ENTERED this 11th day of July, 2003, in Tallahassee, Leon County, Florida. S DANIEL MANRY 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 11th day of July, 2003. COPIES FURNISHED: Carrol Y. Cherry, Esquire Office of the Attorney General, Tax Section The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 Martha F. Barrera, Esquire Office of the Attorney General, Tax Section The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 A.C.E. Property Management of Orlando, Inc. 3501 West Vine Street, Suite 387 Kissimmee, Florida 34741 Bruce Hoffmann, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 James Zingale, Executive Director Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100
The Issue The issue is whether the Application for Registration as an Associated Person filed by Petitioner should be granted.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Respondent enter a final order denying Petitioner's application for registration as an associated person of Noble Investment Company of Palm Beach. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 17th day of February 1993. 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 17th day of February 1993. COPIES FURNISHED: Karen M. Camechis H. Richard Bisbee Assistant General Counsels Department of Banking and Finance Suite 1302 The Capitol Tallahassee, Florida 32399 Ardith H. Steele 1639 South University Drive Plantation, Florida 33324 The Honorable Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 William G. Reeves General Counsel The Capitol Room 1302 Tallahassee, Florida 32399-0350
The Issue Whether conviction of income tax evasion in a federal district court in Florida constitutes a violation of Chapter 470, Florida Statutes. If such a conviction is a violation of Chapter 470, Florida Statutes, whether a license nay be revoked or suspended under Chapter 470, Florida Statutes, pending an appeal of such conviction. 3, Whether a hearing on the merits can be heard pending a decision on an appeal of a conviction.
Findings Of Fact Respondent Clarence E. Prevatt holds funeral directors license No. 650 and embalmers license No. 760. Respondent was found guilty by a federal jury on November 14, 1974, of ten counts of willfully and knowingly attempting to evade and defeat a large part of the income tax due and owing by him to the United States of America and adjudged guilty of those crimes by court order dated December 20, 1974. Respondent has appealed his conviction to the United States Circuit Court for Fifth Circuit with oral arguments on said appeal having been heard December 1, 1975. The appeal is still pending. Respondent does not contest the fact of his conviction by a federal jury but contends that a hearing on the merits should not be heard prior to the determination of his appeal of his conviction. The Respondent was charged with the violation of the following subsections of Section 470.12, Florida Statutes: "470.12 Grounds for revocation of license.-- EMBALMER. (c) The licensee is either a habitual drunkard or narcotic addict or has been found guilty by a jury of, or has pleaded guilty to after being charged with, a crime in this state or any other state involving moral turpitude, without regard to whether a judgement of conviction has been entered by the court having jurisdiction of such cases. * * * (k) The licensee has violated any provision of this chapter. FUNERAL DIRECTOR. (c) The licensee is either a habitual drunkard or narcotic addict or has been found guilty of, or has pleaded guilty to, after being charged with, a crime in this state or any other state involving moral turpitude, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases. * * * (p) The licensee has violated any provisions of this chapter." Respondent Prevatt further contends: That a conviction of federal income tax evasion is not a crime in the State of Florida and is not a crime involving moral turpitude and that regardless of the outcome of the appeal his license should not be' suspended or revoked under Section 470.12, Florida Statutes, supra. The Board contends: That a hearing on the revocation should proceed inasmuch as the statute does not require that Respondent be convicted but merely that he be found guilty under Section 470.12(2)(c), Florida Statutes, or that he be found guilty by a jury under Section 470.12(1)(c), Florida Statutes, and that the statutes do not require the Respondent be found guilty of a crime in Florida but merely requires the finding of guilty of a crime "in this state"; that the conviction by a federal jury in the City of Tampa, Florida, is a finding of guilty of a crime in this state; that Florida has laws prohibiting acts of perjury and laws making it a crime to intentionally deprive the true owner of money by false representations; that the condition of filing false and fraudulent income tax returns is an offense involving "moral turpitude"; that the legislature has the right to regulate the moral and character qualifications of professionals and has met the goal by enacting Section 470.12(1)(c), Florida Statutes, and Section 470.12(2)(c), Florida Statutes.
Recommendation It is recommended that embalmer license No. 760 and funeral director license No. 650 of Respondent Clarence E. Prevatt be revoked. DONE AND ORDERED this 2nd day of March, 1976. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Kenneth F. Hoffman, Esquire Rogers, Towers, Bailey, Jones & Gay 1300 Florida Title Building Jacksonville, Florida 32202 Raymond E. LaPorte, Esquire 408 Madison Street Tampa, Florida 33602 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DEPARTMENT OF PROFESSIONAL AND OCCUPATIONAL REGULATION BOARD OF FUNERAL DIRECTORS AND EMBALMERS In the Matter of the Revocation or Suspension of the license of Clarence E. Prevatt, licensed, CASE NO. 75-425 Funeral Director and Embalmer 3402 26th Street, Tampa, Florida. /
The Issue The issue in this case is whether the Petitioner should be issued a sales tax exemption certificate either as a "church" or as a "religious organization."
Findings Of Fact The Petitioner, In His Service, is a not-for-profit organization formed to give structure to a Bible study and prayer group Shirley B. Cole leads. Cole is the Petitioner's "pastor," but she is not ordained, does not officiate at weddings or funerals, and has no formal religious training other than participation in similar study groups in the past. The Petitioner is affiliated with an organization called the Federation of Independent Churches, which has an office on East Bird Street in Tampa, Florida. (In a post-hearing submission, Cole asserted that the Petitioner's "outreach is from Greater Ministries International, basically functioning as a satellite church, but there was no evidence regarding Greater Ministries International.) Portions of the Petitioner's by-laws were admitted in evidence at the final hearing. The by-laws make reference to three officers--president, vice-president, and secretary-treasurer--but Cole testified that she was the secretary and that someone else was the treasurer, and she did not seem to know anything about a president or vice-president. In addition, while the by-laws refer to a board of directors and meetings of the board of directors, Cole does not know anything about either. The Petitioner is small (not more than 15 members). It consists primarily of Cole and her friends and neighbors and some others who hear about the meetings. The group has met in various locations, including Cole's home at 5155 20th Avenue North, St. Petersburg, Florida, and the homes of other members of the group. In addition to Bible study and prayer, the group discusses health issues and other topics of interest and shares reading materials and tapes on topics of interest. From time to time, the group collects items of donated personal property for the use of members of the group and others in need who could use the items. In late June 1998, the Petitioner applied for a sales tax exemption certificate as a church. In response to a question from a representative of the Respondent DOR Cole stated that the Petitioner held services in her home every Thursday from 7:30 to 9:30 or 10 p.m. A DOR representative attempted to confirm Cole's representation by attending a meeting in Cole's home on Thursday, October 8, 1998, but no services were being held there, and no one was home. If there was a meeting on that day, it was held somewhere else. On or about December 28, 1998, DOR issued a Notice of Intent to Deny the Petitioner's application because the Petitioner did not have "an established physical place of worship at which nonprofit religious services and activities are regularly conducted and carried on." In January 1999, Cole requested an administrative proceeding on the Petitioner's application, representing that she was holding the Petitioner's meetings at her home every Monday from 7:30 p.m. On Monday, April 5, 1999, a DOR representative visited Cole's home at 7:30 or 7:35 p.m., but no one was home. At final hearing, Cole testified that she went to pick someone up to attend the meeting and was late returning. Cole had an April 1999 newsletter admitted in evidence. It indicates that she holds weekly Bible study meetings on Mondays at her home. It also indicates: "The week of April 19th will be our maintenance [health] meeting." It also indicates that the Monday, April 26, 1999, meeting would be a "covered dish dinner with prayer and praise fellowship afterward." Cole also had a book/tape loan check-out list admitted in evidence. The list indicates that two items were checked out on January 21, one on February 8, two on February 14, one on February 15, one on March 8, one on March 21, two on March 22, one on April 4, one on April 5, and four on April 12, 1999. (Two entries dated April 13 precede two on April 12, so it is assumed that all were on April 12, 1999). Cole owns her home, pays the taxes, and pays the utility bills. Cole also claims a homestead exemption. There are no signs, no physical attributes, or anything else that would identify Cole's house as a church. No part of the home is set aside for the Petitioner's exclusive use. The Petitioner pays no rent to Cole and does not reimburse Cole for any of her expenses (such as taxes and utility bills) of home ownership. Under local City of St. Petersburg zoning ordinances, Cole would have to obtain a special exception from the Environmental Development Commission to use her home as a church. Cole has not attempted to do so. Had she tried, the special exception would be denied because her home does not meet the ordinance's minimum lot and yard size criteria for such a special exception. (It is not clear whether Cole's home would meet the ordinance's parking, maximum floor area ratio, and maximum surface ratio criteria for a special exception for a church.) In light of past discrepancies between the Petitioner's representations and the facts, it was not clear from the evidence presented in this case that meetings have taken place, are taking place, or will take place in Cole's home on a regular basis.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the DOR enter a final order denying the Petitioner's application for a tax exemption certificate. DONE AND ENTERED this 18th day of May, 1999, in Tallahassee, Leon County, Florida. J. LAWRENCE JOHNSTON 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 18th day of May, 1999. COPIES FURNISHED: Shirley Cole, Pastor In His Service 5155 20th Avenue, North St. Petersburg, Florida 33710 Kevin ODonnell, Assistant General Counsel Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 Linda Lettera, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
Findings Of Fact Based upon the record evidence adduced as well as the factual stipulation filed by the parties, the following facts are found. The Petitioner, International Cruise Shops (ICS), is a subsidiary company of the Greyhound Corporation. ICS, as pertinent hereto, operates gift shops, bars, beauty salons and exercise rooms and like "passenger amenity" type facilities ("shops") on board cruise ships operating out of the Port of Miami. The particular cruise ships of concern in this case are owned by Norwegian Caribbean Lines (NCL). The parties have stipulated that the vessels owned by NCL, to which this proceeding relates, operate exclusively in foreign commerce and that none of their operating mileage involved herein is in intrastate commerce. Because of this, ICS maintains that the transactions or purchases which are the subject of this proceeding are exempt from taxation under Section 212.08(8), Florida Statutes. The parties have stipulated that the sales tax at issue was not collected by the vendors involved and was not paid on the Items in question. The parties have also stipulated that all of the items in question, purchased in port, were used or consumed on board the NCL vessels involved and that the vessels were operating at the time in foreign commerce. It is also stipulated that ICS recognized at the time of the purchases that they were exempt ones and provided the vendors involved with its export exemption registration number. ICS takes the position that it is exempt from sales and use tax as to these items because the items purchased are "parts of a vessel" within the meaning of the exemption statute set forth at Section 212.08(8), Florida Statutes. It is also stipulated that during the relevant audit period ICS did not furnish the vendors involved in these purchases with the "partial exemption affidavit" described in Section 212.08(8)(b), Florida Statutes, the "partial exemption" statute. The Department in turn argues that ICS is not entitled to the exemption because it is not an "owner, operator or agent of a vessel." ICS maintains, contrarily, that its status as owner, operator or agent of a vessel is not determinative of its entitlement to the exemption, but rather the nature of the goods involved and their use is what is determinative. Be that as it may, the Petitioner maintains that it qualifies as an operator or agent of the vessels involved anyway. The Department also contends that even if ICS is an owner, operator, or agent, it failed to sign the affidavit mentioned above, stating that "the item or items to be partially exempted are [parts of a vessel] and setting forth the extent of such partial exemption." (emphasis supplied) See Section 212.08(8)(b), Florida Statutes. The Department originally served the Petitioner a Notice of Intent (to make sales and use tax audit changes) and a Notice of Proposed Assessment of tax, penalty and interest for the audit period from January 1, 1980, through December 31, 1982. The Department also issued a Notice of Intent to make sales and use tax audit changes, as well as a Notice of Proposed Assessment of Tax Penalty and Interest for the supplemental audit period of January 1, 1983, through April 30, 1983. Additionally, it is stipulated that the documents attached to the stipulation, as exhibits C and D respectively, are true and correct copies of an original shop agreement and bar agreement made and entered into as of January 1, 1980, between NCL and ICS. The parties have stipulated that those two documents represent the contractual agreements between NCL and ICS during the relevant audit periods at issue in this proceeding, and fairly reflect the relationship of the parties, although they do not agree that the language in the agreements to the effect that "ICS shall not be considered the agent" of NCL means that ICS is not the agent of NCL for any purpose at all. Those two agreements, as well as the unrefuted evidence of record, reveal that the services of bar operator and concessionaire, gift shop operator, as well as beauty shops and sauna operator, duty-free shop operator, and operations involving the purchasing for and operating of a shipboard duty-free and non-duty free shop for passengers and crew, are regular facets of cruise ship operations. It is the peculiar purpose of cruise ships to transport passengers, but provide all sorts of amenities and shopping services for passengers and crew of the type mentioned above and elsewhere in these agreements. There is no question that the duties ICS personnel were performing aboard NCL ships are integral functions of the operation of a cruise ship, as that relates to the exempt status claimed herein by ICS. The parties have additionally stipulated that exhibit F, attached to the stipulation, in evidence, is a random list of some of the supplies purchased by ICS during the audit period in question, far which no sales tax were paid. This listing is stipulated to be a representative sampling of the kinds of items for which the Department assessed tax under Schedule B of the assessment at issue. Exhibit G is a true and correct copy of a petition for reassessment of sales and use tax by ICS dated December 21, 1983. On February 9, 1984, ICS representatives attended a conference with the Department's disposition section personnel in Tallahassee. A Notice of Decision was entered September 30, 1985, by the tax conferee of the Department in response to the December 21, 1983 petition by ICS and as a result of that February 9, 1984 informal conference with the Department. A Petition for Reconsideration was filed by ICS dated October 28, 1985, concerning that notice of decision. On November 20, 1985, ICS representatives attended another informal conference with the Department's disposition section of its Office of General Counsel in Tallahassee. A supplemental petition was then filed by ICS dated February 12, 1986. Thereafter, a Notice of Reconsideration dated July 28, 1986, was executed by the tax conferee, Mark A. Zych, in response to the November 20, 1985 petition and informal conference. Thereafter, ICS filed the petition initiating this proceeding on September 19, 1986. The parties have additionally stipulated to, and the evidence of record reveals, that the items involved in this case were purchased by ICS from vendors for use in its shops and bars in the regular course of operation and business aboard the cruise ships. Those items at issue were stipulated to be used or consumed by ICS on Board NCL'S vessels. The shop and bar employees of ICS were paid on NCL's payroll and ICS would then reimburse NCL. Additionally, NCL negotiated a labor contract which covered the shop and bar employees of ICS, as well as its own employees. While they were on duty on board ship, the ICS personnel wore name tags indicating that they were NCL crew members, bearing the NCL logo. ICS personnel also participated in all safety drills and lifeboat drills like any other crew members. Each had specific stations and passenger safety duties assigned them, including lifeboat stations, just as any NCL employee crew members. ICS personnels' living quarters were in the same location as NCL employees' living quarters and ICS personnel were subject to the same duties, obligations and restrictions as NCL employees while on board the NCL ships, including restricted access to passenger areas and restrictions on mingling with passengers. The shop agreement (exhibit C to the stipulation in evidence) reveals that ICS performance of its shop, bar and other operations on board the cruise vessels was subject to the control of NCL. Numerous references in the shop agreement establish that NCL had pervasive control over ICS employees' performance of their duties on board NCL's cruise ships, as set forth at length in Appendix A, attached hereto and incorporated by reference in these findings of fact. One particularly revealing provision of the agreement is worth quoting. Section 16 of the Agreement requires ICS to designate a specific employee to act as supervisor of ICS employees on board the ships. This supervisor must agree to take orders from the master and ship's officers: ... and such qualified NCL personnel as shall be designated by the masters at all times and shall be under the control and direction and report directly to whomever the masters designate on board the vessels. ICS' supervisory personnel are to give prompt obedience to the instructions and orders of the NCL designee in regard to the operation of the shop concession. (emphasis supplied) The bar agreement, in evidence as exhibit D to the stipulation, contains a virtually identical provision. That bar agreement, for purposes of this proceeding, is essentially equivalent to the shop agreement. Additionally, the policy and procedures manual, in evidence as exhibit to the Stipulation, depicts numerous provisions which establish that, for all practical purposes, except for the reimbursement of NCL by ICS for salary for its employees, that ICS employees were considered as a part of the regular crew of the NCL cruise ships and subject to the direction and control of the ships' officers the same as any other crew member. This extended even to direction and control concerning how displays in the shops were set up, and how the shops and bars, were operated. In summary, that policy and procedures manual further demonstrates the pervasive control of NCL over the ICS employees and operations aboard the cruise ships, even to the extent of regulating vacation of ICS employees when they were ashore between cruises, etc. The testimony of ICS witnesses at the hearing confirms the existence of NCL's authority over ICS and its employees and demonstrates clearly that NCL fully exercised that right of control in the normal day to day operations of its cruise vessels. Sonia Jensen, district manager for ICS, has worked for ICS continuously since 1975. She established that NCL personnel supervise, direct and control ICS employees as to safety procedures, lifeboat drills and lifeboat station assignments, and as to all rules and regulations applying to crew members and their behavior. ICS employees on the ships are considered crew members. The testimony of Linda Loddo, district manager for ICS since 1973, corroborated that of Ms. Jensen in establishing that the authority of the NCL ships' officers extends to ICS employees as crew members, whether they are actually aboard ship or on land. Additionally, Ms. Jensen established that, based upon her considerable experience working in the cruise ship industry, that the shops and bars operated by ICS aboard the NCL cruise ships are an integral functioning part of, and appropriate to the operation of, a cruise vessel and a cruise line, in the normal course of its business and operations. Thus, ICS contends that it fits within the Department's interpretation of the relevant exemption statute, Section 212.08(8), Florida Statutes, because ICS is clearly both an "agent" of NCL and an "operator" of cruise ships. Its operations aboard the cruise ships are an integral and necessary function and part of the cruise ships operations in providing for the comfort and recreation of the passengers. ICS contends however, that the exemption, and entitlement to it, is determined by the nature of the items purchased, as that relates to what are considered "parts of vessels" for purposes of the exemption provision and that the exemption is not directly applicable to a particular class of people. The Petitioner argues that the sentence containing the phrase "owner, operator or agent" merely creates a presumption with regard to which items will constitute "parts of a vessel," but that the scope of the exemption, is not limited to purchases by only those three classes of persons.
Recommendation Having considered the foregoing findings of fact, stipulations and unrefuted evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore RECOMMENDED that the State of Florida, Department of Revenue enter a final order withdrawing and abating the assessment of sales and use taxes, interest and penalties against International Cruise Shops, Inc., in the particulars, and for the reasons, found and discussed above. It is further, Recommended, that the penalty sought to be imposed against International Cruise Shops by the Respondent, concerning the "bar sales assessment," be abated for the reasons delineated above. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 8th day of December, 1988. P. MICHAEL RUFF 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 8th day of December, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-3769 Petitioner's proposed findings of fact Accepted. Accepted. Accepted. Accepted. Rejected, as subordinate to the Hearing Officer's findings of fact on this subject matter. Rejected, as subordinate to the Hearing Officer's findings of fact on this subject matter. Accepted, but subordinate to the Hearing Officer's findings of fact on the subject matter. Rejected as constituting, in large part, a conclusion of law and not a proposed finding of fact and as subordinate to the Hearing Officer's findings of fact on this subject matter. Rejected as subordinate to the Hearing Officer's findings of fact on this subject matter. Accepted. Accepted, but subordinate to the Hearing Officer's findings of fact on this subject matter. Accepted. Accepted. Accepted. Respondent's proposed findings of fact The Respondent incorporates by reference the factual stipulation as its proposed findings of fact. Those findings of fact stipulated to have been accepted, of course, by the Hearing Officer, although not necessarily for the material import Respondent asserts they should be accorded through it's proposed recommended order. COPIES FURNISHED: Robert W. Hanula, Esquire The Greyhound Tower, Station 1701 Phoenix, Arizona 85077 Linda G. Miklowitz, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32399-1050 Katie D. Tucker, Esquire Executive Director Department of Revenue 102 Carlton Building Tallahassee, Florida 32399-0100 William D. Townsend, Esquire Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Petitioner's application for a refund of $422.00 from Respondent be APPROVED. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 31st day of July, 1981. 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 31st day of July, 1981. COPIES FURNISHED: Jeffrey R. Ludwig, Esquire 1721 Memorial Park Drive Jacksonville, Florida 32204 John Browdy, III, Esquire Department of Legal Affairs The Capitol, Room LL04 Tallahassee, Florida 32301 Shirley W. Ovletrea, Esquire Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32301
The Issue The issue is whether petitioner, a sales tax dealer, must pay taxes, interest and penalties for collecting sales taxes on certain nontaxable transactions and then failing to remit those funds to respondent.
Findings Of Fact Based upon all of the evidence, including the pleadings, filings, and stipulation of counsel, the following findings of fact are determined: On an undisclosed date, respondent, Department of Revenue (DOR), conducted an audit of petitioner, Blackshears II Aluminum, Inc. (Blackshears), a registered sales tax dealer located in Crystal River, Florida. The audit covered the period from June 1, 1985, through March 31, 1989. As a result of that audit, on December 27, 1989, DOR issued a notice of intent to make sales and use tax audit charges. After petitioner availed itself of various informal procedures, a notice of reconsideration (notice) was issued on January 7, 1992, imposing a final assessment of $623,131.69. This action prompted Blackshears to initiate this proceeding. Although the notice addressed five issues, only issue three is relevant to this proceeding. That issue is broadly defined in the notice as "whether taxes collected on nontaxable transactions are state funds." According to the notice, the issue should be answered in the affirmative because (e)very dealer in the State of Florida is an agent for the state in that it is their responsibility to collect and remit sales tax. Blackshears collected the funds in the name of the State of Florida and has presented no refund assignments from the purchasers to permit them to apply for refunds, therefore, the State of Florida is due the funds. If the Department were to permit the use of its name to unjustly enrich Blackshears, a continuing deception would occur. The parties agree that petitioner collected sales taxes on various transactions (real property contracts) during the audit period. Whether such transactions were subject to the sales tax is in dispute, but for purposes of resolving the issue presented here, the parties have agreed that the undersigned can assume that the transactions were nontaxable. It is further agreed that even though petitioner collected the taxes from its customers, it failed to remit them to the state, and it has likewise failed to furnish proof that it refunded those moneys to its customers. Accordingly, DOR's assessment seeks to collect those taxes together with interest and substantial penalties. The parties have also agreed that the portion of the total tax assessment attributable to real property contracts is $277,406.53. As of March 29, 1993, the assessment totaled $636,570.37, after the accrual of interest and penalties. However, petitioner has paid to the state $16,180.19, for which it should receive credit. During the audit period, Rule 12A-1.014(6), Florida Administrative Code, was in effect and provided as follows: (6) Whenever a dealer credits a customer with tax on returned merchandise or for tax erroneously collected, he must refund such tax to his customer before his claim to the State for credit or refund will be approved. Under the terms of this rule, which interpreted the provisions of Chapter 212, Florida Statutes, any moneys erroneously collected by a dealer as taxes were to be remitted to the state. However, if the moneys were refunded to the customer, the dealer could then receive a refund of the moneys previously paid or a credit towards other taxes due.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent enter a final order granting its motion for partial summary adjudication and sustaining the assessment on issue three of its notice of reconsideration, plus interest and penalties, less those taxes already paid and identified in paragraph 2 of the parties' joint stipulation. DONE and ENTERED this 3rd day of May, 1993, 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 3rd day of May, 1993. COPIES FURNISHED: Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, FL 32399-0100 Linda Lettera, Esquire 204 Carlton Building Tallahassee, FL 32399-0100 C. Lynne Chapman, Esquire Department of Legal Affairs The Capitol-Tax Section Tallahassee, FL 32399-1050 Harold F. X. Purnell, Esquire 315 South Calhoun Street Suite 500 Tallahassee, FL 32301
Findings Of Fact Respondent issued a Notice Of Assessment And Jeopardy Findings against Jesus Abauza, also known as Jesus I. Valdez, on May 16, 1989, (the "assessment"). The assessment was made for the tax imposed on the unlawful transportation of approximately 90 kilograms of cocaine. The tax base in the assessment is the retail value of the cocaine. The retail value of the cocaine was estimated in the amount of $1,341,000 by multiplying the weight of the cocaine by the retail price listed in the Florida Department Of Law Enforcement ("FDLE") memorandum in effect at the time for Broward and Dade counties. The price per kilogram listed in the FDLE memorandum was $14,900. The FDLE memorandum became effective on May 4, 1988, and was the current price list used by the FDLE on May 8, 1989, when Petitioner was arrested and charged with possession of a controlled substance. Tax was assessed against the tax base at the rate of 50 percent and in the amount of $670,500. A 25 percent surcharge was assessed in the amount of $335,250. The total tax assessed in the amount of $1,005,750 is the sum of the amount of tax due at the rate of 50 percent and the amount of tax due for the 25 percent surcharge. An additional 50 percent penalty was assessed in the amount of $502,875. The total tax and penalty assessed in the amount of $1,508,635 is the sum of the tax due ($1,005,750) and the penalty ($502,875). A Warrant For Collection Of Delinquent Sales and Use Tax (the "warrant") and a Corrected Warrant (the "corrected warrant") was issued against Petitioner on the same day as the assessment. The warrant and corrected warrant are identical except for the addition of Petitioner's social security number in the the top right corner of the corrected warrant and a note in the right margin of the corrected warrant stating: This CORRECTED WARRANT is being re-recorded to reflect the correct amount of tax lien as being $1,005,750.00. Interest will accrue at the rate of $330.66 per day beginning 6/2/89 thru date of satisfaction of lien. 11/26/91[.] The amount stated in the assessment, warrant, and corrected warrant as the tax due is $1,005,750. The amount stated as the penalty due in all three documents is $502,875. The amount stated as the total and grand total due in all three documents is $1,508,625. The note in the right margin of the corrected warrant, however, eliminates the 50 percent penalty by stating that the corrected amount of the "tax lien" is $1,005,750. Interest accrues on the tax due at the rate of one percent per month. The amount stated in the bottom left corner of the assessment, warrant, and corrected warrant, as the "Daily Interest Rate" is $329.86. The correct per diem amount of interest is $330.66. 5/ Interest begins accruing on the 21st day of the month following the month for which the tax is due.6 The tax was initially due in May, 1989, when the assessment was issued. Although the corrected warrant states that interest accrues from "6/2/89", interest actually began accruing on June 21, 1989. The assessment was mailed to Petitioner by certified mail, return receipt requested. Petitioner received the assessment, but the date of receipt cannot be determined from the evidence of record. 7/ Petitioner unlawfully transported approximately 90 kilograms of cocaine. Petitioner was arrested by officers in the Metropolitan Dade County Police Department (the "Police Department") on May 8, 1989, and charged with possession of cocaine. In the criminal case against him, Petitioner filed a motion to suppress the evidence seized by the Police Department based upon the alleged illegality of the police officer's investigatory stop of the car Petitioner was driving. The district court denied the motion to suppress, and Petitioner successfully appealed the trial court's ruling to the United States Court of Appeals, Eleventh Circuit. The district court's denial of the motion to suppress was reversed in United States v. Valdez, 931 F.2d 1448 (11th Cir. May 22, 1991), and the case was remanded for further proceedings. The district court granted the motion to suppress and scheduled the criminal case for trial during the two week period beginning September 23, 1991. 8/ Petitioner stipulated in the Supplemental Pretrial Stipulation that he did not admit or stipulate that any of the matters set forth in the stipulation were factually correct. The findings of fact made in this Recommended Order, however, are substantially the same as the factual account contained in the official transcript of the criminal proceedings and reported by the appellate court in Valdez as the basis for its reversal of the trial court's denial of Petitioner's motion to suppress. On the afternoon of May 8, 1989, Detective Jerry Houck and Special Agent Steven Hills were conducting the surveillance of a residence (the "residence" or "house") located in Miami, Florida from an unmarked police car. Detective Houck and Special Agent Hills were part of a Police Department narcotics investigative team led by Detective Francisco Trujillo. Detective Trujillo was not personally present at the residence but monitored the events which occurred at the residence over the police radio in his unmarked vehicle. Detective Trujillo was assisted by Officer Douglas Almaguer, a uniformed police officer for the Police Department who was in a marked patrol car. Detective Houck observed a Honda Accord automobile (the "Honda") driven by Petitioner stop in front of the residence. Petitioner got out of the car, knocked on the front door of the house, and entered the residence. Detective Houck was unable to observe the events which took place inside the house. While Petitioner remained inside the house, two men later identified as Jose and Jorge Fernandez came out of the residence. They moved two cars parked in the yard and positioned the Honda so that its trunk was in close proximity to the front door of the residence. Jose and Jorge Fernandez opened the trunk of the Honda, reentered the residence, and reappeared within the next few minutes outside the house carrying plastic garbage bags which appeared to Detective Houck to be fairly heavy. The two men placed the garbage bags with their contents in the trunk of the Honda. They reentered the residence and quickly reappeared carrying additional bags which they also placed in the trunk of the Honda. Shortly thereafter, Valdez came out of the residence, got into the Honda, and drove away. Detective Trujillo advised Officer Almaguer that: [W]e were conducting an investigation and we had a vehicle we wished for him to follow, and if that person was to commit a traffic infraction which he normally cites somebody for, we wished for him to stop the vehicle. If that occurred, and he did stop the vehicle, I wanted him to ask the occupant of the vehicle for consent to search the vehicle, and I instructed him to ask if he would consent to a search. Officer Almaguer did not recall that he had been directed by Detective Trujillo to stop the Honda only for something which constituted the kind of traffic offense for which he would ordinarily stop a driver. Over the police radio, Detective Houck provided Detective Trujillo with the description and tag number of the Honda and notified Detective Trujillo when Petitioner drove away from the house. Detective Houck left his surveillance position at the residence and followed the Honda to 122nd Avenue. At that point, Detective Trujillo identified the Honda and Detective Houck confirmed the identification. As Petitioner approached the intersection of 8th Street and 122nd Avenue, Detective Trujillo was positioned across the intersection. Officer Almaguer was directly behind Detective Trujillo in his marked patrol car. Petitioner made a right turn against a red traffic light signal and violated the right-of-way of a vehicle approaching through the green traffic light signal. The approaching vehicle slowed abruptly in order to avoid a collision with Petitioner's Honda. Neither Detective Trujillo nor Officer Almaguer were able to state the speed at which the approaching vehicle was traveling before it slowed down, and neither officer heard any screeching of the tires of the approaching vehicle. Detective Trujillo advised Officer Almaguer that Petitioner was the subject of the narcotics investigation. Officer Almaguer followed the Honda for 18 blocks from the intersection where the traffic violation had occurred and then stopped Petitioner. Detective Trujillo parked two blocks away from the point of the stop and observed Officer Almaguer conduct the stop. Officer Almaguer approached Petitioner and asked for Petitioner's driver's license and registration. Petitioner produced his driver's license but stated that the car was loaned to him by a friend. Officer Almaguer asked Petitioner if Petitioner knew why he had been stopped. Petitioner answered "yes." Officer Almaguer requested permission to search the car, and Petitioner consented. Officer Almaguer found five sealed trash bags inside the trunk of the Honda. Officer Almaguer asked Petitioner what was inside the bags. Petitioner replied that it was cocaine. Officer Almaguer arrested Petitioner, handcuffed him, and placed him in the back seat of the patrol car until Detective Trujillo arrived at the point of the stop. Officer Almaguer issued Petitioner a citation for violation of the right-of-way. Detective Trujillo then advised Petitioner of his Miranda rights. Officer Almaguer's stop of Petitioner's vehicle was unreasonably pretextual, and Petitioner's consent to search was not voluntarily given. Officer Almaguer would not have pursued Petitioner's Honda, stopped it, and issued a traffic citation, but for Detective Trujillo's instructions that the Honda was the car which the narcotics investigation team wanted stopped. Officer Almaguer ordinarily did not search a vehicle for a violation of right-of-way, or even ask its driver for consent to search the vehicle. Officer Almaguer had no reason to ask for permission to search the vehicle based solely on the traffic violation he observed. Petitioner's consent to the search was tainted by the illegal, pretextual stop and detention. The contents of the five bags seized by the Police Department when Petitioner was arrested were tested by a chemist for the Police Department. The contents of the five bags weighed approximately 90 kilograms. Samples of each kilogram from the bags were tested and found to contain cocaine. The percentage of cocaine and purity of the cocaine was not determined.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order upholding the assessment of tax and interest in the amount determined by Respondent. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 24th day of February, 1992. DANIEL MANRY 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 24th day of February, 1992.
The Issue Whether Respondent's sales and use Certificate of Registration should be revoked for failure to abide by the repayment terms agreed to in a Compliance Agreement entered into with Petitioner on August 29, 2013, as alleged in the Amended Administrative Complaint for Revocation of Certificate of Registration.
Findings Of Fact The Department is the state agency charged with administering and enforcing Florida's revenue laws, including the laws related to the imposition and collection of sales and use tax pursuant to chapter 212, Florida Statutes (2014). Respondent is a Florida Profit Corporation doing business at 90791 Old Highway, Unit 1, Tavernier, Florida 33037. Respondent is a "dealer" as defined in section 212.06(2) and is required to comply with chapter 212. Respondent holds Certificate of Registration number 54- 8013269710-0 issued by the Department. A certificate of registration is required in order to do business in the state of Florida and authorizes its holder to collect and remit sales tax pursuant to chapter 212. The Department is authorized to revoke a dealer's certificate of registration for failure to comply with state tax laws. Prior to such revocation, the Department is required by statute to schedule a conference with the dealer. The dealer is required to attend the informal conference and may either present evidence to refute the Department's allegations of noncompliance or to enter into a compliance agreement with the Department to resolve the dealer's failure to comply with chapter 212. The Department issued and recorded warrants in the public records of Monroe County to secure collection of delinquent sales and use tax, plus penalties, filing fees, and interest from Respondent.1/ The Department initiated the process of revoking Respondent's Certificate of Registration by sending Respondent a Notice of Conference on Revocation of Certificate of Registration (Notice of Conference). The Notice of Conference advised that the informal conference would be held on August 29, 2013, and that the Department had initiated the process to revoke Respondent's Certificate of Registration for failure to remit sales and use tax and pay the reemployment tax that was determined to be due. The notice also informed Respondent that it would have the opportunity to make payment or present evidence to demonstrate why the Department should not revoke Respondent's Certificate of Registration. Respondent's President and Registered Agent, Spencer Slate, attended the informal conference on behalf of Respondent and entered into a Compliance Agreement with the Department. During the informal conference, Mr. Slate admitted to using the collected tax to pay for Respondent's payroll, fuel, and other business expenses instead of remitting the tax to the State. The Compliance Agreement states that due to Respondent's failure to timely file returns and pay all taxes due, Respondent admits to a past due sales and use tax liability of $51,506.55, consisting of tax, penalty, interest, and fees. The Compliance Agreement requires Respondent to make a down payment of $16,349.14 by August 29, 2013, and to make 12 monthly payments. The Compliance Agreement also provides that: IN CONSIDERATION for the Department refraining from pursuing revocation proceedings at this time, the taxpayer agrees: * * * To accurately complete and timely file all required returns and reports for the next 12 months, beginning with the first return/report due for 08/31/2013, payable on or before 09/20/2013. To timely remit all taxes due for the next 12 months, following the date of this agreement. Respondent made the down payment of $16,349.14, as required by the Compliance Agreement, and the first four scheduled payments, but defaulted on the terms of the Compliance Agreement as follows: Failed to make the monthly payments due, beginning with the fifth payment. Failed to timely remit taxes due for September 2013, October 2013, and November 2013. In addition, the payment for sales tax due September 2013 was returned due to insufficient funds. Failed to timely file sales and use tax returns and remit the taxes due for the tax periods May 2014, June 2014, and July 2014. The Compliance Agreement provides that "[i]f the taxpayer fails to comply with any obligation under this agreement, the Department has the right to pursue revocation of the taxpayer's certificate of registration." As provided by the Department's revocation worksheet dated December 5, 2014, Respondent currently has an outstanding sales and use tax liability in the amount of $67,501.98 and reemployment tax liability of $667.08, including tax, penalty, interest, and fees.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Revenue revoking the Certificate of Registration issued to and held by Respondent. DONE AND ENTERED this 30th day of January, 2015, in Tallahassee, Leon County, Florida. S MARY LI CREASY 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 30th day of January, 2015.
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.
