12-000083 Department Of Revenue vs. James Braden, D/B/A Action Signs And Grafix Status: Closed Recommended Order on Tuesday, May 1, 2012.

Summary: Respondent's failure to file tax returns or remit taxes requires cancellation of certificate of registration.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF REVENUE , )

)

Petitioner , )

)

vs. ) Case No. 12 - 0083

)

JAMES BRADEN, d/b/a ACTION )

SIGNS AND GRAFIX , )

)

Respondent . )

)

RECOMMENDED ORDE R

On March 15, 2012, an administrative hearing in this case

was held by teleconference in Port Richey and Tallahassee,

Florida, before William F. Quattlebaum, Administrative Law Judge,

Divisi on of Administrative Hearings.

APPEARANCES

For Petitioner: Mari cruz Rahaman Fincher, Esquire

John Mika, Esquire

Office of the Attorney General

The Capitol, Plaza Level 01

Tallahassee, Florida 32399

For Respondent: James Braden, pro se

Action Signs and Grafix

8103 Monarch Drive

Port Richey, Florida 34668

STATEMENT OF THE ISSUE

The issue in this case is whether the Respondent's

c ertificate s of r egistration should b e revoked for an alleged

failure to file tax returns and to remit taxes to the Petitioner .

PRELIMINARY STATEMENT

By an Administrative Complaint for Revocation of Certificate

of Registration (Complaint) dated December 8, 2011, the

Department of Revenue (Pet itioner) alleged that James Braden ,

d/b/a Action Signs and Grafix (Respondent) , failed to comply with

statutory requirements to file tax returns and remit taxes and

that the Petitioner 's two c ertificates of r egistration should

therefore be cancel led . The Respondent challenged the

allegations in the Complaint and requested an administrative

hearing. On January 6, 2012, the Petitioner forwarded the

request to the Division of Administrative Hearings, which

scheduled and conducted the proceeding .

At the heari ng, the Petitioner presented the testimony of

one witness and had Exhibits 1 through 13 admitted into evidence.

The Responden t testified on his own behalf.

A T ranscript of the hearing was filed on March 23, 2012. On

April 2, 2012, the Petitioner file d a Proposed Recommended O rder

that has been considered in the preparat ion of this Recommended

Order.

FINDING S OF FACT

1. The Petitioner is the state agency responsible for

collection of sales and use taxes in Florida , pursuant to

c hapter 212, Florida Statute s (2011) . 1/

2. The Respondent is a Florida company doing business at

7810 U . S . Highway 19, Port Richey, Florida , and is a "dealer" as

defined at s ection 212.06(2) .

3. The Respondent holds two c ertificates of r egistration

issued by the Petitioner ( Certifi cate No. 61 - 8012297146 - 3 and

Certificate No. 61 - 8012297147 - 0 ) and is statutorily required to

file tax returns and remit taxes to the Petitioner.

4. As set forth herein, t he Respondent has failed to file

tax returns or has filed returns that were not accom panied by the

appropriate tax payments.

5. During the time the Respondent has held the

c ertificates, t he Petitioner has filed 15 separate warrants

against the Respondent related to unpaid taxes, fees, penalties,

and interest .

6. The Petitioner is authori zed to cancel a dealer's

c ertificate of r egistration for failure of a dealer to comply

with state tax laws. Prior to such cancellation, the Petitioner

is required by statute to convene a conference with a dealer.

7. On June 24, 2011, the Petitioner issue d a Notice of

Conference on Revocation of Certificate of Registration (Notice) .

8. The conference was scheduled for July 27, 2011. The

Respondent received the N otice and attended the conference .

Certificate of Registration No. 61 - 8012297146 - 3

9. The Re spondent failed to file tax returns related to

Certificate No. 61 - 8012297146 - 3 for the period of August through

December 2001. The Petitioner assessed estimated taxes of

$587.50, fees of $110.95, and a penalty of $285.00. As of the

date of the Notice, th e accrued interest due was $633.79.

10. Additionally, the Respondent failed to remit taxes of

$5,623.63 related to Certificate No. 61 - 8012297146 - 3 that were

due according to his filed tax returns. Based thereon, the

Respondent assessed fees of $994.58 an d a penalty of $2,478.26.

As of the date of the Notice, the accrued interest due was

$4,702.27.

11. A s of the date of the Notice , the Respondent's total

unpaid obligation on Certificate No. 61 - 8012297146 - 3 was

$15,415.98, including taxes of $6,211.13 , fe es of $1,105.53 ,

penalties of $2,763.26 , and accrued interest of $5,336.06.

Certificate of Registration No. 61 - 8012297147 - 0

12. The Respondent failed to file tax returns related to

Certificate No. 61 - 8012297147 - 0 for the months of June 2000,

September 200 0, May 2001, and August 2001. The Petitioner

assessed estimated taxes of $619.00 and fees of $202.00. As of

the date of the Notice, the accrued interest due was $782.56.

13. Additionally, the Respondent failed to remit taxes

related to Certificate No. 61 - 8012297147 - 0 of $4,332.48 that were

due according to his filed tax returns. Based thereon, the

Respondent assessed fees of $771.71 and a penalty of $1,576.87.

As of the date of the Notice, the accrued interest due was

$4,725.27.

14. A s of the date o f the Notice , t he Respondent's total

unpaid obligation related to Certificate No. 61 - 8012297147 - 0 was

$13,009.89, including taxes of $4,951.48 , fees of $973.71 ,

penalties of $1,576.87 , and accrued interest of $5,507.83.

The Audit

15. A separate audit of t he Respondent's business records

for the period of February 2004 through January 2007 resulted in

an additional assessment totaling $9,314.07, including taxes of

$5,048.23 , fees of $661.76 , and a penalty of $252.42 . As of the

date of the Notice, the accru ed interest due was $3,351.66.

16. At the July 27, 2011 , conference, the parties

negotiated a compliance agreement under which the Respondent

would have retained the c ertificates of r egistration. The

agreement required the Respondent to make an initial d eposit of

$2,000 .00 by August 15, 2011, and then to make periodic payments

towards satisfying the unpaid obligation.

17. The Respondent failed to pay the $2,000 .00 deposit, and

the Petitioner subsequently filed the Complain t at issue in this

proceeding.

1 8. As of the date that the Complaint was filed, the

Respondent owed a total of $37,797.66 to the State of Florida,

including taxes of $15,004.34 , estimated taxes of $1,206.50, fees

of $2,741.00 , penalties of $4,592.55 , and accrued interest of

$14,253.27.

CONCLUSIONS OF LAW

19. The Division of Administrative Hearings ha s jurisdiction

over the parties to and the subject matter of this proceeding.

§§ 120.569 and 120.57, Fla. Stat.

20. To prevail in this case, the Petitioner must

demonstrate the truthfulness of the allegations i n the Complaint

by clear and convincing evidence. Dep ' t of Banking & Fin . v.

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

Turlington , 510 So. 2d 292 (Fla. 1987). The burden has been met.

21. As a dealer, the Respondent wa s required to obtain a

c ertificate of r egistration from the Petitioner . See § 212.18,

Fla . Stat . , and Fla . Admin . Code R . 12A - 1.060. The Petitioner

had issued two c ertificates to the Respondent.

22. Section 212.11(1)(b) requires the Respondent to fil e

tax returns with the Petitioner on a monthly basis.

23. Section 212.15(1) requires that the Respondent collect

taxes from customers and remit such taxes to the Petitioner on a

monthly basis.

24. Section 212.28 authorizes the Petitioner to revoke a

deal er's certificate of registration for the failure to file a

tax return or to remit t axes.

25. As referenced herein, t he evidence established that the

Respondent has failed to file tax returns. Section 212.12(5)(b)

states that , in the absence of a filed ta x return, the Petitioner

must assess a dealer's tax liability based on the best

information available . The cited section also states that the

Petitioner's assessment of taxes, along with related interest and

penalties , is deemed correct , and the burden to show otherwise

falls to the Respondent. Although the Respondent disagreed with

the assessment, the Respondent offered no credible evidence at

the hearing that the Petitioner's as sessment w as incorrect.

26. The evidence also established that the Responde nt filed

returns indicating that taxes were due but failed to remit the

funds . Section 212.14(3) states that the filing of a tax return

without the accompanying payment of funds is "prima facie

evidence of conversion of the money due."

27. Section 213.69 2, Florida Statutes, specifically

authorizes the Petitioner to revoke a dealer's certificate of

registration if the Petitioner has filed a warrant against a

dealer for the failure to file a tax return or to remit taxes.

The evidence established that the P etitioner has filed

15 warrants against the Respondent for failing t o file tax

returns or remit taxes.

28. Section 213.692(1)(a) states that the Petitioner may

proceed to revoke a certificate after conducting a conference

with a dealer and offering the de aler an opportunity to provide

additional information or resolve the dispute through a

compliance agreement. In this case, such a conference occurred ,

and the parties agreed to resolve the matter through exec ution of

a compliance agreement. T he Responden t failed to pay the initial

down payment required by the agreement , and the Petitioner

subsequently filed the C omplaint in this case.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Re venue issue a

f inal o rder revoking the c ertificates of r egistration held by the

Respondent.

DONE AND ENTERED this 1st day of May , 2012 , in Tallahassee,

Leon County, Florida.

S

WILLIAM F. QUATTLEBAUM

Administrative Law Jud ge

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 1st day o f May , 2012 .

ENDNOTE

1/ All references to Florida Statutes are to the 2011 version,

unless otherwise indicated.

COPIES FURNISHED:

James Braden

Action Signs and Grafix

8103 Monarch Drive

Port Richey, Florida 34668

Maricruz Rahaman Fincher, Esquire

John Mika, Esquire

Office of the Attorney General

The Capitol, Plaza Level 01

Tallahassee, Florida 32399

Nancy Terrel, Acting General Counsel

Department of Revenue

The Carlton Building, Room 204

501 South Calhoun Street

Post Office Box 6668

Tallahassee, Florida 32314 - 6668

Lisa Vickers , Executive Director

Department of Revenue

The Carlton Building, Room 104

501 South Calhoun Street

Tallahassee, Florida 32399 - 0100

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written except ions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.