18-005005
Vmob, Llc vs.
Department Of Revenue
Status: Closed
Recommended Order on Wednesday, May 22, 2019.
Recommended Order on Wednesday, May 22, 2019.
1STATE OF FLORIDA
4DIVISION OF ADMINISTRATIVE HEARINGS
8VMOB, LLC,
10Petitioner,
11vs. Case No. 18 - 5005
17DEPARTMENT OF REVENUE,
20Respondent.
21_______________________________/
22RECOMMENDED ORDER
24On March 28, 2019, Hetal Desai, Administrative Law Judge of
34the Division of Administrative Hearings (DOAH) , held a final
43hearing in this cause by video teleconference with sites in
53Tampa and Tallahassee, Florida.
57APPEARANCES
58For Petitioner: William B. Meacham, Esquire
64308 East Plymout h Street
69Tampa, Florida 33603
72For Respondent: Mark S. Urban, Esquire
78Office of the Attorney General
83The Capitol, Plaza Level 01
88Tallahassee, Florida 32399
91STATEMENT OF THE ISSUE
95Wheth er factual and legal grounds support the Department of
105RevenueÓs jeopardy findings and assessment , dated May 26, 2017.
114PRELIMINARY STATEMENT
116On May 26, 2017, t he Department of Revenue (Department),
126pursuant to section 213.732, Florida Statutes (2017) , is sued a
136Notice of Jeopardy Finding (Jeopardy Finding) and a Notice of
146Final Assessment (Assessment) to VMOB, LLC , d/b/a Cheap on
155Howard (VMOB). The J eopardy F inding alleged collection of the
166associated tax, penalty, fees, and interest would be jeopardized
175by delay based on the dishonored checks issued for payment . 1/
187The A ssessment was in the amount of $16,606.17.
197On August 14, 2017 , at 9:56 p.m., VMOB faxed to the
208Department a letter protesting the J eopardy F inding and
218A ssessment. The letter alleged VMOB did not receive adequate
228notice of the May 26, 2017 , notices. The Department eventually
238allowed VMOB to pursue an administrative remedy.
245On September 19, 2018, the Department transferred the
253matter to DOAH, where it was assigned to an administrative la w
265judge and set for hearing. After one continuance , a final
275hearing was set for March 28, 2019.
282An Order granting the DepartmentÓs Request to Take Judicial
291Notice was entered December 10, 201 8, and the undersigned takes
302official recognition of a tax war rant recorded in the official
313records of Hillsborough County, Florida ; and the R ecommended
322Order and F inal O rders in consolidated DOAH Case Nos. 17 - 3452
336and 17 - 3630. A pre - hearing conference was held March 22, 2019,
350by telephone.
352At the final hearing, th e Department called one witness,
362Rolinda Smoak, and offered RespondentÓs E xhibits 1 through 19 ,
372which were admitted into evidence. VMOB called one witness,
381Verna Bartl ett, and admitted PetitionerÓs E xhibits 1 through 5 ,
392which were admitted into evidence.
397At the conclusion of the hearing, the parties in dicated a
408transcript would be ordered. The parties agreed to submit their
418proposed recommended orders (PROs) 30 days after the filing of
428the transcript.
430The T ranscript was filed on April 11, 2019. Respond ent
441requested an extension to file its PRO, which was granted. Both
452parties timely filed PROs on May 13, 2019 , which have been
463considered.
464Unless otherwise indicated, all rule and statutory
471references are to the 201 7 versions.
478FINDING S OF FACT
482Parties and People
4851 . The Department is the state agency responsible for
495implementing and administering the revenue laws of the State of
505Florida, including the laws relating to the imposition and
514collection of the stateÓs sales and use tax, pursuant to
524chapter 212, Florida Statutes.
5282 . VMOB is a Florida limited liability company with its
539principal address at 317 South Howard Avenue, Tampa, Florida
54833606; and its mailing address and tax registration address as
558Post Office Box 342681, Tampa, Florida 33694 . For the p urposes
570of these proceedings VMOB is the taxpayer.
5773 . Verna Bartlett is, and has been since its inception,
588VMOBÓs managing member responsible for collecting and remitting
596VMOB's sales and use tax.
6014 . Lewis Mustard became VMOBÓs Power of Attorney (POA) i n
613October of 2016.
616Notice to VMOB
6195 . Pursuant to the DepartmentÓs ÐPower of Attorney and
629Declaration of RepresentativeÑ form submitted by VMOB (POA
637form), receipt of notices or other written communications Ðby
646either the representative or the taxpayer wil l be considered
656receipt by both.Ñ
6596 . The POA form further provides that Ð[c]ertain computer -
670generated notices and other written communications cannot be
678issued in duplicate due to certain system constraints.
686Therefore, [the Department] will send these c ommunications to
695only the taxpayer at his or her tax registration address.Ñ
7057 . The notices of the Jeopardy Finding and Final
715Assessment in this case were mailed together to VMOBÓs mailing
725address via certified mail and regular US PS mail. The certified
736m ailing was re turned unclaimed; the regular USPS mailing was not
748returned.
7498 . Ms. Bartlett acknowledge d receiving the notices and
759eventually brought this protest.
7639 . The undersigned finds VMOB received notice of the
773Jeopardy Finding and Assessment.
777VMO BÓs Electronic Filings
78110 . Beginning January 2016, VMOB was required to file and
792pay its sales tax electronically , unless it received a waiver .
803See § 213.755(1), Fla. Stat.; Fla. Admin. Code R. 12 - 24 . 003.
81711 . The Department established at the hearing t hat it
828repeatedly made VMOB aware of the electronic filing requirement.
837For example, each tax bill sent to VMOB indicated payment was to
849be made electronically; and Department staff explained the
857electronic filing and payment requirements to Ms. Bartlett on
866August 18, 2015 .
87012 . On April 29, 2016, the Department sent a fax to
882Ms. Bartlett , which included a reminder of the electronic filing
892and payment requirement. In response, Ms. Bartlett stated, ÐI
901will begin filing electronically with the May [2016] sales tax
911return.Ñ
91213 . O n December 29, 2016 , t he Department also notified
924VMOBÓs POA of the electronic filing and payment requirement.
93314. Ms. Bartlett b elieved that as long as she paid a
945penalty , she did not have to file tax returns or tax payments
957elec tronically . However, there was insufficient evidence to
966support this belief.
96915 . The undersigned finds VMOB has never filed or paid its
981sales tax electronically.
984VMOBÓs Tax Jeopardy
9871 6 . VMOB issued worthless checks for sales tax due for the
1000periods of June 2016, July 2016, and September 2016 through
1010February 2017. As of May 26, 2017, the date of the Jeopardy
1022Finding, the dishonored checks for these time periods had not
1032been satisfied, and VMOB had an outstanding tax liability
1041totaling $104,853.60.
104417 . VMOBÓs April 2017 sales tax payment was due no later
1056than May 20 , 2017 . See § 212.15(1), Fla. Stat. The April 2017
1069payment had not been received by the Department as of May 26,
10812017.
108218 . The competent and credible evidence establishes that
1091as of May 26 , 2017, payment of the March 2017 and April 2017
1104sales tax was jeopardized by delay. Payment of VMOBÓs sales tax
1115remain s in jeopardy given that VMOB has yet to submit payment
1127requirements through electronic filing, and as of the date of
1137the hearing , these liabilities were still outstanding.
114419 . As a result, the undersigned finds the Department
1154properly issued the Jeopardy Finding.
1159VMOBÓs Tax Liability
116220 . The sales tax rep orting periods at issue in the
1174J eopardy Findings and A ssessment are March 2017 and April 2017.
118621 . The total tax due for the March 2017 reporting period,
1198as reflected on VMOBÓs sales tax return and as reflected on the
1210Assessment, is $6,668.73.
121422 . The total tax due for the April 2017 reporting period,
1226as established at the hearing , is $5,651.75. 2/
123523 . VMOB issued check number 40552 in the amount of
1246$6,668.73 from a Suntrust Bank account on April 20, 2017.
125724 . VMOB issued check number 40553 in the amount of
1268$5,651.75 from a Suntrust Bank account on May 22, 2017.
127925 . Both of t hese che cks ( for VMOBÓs March and April 2017
1294sales tax payments ) were dishonored by Suntrust Bank with the
1305notation ÐReturn Reason Î Unable to Locate Account . Ñ
13152 6 . Ms. Bartlett contends she was unaware worthless checks
1326were being issued for the June 2016 through April 2017 periods
1337until late May or early June of 2017. Given the undisput ed
1349evidence regarding the efforts by the Department to obtain
1358payment , this contention is implausible. For example, for each
1367returned check (June 2016, July 2016, September 2016 through
1376February 2017, March 2017 and April 2017), the Department
1385automatically mailed out a bill to VMOB at its mailing address.
1396There was no evidence VMOB did not receive these bills.
14062 7 . On November 28, 2016, the Department explained to
1417VMOBÓs POA tha t VMOB was writing worthless checks to the
1428Department. On December 28, 2016, the Department informed
1436VMOBÓs POA that Ms. Bartlett continued to pay with worthless
1446checks.
14472 8 . Even if it is t rue that Ms. Bartlett was not aware of
1463the worthl ess checks bein g used to pay VMOBÓs taxes, any lack of
1477knowledge was due to her own misfeasance. Ms. Bartlett admits
1487that from October 2016 through April 2017 , she did not have
1498adequate oversight over or involvement with VMOB. She did not
1508monitor its checking accounts or finances; she left pre - signed
1519blank checks for her staff, and she did not ask staff for an
1532accounting.
15332 9 . Ms. BartlettÓs testimony is further undermined by her
1544own correspondence to the Department , dated January 30 and
1553February 27, 2017, in which Ms. Bartlett acknowledges notices of
1563assessment of personal liability and personal jeopardy. She,
1571therefore, had to be aware at that point there was a problem
1583with VMOBÓs banking accounts and the methods of paying it s tax
1595liabilities.
159630 . Even after Ms. Bart lett discovered the checks used to
1608make the March and April 2017 tax payments had not been honored
1620by the bank, VMOB made no efforts to pay the tax liability
1632amount.
1633CONCLUSIONS OF LAW
16363 1 . The Division of Administrative Hearings has
1645jurisdiction over the subject matter and the parties pursuant to
1655section 120.569, Florida Statutes.
16593 2 . The Department is an agency of the State of Florida
1672lawfully created and organized pursuant to section 20.21,
1680Florida Statutes, and is vested with the responsibility of
1689impl ementing and administering the revenue laws of the State of
1700Florida . This includ es the laws relating to the imposition and
1712collection of the stateÓs sales and use tax, pursuant to
1722c hapter 212 .
17263 3 . The DepartmentÓs burden of proof Ð shall be limited to
1739a showing that an assessment has been made against the taxpayer
1750and the factual and legal grounds upon which the applicable
1760department made the assessment. Ñ § 120.80(14)(b)2 . , Fla. Stat.
1770ÐOnce the Respondent has met this initial burden of proof, the
1781burden shifts to the taxpayer to demonstrate by a preponderance
1791of the evidence that the assessment is incorrect.Ñ IPC Sports ,
1801Inc. v. State, Dep Ó t of Rev . , 829 So. 2d 330, 332 (Fla. 3d DCA
18182002).
18193 4 . In accordance with sections 212.15(1) and (2), the
1830tax es i mposed pursuant to c hapter 212 become state funds at the
1844moment of collection, and the intentional failure to remit these
1854taxes constitutes theft of state funds.
18603 5 . Section 212.15(1) also requires that dealers collect
1870and remit to the Department the tax imposed by chapter 212 on a
1883monthly basis. The collected taxes are due on the first day of
1895the succeeding calendar month and are considered late if not
1905paid to the Department by the 20th day of the month when due.
191836 . Pursuant to section 213.755(1), and the DepartmentÓs
1927rules, VMOB was required to file returns and remit payments by
1938electronic means, unless first obtaining a waiver. Because VMOB
1947failed to do so and , thus , violated this requirement, the
1957Department was justified in issuing the Jeopardy Findi ng.
19663 7 . The Department proved by clear and convincing evidence
1977that the sa les and use taxes owed by VMOB were in jeopardy at
1991the time of issuance of the notice and, accordingly, the
2001DepartmentÓs J eopardy F inding and A ssessment for this period are
2013sustaine d . See § 213.732(2), Fla. Stat.; Fla. Admin. Code R.
202512.21.005(1).
202638 . The total tax due for the March 2017 reporting period,
2038as reflected on VMOBÓs sales tax return and as reflected on the
2050Assessment, is $6,668.73.
205439 . The total tax due for the April 2017 reporting period,
2066as reflected on the Assessment, is $8,258.92. Because the April
20772017 sales tax return and payment were late, the Department,
2087pursuant to section 212.14, estimated the total tax due at
2097$8,258.92. However, the actual amount of tax du e, as reflected
2109on VMOBÓs late - filed sales tax return, is $5,651.75.
212040. The total tax amount VMOB owe s , without penalties or
2131interest, for March and April 2017 is $12,320.48.
21404 1 . The Department is entitled to impose an additional
2151amount for the penalti es and interest that have accrued on the
2163outstanding March and April 2017 tax amount. § § 213.235 and
2174213.24, Fla. Stat.; DepÓt of Revenue Tax Infor mation Publication
2184N o. 17ADM - 02 (November 15, 2017) .
2193Due Process
21954 2 . VMOB alleges a due process violation b ecause the
2207J eopardy F inding and the A ssessment were contained within the
2219same mailing. More specifically, VMOB contends that because the
2228time to review the J eopardy F inding and the time to challenge
2241the A ssessment started running at the same time, VMOB wo uld
2253conceivably not have the results of the jeopardy review before
2263the time to challenge the A ssessment had lapsed. Regardless,
2273Petitioner has not been prejudiced because nothing prohibits
2281VMOB from informally or formally challenging the A ssessment
2290prior to receiving the results of a jeopardy review. Finally,
2300the issue is moot because VMOB has had the opportunity to
2311challenge the A ssessment , and a formal administrative hearing
2320has been conducted. Thus, it was not a violation of VMOBÓs due
2332process rights for the Department to send the n otice s for the
2345Jeopardy Finding and the Assessment in the same mailing.
2354See generally , Gosciminski v. State , 262 So. 3d 47, 59 (Fla.
23652018) (finding no procedural due process violation where
2373defendant was given notice and ha d an opportunity to be heard).
2385RECOMMENDATION
2386Based on the foregoing Findings of Facts and Conclusions of
2396Law, it is RECOMMENDED that the Department of Revenue enter a
2407final order: (1) S ustaining the May 26, 2017 , Notice of
2418Jeopardy Finding ; and (2) I ssu ing an Assessment for March and
2430April 2017 in the amount of $12,320.48 with penalties and
2441interest .
2443DONE AND ENTERED this 2 2 nd day of May , 2019 , in
2455Tallahassee, Leon County, Florida.
2459S
2460HETAL DESAI
2462Administrative Law Judge
2465Division of Administrative Hearings
2469The DeSoto Building
24721230 Apalachee Parkway
2475Tallahassee, Florida 32399 - 3060
2480(850) 488 - 9675
2484Fax Filing (850) 921 - 6847
2490www.doah.state.fl.us
2491Filed with the Clerk of the
2497Division of Administrative Hearings
2501this 22 nd day of May , 2019 .
2509ENDNOTE S
25111/ T he Notice of Jeopardy Finding alleged the following facts :
2523¤ The collection of the amount the
2530Department has determined to be due w ill be
2539jeopardized by delay.
2542¤ The taxpayer has failed to satisfy a
2550dishonored check and/or failed electronic
2555payment transaction.
25572/ The April 2017 tax figure is different than what is reflected
2569on VMOBÓs April 2017 sales tax return , because the return was
2580filed late by VMOB. The Department is authorized to estimate
2590any unpaid deficiencies in tax to be assessed against the sales
2601tax dealer upon such information as may be available to it, and
2613to issue a delinquent tax warrant for the collection of such
2624tax, interest, or penalties estimated to be due and payable, and
2635such assessment is deemed prima facie correct , but the testimony
2645at the hearing established the actual amount . § 212.14, Fla.
2656Stat.
2657COPIES FURNISHED:
2659Mark S. Hamilton, General Counsel
2664Department of Revenue
2667Post Office Box 6668
2671Tallahassee, Florida 32314 - 6668
2676Verna Bartlett
2678V MOB, LLC
2681Post Office Box 342681
2685Tampa, Florida 33694
2688Mark S. Urban, Esquire
2692Office of the Attorney General
2697The Capitol, Plaza Level 01
2702Tallahassee, Florida 32399
2705(eServed)
2706William B. Meacham, Esquire
2710308 East Plymouth Street
2714Tampa, Florida 33603
2717(eSer ved)
2719James a Zingale, Executive Director
2724Department of Revenue
2727Post Office Box 6668
2731Tallahassee, Florida 32314 - 6668
2736(eServed)
2737NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
2743All parties have the right to submit written exceptions within
275315 days from the date of this Recommended Order. Any exceptions
2764to this Recommended Order should be filed with the agency that
2775will issue the Final Order in this case.
- Date
- Proceedings
- PDF:
- Date: 05/22/2019
- Proceedings: Recommended Order cover letter identifying the hearing record referred to the Agency.
- PDF:
- Date: 05/09/2019
- Proceedings: Petitioner's Unopposed Motion for Extension of Time to File Proposed Recommended Order filed.
- Date: 04/11/2019
- Proceedings: Transcript of Proceedings (not available for viewing) filed.
- Date: 03/28/2019
- Proceedings: CASE STATUS: Hearing Held.
- Date: 03/22/2019
- Proceedings: CASE STATUS: Pre-Hearing Conference Held.
- Date: 03/22/2019
- Proceedings: Petitioner's Proposed Exhibits filed (exhibits not available for viewing).
- Date: 03/20/2019
- Proceedings: Respondent's Proposed Exhibits filed (exhibits not available for viewing).
- PDF:
- Date: 02/28/2019
- Proceedings: Amended Notice of Telephonic Pre-hearing Conference (pre-hearing conference set for March 22, 2019; 10:00 a.m.).
- PDF:
- Date: 01/28/2019
- Proceedings: Notice of Telephonic Pre-hearing Conference (set for March 25, 2019; 10:00 a.m.).
- PDF:
- Date: 01/15/2019
- Proceedings: Petitioner's Notice of Serving Unverified Answers to Respondent's First Set of Interrogatories to Petitioner filed.
- PDF:
- Date: 01/14/2019
- Proceedings: Petitioner's Response to Respondent's First Request for Production of Documents to Petitioner filed.
- PDF:
- Date: 01/14/2019
- Proceedings: Petitioner's Response to Respondent's First Request for Admissions to Petitioner filed.
- PDF:
- Date: 01/03/2019
- Proceedings: Notice of Hearing by Video Teleconference (hearing set for March 28, 2019; 9:00 a.m.; Tampa and Tallahassee, FL).
- PDF:
- Date: 12/20/2018
- Proceedings: Order Granting Continuance (parties to advise status by January 2, 2019).
- PDF:
- Date: 12/19/2018
- Proceedings: Unopposed Motion for Extension of Time and to Continue Final Hearing scheduled for January 9, 2019 filed.
- PDF:
- Date: 11/14/2018
- Proceedings: Respondent's Notice of Service of Interrogatories to Petitioner filed.
- PDF:
- Date: 11/14/2018
- Proceedings: Respondent's First Request for Production of Documents to Petitioner filed.
- PDF:
- Date: 11/08/2018
- Proceedings: Amended Notice of Hearing by Video Teleconference (hearing set for January 9, 2019; 9:00 a.m.; Tampa and Tallahassee, FL; amended as to exhibit due date).
- PDF:
- Date: 09/28/2018
- Proceedings: Notice of Telephonic Pre-hearing Conference (set for January 7, 2019; 10:30 a.m.).
Case Information
- Judge:
- HETAL DESAI
- Date Filed:
- 09/19/2018
- Date Assignment:
- 09/21/2018
- Last Docket Entry:
- 06/28/2021
- Location:
- Tampa, Florida
- District:
- Middle
- Agency:
- ADOPTED IN TOTO
Counsels
-
Verna Bartlett
Post Office Box 342681
Tampa, FL 33694 -
Mark S. Hamilton, General Counsel
Post Office Box 6668
Tallahassee, FL 323146668
(850) 617-8347 -
Mark S. Urban, Esquire
The Capitol, Plaza Level 01
Tallahassee, FL 32399
(850) 414-3789 -
William B. Meacham, Esquire
Address of Record