18-005005 Vmob, Llc vs. Department Of Revenue
 Status: Closed
Recommended Order on Wednesday, May 22, 2019.


View Dockets  
Summary: DOR proved jeopardy finding was appropriate and taxpayer failed to satisfy tax obligations when it failed to file electronically and checks used for tax payment were dishonored by bank.

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.

Select the PDF icon to view the document.
PDF
Date
Proceedings
PDF:
Date: 06/28/2021
Proceedings: Agency Final Order filed.
PDF:
Date: 07/11/2019
Proceedings: Agency Final Order
PDF:
Date: 05/31/2019
Proceedings: Petitioner's Exceptions to Recommended Order filed.
PDF:
Date: 05/22/2019
Proceedings: Recommended Order
PDF:
Date: 05/22/2019
Proceedings: Recommended Order (hearing held March 28, 2019). CASE CLOSED.
PDF:
Date: 05/22/2019
Proceedings: Recommended Order cover letter identifying the hearing record referred to the Agency.
PDF:
Date: 05/13/2019
Proceedings: Petitioner's Proposed Recommended Order filed.
PDF:
Date: 05/13/2019
Proceedings: The Department's Proposed Recommended Order filed.
PDF:
Date: 05/10/2019
Proceedings: Order Granting Extension of Time.
PDF:
Date: 05/09/2019
Proceedings: Petitioner's Unopposed Motion for Extension of Time to File Proposed Recommended Order filed.
PDF:
Date: 04/12/2019
Proceedings: Amended Notice of Filing Transcript.
PDF:
Date: 04/11/2019
Proceedings: Notice of Filing Transcript.
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).
PDF:
Date: 03/21/2019
Proceedings: Petitioner's Exhibit List and Notice of Service filed.
PDF:
Date: 03/21/2019
Proceedings: Petitioner's Witness List filed.
Date: 03/20/2019
Proceedings: Respondent's Proposed Exhibits filed (exhibits not available for viewing).
PDF:
Date: 03/20/2019
Proceedings: Respondents Notice of Filing Exhibits filed.
PDF:
Date: 03/20/2019
Proceedings: Notice of Filing Witness List filed.
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: 01/03/2019
Proceedings: Petitioner's Response to Order Granting Continuance filed.
PDF:
Date: 01/02/2019
Proceedings: Individual Response to Court's Order Granting Continuance filed.
PDF:
Date: 12/20/2018
Proceedings: Order Granting Extension of Time.
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: 12/19/2018
Proceedings: Notice of Appearance (William Meacham) filed.
PDF:
Date: 12/10/2018
Proceedings: Order on Respondent's Request to Take Judicial Notice.
PDF:
Date: 11/30/2018
Proceedings: Request to Take Judicial Notice 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 Set of Interrogatories to Petitioner filed.
PDF:
Date: 11/14/2018
Proceedings: Respondent's First Request for Production of Documents to Petitioner filed.
PDF:
Date: 11/14/2018
Proceedings: Respondent's First Request for Admissions 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: 11/08/2018
Proceedings: Respondent's Notice regarding Filing of Exhibits filed.
PDF:
Date: 09/28/2018
Proceedings: Notice of Telephonic Pre-hearing Conference (set for January 7, 2019; 10:30 a.m.).
PDF:
Date: 09/28/2018
Proceedings: Order of Pre-hearing Instructions.
PDF:
Date: 09/28/2018
Proceedings: Notice of Hearing by Video Teleconference (hearing set for January 9, 2019; 9:00 a.m.; Tampa and Tallahassee, FL).
PDF:
Date: 09/27/2018
Proceedings: Notice of Transfer.
PDF:
Date: 09/26/2018
Proceedings: Respondent's Individual Response to Initial Order filed.
PDF:
Date: 09/26/2018
Proceedings: Notice of Appearance (Mark Urban) filed.
PDF:
Date: 09/19/2018
Proceedings: Initial Order.
PDF:
Date: 09/19/2018
Proceedings: Notice of Final Assessment filed.
PDF:
Date: 09/19/2018
Proceedings: Request for Administrative Hearing filed.
PDF:
Date: 09/19/2018
Proceedings: Agency referral filed.

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

Related Florida Statute(s) (11):

Related Florida Rule(s) (1):