21-000845 Wkdr Ii, Inc. vs. Department Of Revenue Status: Closed Recommended Order on Tuesday, November 30, 2021.

Summary: Because WKDR failed to timely challenge the assessment pursuant to sections 72.011 and 120.80(14)(b)3.b., F.S., WKDR's challenge is jurisdictionally time-barred.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

W KDR II, I NC . ,

Petitioner ,

vs. Case Nos. 21 - 0844

21 - 0845

D EPARTMENT OF R EVENUE ,

Respondent .

/

R ECOMMENDED O RDER

The final hearing in this matter was conducted by Zoom Conference before

Administrative Law Judge Jodi - Ann V. Livingstone of the Division of

Administrative Hearings (DOAH), on August 18, 2021.

A PPEARANCES

For Petitioner: Michael J. Bowen, Esquire

Akerman LLP

50 North Laura Street, Suite 3100

Jacksonville, Florida 32202

For Respondent: J. Clifton Cox, Esquire

John G. Savoca, Esquire

Office of the Attorney General

Revenue Litigation Bureau

The Capitol , Plaza Level 01

Tallahassee, Florida 32399

S TATEMENT OF T HE I SSUE S

Whether WKDR II, Inc. (WKDR) , is jurisdictionally time - barred from

bringing the challenges in Case Nos. 21 - 0844 and 21 - 0845 to contest the

Department of Revenue's (Department) tax assessment and subsequent

freeze of WKDR's bank account to attempt to collect on the assessment.

P RELIMINARY S TATEMENT

On February 19, 2021, WKDR filed a Petition for Chapter 120 Hearing to

contest the Department's Notice of Proposed Assessment (NOPA), dated

January 13, 2020, which assessed sales and use tax, a penalty, and interest

against WKDR follow ing an audit. A few days later, on February 23, 2021,

WKDR filed a separate Petition for Chapter 120 Hearing to contest the

Department's Notice of Intent to Levy (NIL), dated February 18, 2021, which

gave notice that the Department was proceeding to freeze WKDR's bank

account to collect the underlying audit assessment. The Department referred

both petitions to DOAH on March 3, 2021, for the assignment of an

administrative law judge to conduct chapter 120 hearing s .

At DOAH, WKDR's challenge to the NOPA was designated Case No. 21 -

0845 and the challenge to the NIL was designated Case No. 21 - 0844, and

they were both assigned to the undersigned. Both cases are " substantial

interests " proceedings brought under sections 120.569 and 120.57(1), Florida

Statutes.

On March 12, 2021, the Department filed a Motion to Consolidate Cases

and to Bifurcate Issues. The undersigned granted the motion, in part, and

consolidated the two above - styled cases for a hearing on the NOPA and the

NIL.

On May 5, 2021, WKDR filed a Petition to Determine the Invalidity of

Existing Administrative Rule 12 - 6.003. The rule challenge, filed pursuant to

section 120.56(3), was designated Case No. 21 - 1488RX, and assigned to the

undersigned.

On May 12, 2021, the Department filed the Departme nt of Revenue's

Agreed Motion to Consolidate Cases, Agreed Motion for Continuance, and

Unagreed Motion to Bifurcate Issues. The undersigned granted the motion.

With this, WKDR's rule challenge was consolidated with the already

consolidated c hallenges to th e NOPA and NIL , and the proceeding was

bifurcated for a hearing on the threshold jurisdictional issues prior to a final

hearing on the merits. For the challenges to the NOPA and NIL, the

threshold jurisdictional issue raised by the Department was timelines s; for

the rule challenge, the threshold jurisdictional issue raised by the

Department was WKDR's standing.

Prior to the hearing, the parties filed an Amended Joint Pre - Hearing

Stipulation for August 18, 2021 Hearing on Jurisdictional Issues in which

they stipulated to a number of facts. The agreed facts are incorporated in the

findings below, to the extent relevant.

The hearing on the threshold issues was held on August 18, 2021, with

both parties present and appearing from different locations in Florida via

Zoom Conference. WKDR presented the testimony of Mark Smith, CPA.

Respondent presented the testimony of Lisa Weems (Ms. Weems), a Revenue

Specialist III employed by the Department . The Department's Exhibits 1, 2,

5, 7 through 14, 16 through 22, 25, 27 through 33, and 44 through 46 were

admitted into evidence. In addition, portions of the depositions of Douglas

Plattner and Jeffrey Barnard were admitted.

At the close of the hearing, the parties requested an extended deadline of

30 days following DOAH's receipt of the hearing transcript to file post -

hearing submittals. 1 A two - volume Transcript of the final hearing was filed

with DOAH; Volume I was filed on September 14, 2021, and V olume II was

1 By agreeing to an extended deadline for post - hearing submissions beyond ten days after the

filing of the transcript, the parties waived the 30 - day timeframe for issuance of the

Recommended Order. See Fla. Admin. Code R. 28 - 106.216.

filed on September 15, 2021. The parties timely filed post - he aring submittals.

The submittals were duly considered in preparing this Recommended Order.

The undersigned enters this Recommended Order in the above - styled

su bstantial interest proceedings because the determination on the threshold

issues is dispositive of these two cases . Pursuant to an Order Se vering Case s ,

issued November 30 , 2021 , Case No. 21 - 1488RX has been severed from th ese

consolidated case s , and a separate order will be entered on the issue of

standing.

All references to the Florida Statutes and the Florida Administrative Code

are to the 2020 versions.

F INDINGS OF F ACT

1. The Department administers Florida 's sales tax statutes and performs

audits to ensure compliance with sales tax laws.

2. WKDR is a Ford franchise car dealership operating as LaBelle Ford.

WKDR is organized as an " S " corporation and is wholly owned by Douglas

Plattner (Mr. Plattner).

3. WKDR's address is 851 South Main Street, LaBelle, Florida 33935

(851 South Main Street ).

4. Mark Smith (Mr. Smith) is a self - employed certified public accountant

(CPA) at the firm of Smith and Waggoner CPAs. He is the CPA for

Mr. Plattner and WKDR.

5. Mr. Smith's business mailing address is 115 Tamiami Trail North,

Suite 7, Nokomis, Florid a 34275 (115 Tamiami Trail).

6. On or about March 21, 2019, the Department began a sales tax audit of

WKDR for the period of March 1, 2016, through February 28, 2019 (audit

period). WKDR was notified of the audit through a Notice of Intent to Audit

Books a nd Records, dated March 21, 2019.

7. Jeff Barnard (Mr. Barnard) was a tax auditor for the Department.

Mr. Barnard was responsible for examining the books and records of various

taxpayers for compliance with Florida tax laws.

8. Mr. Barnard retired from the Department in May 2021. He was

employed by the Department for 30 years. He spent the last 15 years with the

Department as a Tax Auditor IV Ð the most senior tax auditor position at the

Department.

9. Mr. Barnard was responsible for the tax audit of WKDR for the audit

period.

10. On or about July 30, 2019, Mr. Smith sent the Department a fully

executed Power of Attorney/Declaration of Representative form (POA form) to

appear as WKDR's representative in connection with the Department's audit .

11. The POA form was completed and signed by WKDR's owner

(Mr. Plattner) and its CPA (Mr. Smith). The POA form gave Mr. Smith

authority to speak and act on WKDR's behalf for the Department's audit.

12. The POA form correctly states the mailing address es of both WKDR

and its CPA/representative, Mr. Smith. It also correctly states the e - mail

address and fax number for Mr. Smith.

13. Mr. Smith entered WKDR's address in section 1 of the POA form. The

POA form included spaces for a contact person's name, telephone number ,

and fax number at WKDR , but those spaces were left blank in the form

signed by Mr. Smith and Mr. Plattner .

14. The POA form signed by both Mr. Smith and Mr. Plattner set forth the

name, address, telephone number, and fax number of Mr. SmithÔs CPA firm

in section 2 of the POA form .

15. Section 6 of the POA form provides as follows:

Notices and Communication. Do not complete

Section 6 if completing Section 4.

Notices and other written communications will be

sent to the first representative listed in Part I,

Section 2, unless the taxpayer selects one of the

options below. Receipt by either the representative

or the taxpayer will be considered receipt by both.

a . If you want notices and communications sent to

both you and your representative, check this box.

b. If you want notices or communications sent to

you and not your representative, check this box.

16. Mr. Smith completed section 6 by checking option " a , " indicating that

they wished to have notices and communication sent to both the taxpayer

(WKDR) and the representative (Mr. Smith).

17. Mr. Smith's e - mail address was added on the POA form by the

Department's employee, Lisa Weems, after she called Mr. Smi th's telephone

number to obtain his e - mail address. All other information was added by

Mr. Smith after consultation with Mr. Plattner , before they both signed the

form.

18. Throughout the audit, the Department 's auditor, Mr. Barnard,

primarily communicated with WKDR through its designated

representative Ð Mr. Smith Ð at his mailing address and e - mail address. This

included multiple requests for documents. At times, Mr. Barnard

communicated directly with Mr. Plattner while copying Mr. Smith on the

correspondence .

19. Mr. Barnard sent a letter dated November 14, 2019, by regular mail,

to WKDR at 851 South Main Street, with a copy to Mr. Smith at

115 Tamiami Trail. Mr. Smith testified that he received and read this letter.

20. The November 14 letter provided WKDR and Mr. Smith with notice

that, as things stood on that date, a NOPA was imminent. The letter stated,

in pertinent part:

On September 20th, we wrote you a letter

requesting the information needed to complete the

audit of WKDR II Inc. and the DR54 Formal No tice

of Demand to Produce Certain Records. The letter

stated that your failure to provide the information

be [sic] September 27, 2019 may result in an

assessment. That is, the implementation of

alternative audit procedures to estimate a liability

based on the best available information.

As of the date of this letter you have not complied

with our request. Therefore, enclosed is the Notice

of Intent to Make Audit Changes (DR1215) and the

audit work papers, which are an estimate based

upon the best informati on available as provided in

Section 212.12(5)(b), Florida Statutes. You have

30 days to review the audit adjustments,

which expires on December 16, 2019.

* * *

If we do not hear from you by December 16, 2019 ,

the audit file will be sent to Tallahassee so that the

Notice of Proposed Assessment (NOPA) can be

issued to you. The NOPA is the formal notice of the

amount due. The NOPA will also provide the

procedures for filing informal and formal protests.

21. Th e Notice of Intent to Make Audit Changes, which was included with

the November 14 letter, listed a " balance due through 11/14/2019 " of

$1,157,025.16. This sum included taxes of $801,967.01, a penalty of

$200,491.75, and interest of $154,566.40. The notice also explicitly laid out

WKDR's opportunities to informally protest this preliminary sum through a

conference with the auditor or t he auditor's supervisor. It provided that after

the 30 - day informal conference period expired, a NOPA would be issued.

22. On December 20, 2019, Mr. Barnard sent an e - mail to Mr. Plattner

with a copy to Mr. Smith. Attached to the e - mail was a letter of th e same

date. The letter provided as follows:

On November 14, 2019, a Notice of Intent to Make

Tax Audit Changes (DR - 1215) was issued with

additional tax due of $801,967.00. The 30 day

informal protest period with the Service Center was

up December 13, 2019 . [ 2 ] Although your

representative, Mark Smith, did provide some sales

invoices after issuance of the DR - 1215 they did not

represent a full month of invoices as requested.

Please be advised all sales invoices for December

2018 must be provided by January 3 , 2020 for any

changes in the assessment to be considered. These

invoices should consist of same for all new and used

vehicle sales, parts sales, service invoices/tickets,

and autobody invoices for December 2018.

23. As indicated in the December 20 letter , one month before the NOPA

was issued, Mr. Barnard notified Mr. Smith and Mr. Plattner that the 30 - day

informal protest period expired on December 13, 2019.

24. Mr. Smith's testimony on this matter was evasive. At first, h e

acknowledged that he received t he December 20 letter . However, after

objection from WKDR's counsel, Mr. Smith backtracked and denied receipt.

His attempted denial was not credible and is not credited.

25. The undersigned finds that Mr. Smith received the December 20

letter.

26. Mr. Ba rnard sent another letter, dated January 7, 2020, by regular

mail to Mr. Plattner, and by e - mail to both Mr. Plattner and Mr. Smith,

which stated as follows:

Please be advised the information necessary to

make an adjustment to the audit results issued on

N ovember 14, 2019 has not been provided.

As stated in our December 20, 2019 letter this

information was sales invoices for all new and used

vehicle sales, parts sales, service invoices/tickets,

and autobody invoices for the entire month of

December 2018.

2 The Notice of Intent to Make Tax Audit Changes sent on November 14 provided a deadline

of December 13 for the 30 - day informal conference period, while the e - mail sent on December

20 referenced a deadline of December 16. The discrepancy in the December 20 letter is

immaterial a s both deadlines (December 13 and 16) had passed by the date of the December

20 letter.

T he audit will be closed and a Notice of Proposed

Assessment will be issued shortly.

27. Once again, Mr. SmithÔs testimony was evasive. After seemingly

admitting he received and read the January 7 letter, Mr. Smith testified that

he did not receive the Jan uary 7 letter. The undersigned found Mr. Smith's

testimony on this point wholly untruthful.

28. At the hearing, during cross - examination, the Department's counsel

asked Mr. Smith about his actions and impressions after receipt of the

January 7 letter in t he following exchange :

Q. Let's go to Exhibit 22, which is Bates Number

00081. This is another e - mail sent to you on

January 7th, 2020 to Mr. Plattner showing a

carbon copy to Mr. Mark Smith CPA POA. The

third sentence states; " The audit will be closed and

a notice of proposed assessment will be issued

shortly. " Does that mean that the audit is still open

or the audit is closed?

A. That, like I said, I mean, I've -- I've dealt with

audits where they say they're going to do this and

do that and it's taken t hem two years to send

anything.

Q. This letter dated January 7th, 2020 does not

give a new deadline, does it?

A. It does not appear to but -- yeah, it does not

appear to.

Q. In fact, it says the audit is closed. That means

that it's done, right?

A. No. I don't -- I -- not necessarily.

Q. It also says that the notice of proposed

assessment will be issued shortly. So you knew at

this time, the NOPA was imminent, right?

A. Not necessarily.

Q. Is there any language in this letter indicating

that WKDR has any more time to provide

additional documents?

A. I've worked with the State before and they've

provided us additional time quite often.

Q. In fact, the auditor did provide you a deal -- a

great deal of additional time to have the audit,

didn't he?

A. Well, we provided him so many documents that

we thought he needed more time too.

29. The whole tenor of Mr. Smith's testimony was to acknowledge that he

read and understood the January 7 letter to say the NOPA was imminent,

but that he knew from his exper ience the NOPA was " not necessarily "

imminent. Notably, when asked if he knew at that time that the NOPA was

imminent , Mr. Smith did not say that he did not know that because he did

not receive or read the January 7 letter when it was sent to him by e - mail .

30. Mr. Smith provided answer s to these and several other questions

about what he did or did not do in response to the January 7 letter. It was not

until after an objection by WKDR's counsel that , as before, Mr. Smith

backtracked to say that he did not receive the letter.

3 1 . In making the finding that Mr. Smith was untruthful when he

testified that he had not received the January 7 letter, the undersigned had

the distinct opportunity to observe the demeanor of Mr. Smith during

testimon y on this issue. He was not credible and his belated denial is not

credited .

32. The undersigned finds that Mr. Smith received the January 7 letter,

reviewed it, and hoped that he could buy more time as he had thought he

might be able to.

Testimony of Lisa Weems

3 3 . Ms. Weems is a Revenue Specialist III for the Department. She has

worked for the Department, in its Complian ce Standards Section, for over 15

years. In addition to other tasks, Ms. Weems is responsible for printing

NOPAs to send out to taxpa yers and their representatives. Ms. Weems

testified in great detail about the process she uses to send out NOPAs.

3 4 . When a NOPA is issued, it is uploaded to the Department's system

overnight and cannot be printed until the following morning. Because of t his,

Ms. Weems sends out NOPAs only four days a week Ð Tuesday s , Wednesday s ,

Thursday s , and Friday s .

3 5 . Ms. Weems prints and mails out approximately 400 NOPAs per week.

On the day of the final hearing, she had mailed out 88 NOPAs.

3 6 . Ms. Weems has a syst em in place to keep track of the NOPAs she

sends out.

3 7 . Ms. Weems clearly and credibly testified about the process she used to

send out NOPAs and when and by what means she used to send the NOPA to

WKDR and its representative in this case.

3 8 . Each NOP A is mailed out in a packet that includes four documents:

the NOPA, NOPA Remittance Coupon, Tax Audit Satisfaction Survey, and a

document titled How to Pay Your Audit Assessment and Notice of Taxpayer

Rights. The packets are sent by USPS first - class mail.

3 9 . WKDR's NOPA was issued on January 13, 2020. It had to load in the

Department's system overnight, so it was printed on January 14, 2020.

40 . WKDR's NOPA assessed taxes of $801,967.01, a penalty of

$200,491.75, and interest of $166,431.12, for a total due by WKDR of

$1,168,889.88 following the audit. 3

3 The amount of the taxes assessed and penalty remained the same as was listed in the

Notice of Intent to Make Audit Changes . The amount of the interest had increased. The

interest listed in the Notice of Intent to Make Audit Changes was for the period up to

November 14, 2019.

41 . The NOPA specified that the deadline to request a formal hearing

before DOAH was May 12, 2020, or 60 days from the date the assessment

becomes a final assessment.

4 2 . The Notice of Taxpayer R ights provided detailed instructions on how

to contest the assessment and provid ed further details on the timelines and

deadlines to do so.

4 3 . Ms. Weems sent WKDR and Mr. Smith copies of the NOPA b y USPS

first - class mail on January 14, 2020.

4 4 . On January 14, 2020 (the day after the NOPA was uploaded),

Ms. Weems printed an original and copy of WKDR's NOPA. She placed the

original NOPA and the other three documents in a window envelope ,

addressed t o WKDR at 851 South Main Street.

45. A copy of the NOPA , along with the three other documents , were

placed in another envelope, addressed to Mark Smith , CPA, at his business

mailing address, 115 Tamiami Trail.

46. Ms. Weems testified that she create d a m ail log sheet, wrap ped the log

sheet around the envelopes, and place d both of these NOPA envelopes in the

outgoing mail basket .

47. After placing the items in the outgoing mail basket, a Department

employee from Building L picks up the outgoing mail and mails it out .

Ms. Weems testified that she has mailed NOPAs this wa y for over 10 years.

48. Ms. Weems testified that it was her practice, and what she was taught

by the Department, to send NOPAs that had assessments for over

$100,000.00 by fax and e - mail, in addition to regular mail. 4 WKDR's

assessment was for an amount greater than $100,000.00.

49. On January 16, 2020, Ms. Weems sent a copy of the NOPA to

Mr. Smith by fax transmission.

4 It must be noted that the Department's internal policy to send NOPAs with assessments

over $100,000.00 by e - mail and fax is an unadopted rule; h owever, it is not necessary to rely

on it as the basis for the determination in this matter. See § 120.57(1)(e)1., Fla. Stat.

50. Ms. Weems sent the fax to Mr. Smith's fax number, which wa s

provided on the POA form. Ms. Weems used a fax coversheet when sending

the fax. The coversheet recorded several important pieces of information. It

provided the case number and the taxpayer's name (WKDR). Two boxes on

the fax coversheet were checked Ð a bo x indicating there was a " POA " (Power

of Attorney) in the file and a box indicating the NOPA was to be sent to the

" POA . "

51. Ms. Weems also made some notes on the fax coversheet. She wrote:

" original notice mailed 1/14/20, " " email: [e-mail], " and " (8) pages. "

Ms. Weems testified that the reference to eight pages represented the amount

of pages she faxed. These pages included the four documents sent by USPS

first - class mail mentioned above.

52. After faxing the documents to Mr. Smith's fax num ber, Ms. Weems

received a fax transmission report. The report indicated " Results OK. " The

term " OK " on a fax transmission report is generally accepted as meaning that

the transmission was completed successfully.

53. On January 16, 2020, Ms. Weems also sent a copy of the NOPA and

Notice of Taxpayer Rights to Mr. Smith by e - mail.

54. Ms. Weems sent the e - mail to Mr. Smith at [e-mail] Ð the

e - mail address she obtained from Mr. Smith's office, and which he confirmed

was his through testimony at the heari ng.

55. The e - mail's subject line stated " Audit Number 200262550 - 010

WKDR II, INC. " The e - mail stated as follows:

1) Please respond back to me by e - mail letting

me know you did receive the Notice of

Proposed Assessment (Nopa) and Taxpayer

Rights by Email and Fax please.

2) Good afternoon, Mr. Smith. I'm e - mailing you the

Notice of Proposed Assessment (Nopa) & Taxpayer

Rights. I also faxed you the Notice of Proposed

Assessment (Nopa) & Taxpayer Rights to fax

number 941 - 866 - 7691. The Original Notice of

Proposed Assessment (Nopa) & Taxpayer Rights

was mailed out on 1/14/2020. Any questions call the

Nopa Line at 850 - 617 - 8565. Thanks, Lisa Weems.

56. The e - mail included an attachment labeled " 3125_001.pdf. "

Ms. Weems testified that the attachment was a co py of the NOPA and

Taxpayer Rights.

57. Ms. Weems requested a " delivery receipt " and " read receipt " through

her e - mail platform for the e - mail she sent to Mr. Smith. This was her

customary practice when sending e - mails.

58. A few seconds after sending her e - mail, she received a " delivery

receipt " confirmation that the e - mail was delivered to [e-mail].

59. Shortly thereafter, Ms. Weems received a " read receipt " confirmation

that her e - mail was received by Mr. Smith and was " read. "

60. The use of delivery and read receipts are not novel practices. Delivery

and read receipts are used by a sender of an e - mail to confirm that the e - mail

sent has been delivered to the addressee and, subsequently " read , " that is ,

opened by the recipient.

61. Ms. Weems keeps a monthly log of the NOPAs she sends out by fax

and e - mail. Ms. Weems' s monthly log for January 2020 includes entries that

confirm she sent the WKDR NOPA by e - mail and fax to Mr. Smith at the

contact information he provided.

62. In addition to her personal monthly log, Ms. Weems also used SAP Ð a

Department computer system that employees work in every day Ð to

document her activities. On January 16, 2020, Ms. Weems made a notation in

SAP that stated as follows: " I faxed the Notice of Pro posed Assessment

(NOPA) & taxpayer rights to Mark Smith on 1/16/20 to fax number 941 - 866 -

7691. I e - mailed the Notice of Proposed Assessment (NOPA) and taxpayer

rights to Mark Smith on 1/16/20 to e - mail address ([e-mail]). See

attachments and notes. "

Testimony of Mark Smith

63. Mr. Smith testified that he did not receive the NOPA by USPS first -

class mail, fax, or e - mail. If the undersigned took Mr. Smith's testimony as

true, all three of the Department's avenues of sending the NOPA failed.

64. Mr. Smith testified that the NOPA, sent by USPS first - class mail, in

the same fashion used for several other letters that he had received from the

Department, was not received.

65. Other than Mr. Smith's denial, WKDR provided no evidence that the

NOPA and acc ompanying documents Ms. Weems mailed in separate

packages to WKDR at its address and to WKDR's representative's address

were not received.

66. Mr. Smith testified that during the time the NOPA was sent, his

business utilized an electronic faxing service c alled MyFax.com. Through this

service, he received faxes in e - mail format, with the contents of the fax

attached to the e - mail as a PDF document.

67. Mr. Smith testified that he did not receive the fax from Ms. Weems.

Mr. Smith also testified that he rarel y read faxes because " 90 plus percent of

our faxes are payroll - related " and belonged to his business partner .

Mr. Smith did not credibly explain how he comes to know about the ten

percent of faxes directed to him. While perhaps his business partner screen s

faxes, it is inconceivable that a business firm would not ensure that incoming

faxes are directed to the person to whom they are sent. That is particularly

true where, as here, Mr. Smith has provided his business fax number as a

means to give him notices regarding WKDR's audit.

68. Although the Department provided documentation of a delivery and

read receipt of the NOPA sent by e - mail to Mr. Smith, Mr. Smith testified

that he did not receive it. Mr. Smith offered no credible explanation for the

delivery and read receipts. Once again, it is not credible that a CPA who

serves as the POA for taxpayer WKDR would not be reviewing e - mails

delivered to his e - mail address, when his office has provided tha t e - mail

address to the Department. Notably, he acknowledged reviewing other e - mail

communications from the Department with regard to WKDR's audit.

Mr. Smith's feigned ignorance of an e - mail delivered to him and opened by

him is not credible and is not cr edited.

69. The competent substantial evidence establishes that the Department

mailed the NOPA to both Mr. Smith and WKDR at the addresses provided on

the POA form.

70. The testimony that Mr. Smith did not receive the NOPA is not

credible . WKDR did not deny that it received the NOPA mailed to it; WKDR

offered no testimony on the subject . 5 The NOPA was mailed to the same

addresses provided by Mr. Smith and Mr. Plattner on the POA form and used

by the Department to successfully communicate with Mr. Smith d uring the

audit.

71. WKDR and Mr. Smith were on notice that a NOPA was forthcoming.

The Department advised WKDR and Mr. Smith by letter through regular

mail and e - mail, on at least two occasions, that a NOPA was going to be

issued and that the Department anticipated an assessment of additional

taxes of approximately $801,967.00.

72. The Department provided notice of the NOPA in a manner reasonably

calculated to inform WKDR and its representative of WKDR's rights and of

the deadlines to take action to prot ect those rights.

73. WKDR and the Department communicated frequently during the

audit, but after issu ance of the NOPA, communications with WKDR and

Mr. Smith ceased for several months. Mr. Smith did not reach out to the

Department to find out why communi cations ceased . The reasonable

inference is that Mr. Smith was fully aware of why the previous

communications during the audit stopped: because the audit had culminated

5 In its post - hearing submittal, WKDR argued that the NOPA mail should have been sent to

Mr. Plattner. But the NOPA package was addressed to WKDR, the taxpayer, at the mailing

address given on the NOPA. WKDR had the opportunity in the POA form to designate

Mr. Plattner as the taxpayer contact person but chose not to do so.

in the NOPA and it was up to WKDR to contest the NOPA in a timely

hearing request .

74. On or around February 18, 2021, the Department issued an NIL

against WKDR, by which it notified WKDR that it intended to freeze funds

from WKDR's bank account in the amount of $999,999.99.

75. The NIL provided that WKDR had 21 days from the date of recei pt of

the NIL to dispute the matter.

76. On February 19, 2021, WKDR submitted a petition for a chapter 120

administrative hearing to challenge the NOPA. WKDR's petition challenging

the Department's NOPA was filed with the Department 403 days after the

dat e on the NOPA (January 13, 2020) and 286 days after the deadline for

filing a petition to request an administrative hearing had passed.

77. On February 23, 2021, WKDR timely filed a petition for an

administrative hearing to dispute the NIL. WKDR's dispute of the NIL is

solely based on its challenge to the NOPA , and its claim that it did not

receive the NOPA when issued the year before .

78. WKDR failed to timely exercise its opportunity to protest the amount

of the Department's assessment, the underlying au dit findings, and the

methods the Department used to reach the amount in the assessment.

79. There is no claim by WKDR in this case that the content of the Notice

of Taxpayer R ights was unclear regarding the deadline to request a hearing

or the manner in which a hearing must be requested; its claim is solely that

it did not receive the NOPA and the accompanying Notice of Taxpayer

Rights , a claim which is not credible .

80. In sum , the persuasive and credible evidence adduced at hearing

demonstrates that the Department sent the NOPA to WKDR's representative

by USPS first - class mail, e - mail, and fax, and to WKDR directly by USPS

first - class mail ; and that Mr. Smith received the NOPA by USPS first - class

mail, e - mail, and fax, and that WKDR received the NOPA by USPS first - class

mail.

8 1 . WKDR did not submit a timely request for hearing to dispute the

NOPA.

C ONCLUSIONS OF L AW

8 2 . DOAH has jurisdiction over the parties and the subject matter of this

cause pursuant to sections 120.569, 120.57(1), 120.80(14), and 72.011(1)(a),

Florida Statutes.

8 3 . Section 120.80(14) provides as follows:

(b) Taxpayer contest proceedings. Ð

1. In any administrative proceeding brought

pursuant to this chapter as authorized by

s. 72.011(1), the taxpayer shall be designated the

" petitioner " and the Department of Revenue shall

be designated the " respondent, " except that for

actions contesting an assessment or denial of

refund under chapter 207, the Department of

Highway Safety and Motor Vehicles shall be

designated the " respondent, " and for actions

contesting an assessment or denial of refund under

chapters 210, 550, 561, 562, 563, 564, and 565, t he

Department of Business and Professional

Regulation shall be designated the " respondent. "

2. In any such administrative proceeding, the

applicable department's burden of proof, except as

otherwise specifically provided by general law,

shall be limited t o a showing that an assessment

has been made against the taxpayer and the

factual and legal grounds upon which the

applicable department made the assessment.

3.a. Prior to filing a petition under this chapter, the

taxpayer shall pay to the applicable depa rtment the

amount of taxes, penalties, and accrued interest

assessed by that department which are not being

contested by the taxpayer. Failure to pay the

uncontested amount shall result in the dismissal of

the action and imposition of an additional penalty

of 25 percent of the amount taxed.

b. The requirements of s. 72.011(2) and (3)(a) are

jurisdictional for any action under this chapter to

contest an assessment or denial of refund by the

Department of Revenue, the Department of

Highway Safety and Motor Vehicles, or the

Department of Business and Professional

Regulation.

8 4 . Section 72.011(2) provides, in pertinent part:

(2)(a) An action may not be brought to contest an

assessment of any tax, interest, or penalty assessed

under a section or chapter specified in subsection

(1) more than 60 days after the date the assessment

becomes final. An action may not be brought to

contest a denial of refund of any tax, interest, or

penalty paid under a section or chapter specified in

subsection (1) more than 60 days after the date the

denial becomes final.

(b) The date on which an assessment or a denial of

refund becomes final and procedures by which a

taxpayer must be notified of the assessment or of the

denial of refund must be established:

1. By rule adopted by the Department of Revenue;

2. With respect to assessments or ref und denials

under chapter 207, by rule adopted by the

Department of Highway Safety and Motor Vehicles;

3. With respect to assessments or refund denials

under chapters 210, 550, 561, 562, 563, 564, and

565, by rule adopted by the Department of

Business and Professional Regulation; or

4. With respect to taxes that a county collects or

enforces under s. 125.0104(10) or s. 212.0305(5), by

an ordinance that may additionally provide for

informal dispute resolution procedures in

accordance with s. 213.21. (empha sis added).

85. This is a bifurcated proceeding. The issue before the undersigned in

this proceeding is whether the Department issued a NOPA that triggered the

jurisdictional time limitations of section 72.011. See also § 120.80(14)(b)3.b.,

Fla. Stat. I f so, the issue becomes whether WKDR is jurisdictionally barred

from contesting the tax assessment by failing to timely petition the

Department for a hearing . A determination that WKDR's petition purporting

to contest the NOPA was untimely , such that WKDR is jurisdictionally

barred from contesting the NOPA would fully resolve these proceedings, as

the undersigned would lack jurisdiction to hear the petitions on the merits.

8 6 . The Department asserts that WKDR is jurisdictionally time - barred

from contesting t he Department's tax assessment ( Case No. 21 - 08 45) and the

subsequent freeze of WKDR's bank account to attempt to collect on the

assessment ( Case No. 21 - 08 44).

8 7 . The burden of proof in an administrative proceeding, absent a

statutory directive to the contrary, is on the party asserting the affirmative of

the issue. Dep't of Transp. v. J.W.C. Co. , 396 So. 2d 778 (Fla. 1st DCA 1981);

see also Dep't of Banking & Fin ., Div. of Sec. & Investor Prot. v. Osborne

Stern & Co. , 670 So. 2d 932, 935 (Fla. 1996). The standard of proof is the

preponderance of the evidence standard. § 120.57(1)(j), Fla. Stat.

8 8 . As the party asserting the affirmative of the issue, the Departmen t

has the burden of proving by a preponderance of the evidence that it provided

notice of the issuance of the NOPA to WKDR and that WKDR did not timely

dispute it.

89 . After the Department assesses taxes set forth in a NOPA , a taxpayer

may contest the assessment as specified in section 72.011.

9 0 . Pursuant to section 72.011(2), a taxpayer has 60 days from the date an

assessment becomes final to file a petition for an administrative hearing. The

requirements of section 72.01 1(2) are jurisdictional; failure to file a petition

in that time period precludes DOAH from entertaining jurisdiction over the

matter. See Dep ' t of Rev . v. Nu Ï Life Health & Fitness C tr. , 623 So. 2d 747,

752 (Fla. 1st DCA 1992); see also § 72.011(5), Fla. S tat.

9 1 . Section 72.011 requires the Department to adopt rules that establish

the date an assessment becomes final and procedures by which a taxpayer

must be notified of the assessment.

9 2 . Pursuant to its rulemaking authority in sections 72.011(2), 213.06 (1),

and 213.21(1), Florida Statutes, the Department promulgated Florida

Administrative Code Rule 12 - 6.003 to implement sections 72.011(2),

213.21(1), and 213.34, Florida Statu t es.

9 3 . Rule 12 - 6.003(1) partially carries out the legislative mandate in

section 72.011(2)(b)1. The rule, among other things, clearly establishes the

date an assessment becomes final. It provides in pertinent part:

(1)(a) A taxpayer may secure review of a Notice of

Proposed Assessment (Assessment) by

implementing the provisions of this section.

(b) To secure review of an Assessment, a taxpayer

must file a written protest postmarked or faxed

within 60 consecutive calendar days (150

consecutive calendar days if the Assessment is

addressed to a person outside the United States)

fr om the date of issuance on the Assessment.

(c) Protests postmarked or faxed more than 60

consecutive calendar days (150 consecutive

calendar days if the Assessment is addressed to a

person outside the United States) after the date of

issuance on the Asses sment will be deemed late

filed, and the Assessment becomes final for

purposes of chapter 72, F.S., upon the expiration of

60 consecutive calendar days (150 consecutive

calendar days if the Assessment is addressed to a

person outside the United States) aft er the date of

issuance on the Assessment, unless the taxpayer

has timely secured a written extension of time

within which to file a protest.

(d)1. A taxpayer may request an extension of time

for filing a protest by mailing or faxing a written

request to the address or fax number designated on

the Assessment. In order for the taxpayer's request

to be considered timely, the request must be

postmarked or faxed within 60 consecutive

calendar days (150 consecutive calendar days if the

Assessment is addressed t o a person outside the

United States) from the date of issuance on the

Assessment. Each extension of time will be for 30

consecutive calendar days. Within a 30 consecutive

calendar day extension period, the taxpayer may

submit a request in writing to the a ddress or fax

number designated on the Assessment for an

additional 30 consecutive calendar day extension

within which to submit a written protest.

2. Failure to mail or fax the written protest or

failure to mail or fax a written request for an

additional extension within a 30 consecutive

calendar day extension period shall result in

forfeiture of the taxpayer's rights to the

proceedings provided by this rule and the proposed

assessment will become a final assessment for

purposes of chapter 72, F.S., at th e expiration of

the extended filing period. (emphasis added).

9 4 . The rule does not define the term " date of issuance, " which is the

operative date when calculating the 60 - day period to determine finality, but

it does not have to. The most reasonable inte rpretation of the " date of

issuance on the assessment " issued to WKDR is the date listed at the top of

the NOPA Ð January 13, 2020.

9 5 . The NOPA specifically stated that the deadline to request a formal

hearing before DOAH was May 12, 2020, or 60 days from the date the

assessment becomes a final assessment.

9 6 . It is clear that the Department has promulgated a rule that satisfies

the first directive of the statute Ð it establishes the date on which an

assessment becomes final. It is equally clear that the rule does not satisfy the

statute's second directive Ð it does not set forth procedures by which a

taxpayer must be notified.

9 7 . The Department argues that the POA form adopted and incorporated

by reference in Florida Administrative Code Rule 12 - 6.0015 (titled Criteria

for Qualified Representatives), sets forth the " procedures " required by section

72.011(2). Consistent with its title, rule 12 - 6.0015 speaks to who may

represent a person in a matter before the Department as a qualified

representa tive.

9 8 . The POA form is the form used by taxpayers to designate attorneys or

other qualified representatives to communicate with the Department on their

behalf. The form provides information on what it means to be a qualified

representative, and require s those completing the form to provide contact

information for the taxpayer and its qualified representative if one is

designated. The only portion of the form that could be said to arguably set out

any " procedures " is section 6 , which provides that receipt of communications

from the Department by either the representative or the taxpayer will be

considered receipt by both. But nothing in the POA form addresses the

procedures by which the taxpayer is to be notified of an assessmen t.

99 . The argument that the POA form establishes procedures by which the

taxpayer must be notified is rejected.

100 . WKDR argues that the Department's failure to enact a rule adopting

procedures prevents the Department from being able to meet its burde n of

proving that it provided notice of the NOPA to WKDR. WKDR argues that if

there is no rule explaining the procedure by which a taxpayer must be

notified of an assessment, it is impossible to determine whether notice to

WKDR was legally sufficient. Acce pting WKDR's argument would mean that

the Department cannot and has not iss ued any legally sufficient NOPAs to

notify taxpayers.

10 1 . In State of Florida, Department of Revenue v. Ray Construction of

Okaloosa County, 667 So. 2d 859 (Fla. 1st DCA 1996), the Court rejected this

argument. The Court overturned the trial court's ruling that the 60 - day

deadline in section 72.011(2) was tolled because the Department failed to

sufficiently promulgate rules of procedure by which the taxpayer shall be

notified as req uired by section 72.011(2). The Court held that " the absence of

a rule does not overcome the fact of actual notice[.] " Id . at 862.

10 2 . The undersigned finds that the absence of a rule that promulgates

the " procedures " by which taxpayers are to be notified of assessments does

not overcome the fact that WKDR was actually notified of the NOPA. The

Department's failure to promulgate rules o f procedure for notice does not

nullify the Department's issuance of every NOPA, incl uding the one at issue

in this case. While the absence of a promulgated procedural rule might

foreclose the Department from relying on constructive notice in a given case,

the absence of a rule cannot overcome the fact of actual notice as found here.

10 3 . The Department proved by a preponderance of the evidence that it

sent the NOPA by U.S. first - class mail to WKDR and its representative,

Mr. Smith.

10 4 . Proof of mailing of a document to the correct address creates a

presumption that the item mailed was, i n fact, received. W.T. Holding, Inc. v.

State Ag . for Health Care Admin. , 682 So. 2d 1224, 1225 (Fla. 4th DCA 1996).

" [P]roof of general office practice satisfies the requirement of showing due

mailing. " See Brown v. Giffen Indus., Inc. , 281 So. 2d 897, 900 (Fla. 1973).

The presumption, however, is rebuttable. W.T. Holding , Inc. , 682 So. 2d at

1225 . " [T]he denial of receipt does not automatically overcome the

presumption but instead creates a question of fact which must be resolved by

the trial court. " Scutieri v. Miller , 584 So. 2d 15, 16 (Fla. 3d DCA 1991).

105 . WKDR offered no evidence to rebut the presumption that it received

the NOPA.

106 . Mr. Smith's testimony claiming he did not receive the NOPA mailed

to him was not credible and therefor e insufficient to rebut the presumption of

receipt.

107 . In addition , the undersigned conclude s that the Department proved

by a preponderance of the evidence that it sent the NOPA by e - mail and fax

to WKDR's representative on January 16, 2020, and that it was received in

both formats.

10 8 . After receiving actual notice of the assessment and actual notice of

the procedures and information to contest the assessment, WKDR did not

dispute the NOPA within 60 days of the date of issuance on the NOPA , or

within 60 days thereafter (that is, within 60 days after the assessment

bec ame final).

Conclusion

10 9 . The Department met its burden of proving that it served a NOPA

with an issuance date of January 13, 2020, on WKDR and its representative

by U.S. firs t - class mail, and, in addition, on WKDR's representative by e - mail

and fax. The Department met its burden of proving that the NOPA and

Notice of Taxpayer Rights were received by WKDR and by its representative.

WKDR had actual notice of the NOPA and of its right to contest it.

110 . WKDR submitted its petition for a formal administrative hearing to

contest the assessment well after May 12 , 2020, which is 60 days after the

assessment became final. Because WKDR failed to file a timely challenge

pursuant to sect ions 72.011 and 120.80(14)(b)3.b., WKDR's challenge to the

assessment ( Case No. 21 - 0845) is jurisdictionally time - barred.

1 11 . Because the only basis for WKDR's challenge to the Department's

Notice of Intent to Levy ( Case No. 21 - 0844) was WKDR's untimely challenge

to the underlying assessment in Case No. 21 - 0845, Case No. 21 - 0844 also

may not proceed.

1 12 . DOAH does not have jurisdiction to hear the merits of Case Nos. 21 -

0844 and 21 - 0845.

R ECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

R ECOMMENDED that the Department of Revenue enter a final order

dismissing DOAH Case Nos. 21 - 0844 and 21 - 08 45.

D ONE A ND E NTERED this 30th day of November , 2021 , in Tallahassee,

Leon County, Florida.

S

J ODI - A NN V. L IVINGSTONE

Administrative Law Judge

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 30th day of November , 2021 .

C OPIES F URNISHED :

Mark S. Hamilton, General Counsel J. Clifton Cox, Esquire

Department of Revenue Office of the Attorney General

Post Office Box 6668 Revenue Litigation Bureau

Tallahassee, Florida 32314 - 6668 The Capitol , Plaza Level 01

Tallahassee, Florida 32399

Kristian Oldham, Esquire

Department of Revenue Allison M. Dudley, Esquire

Post Office Box 6668 Office of the Attorney General

Tallahassee, Florida 32314 - 6668 R evenue Litigation Bureau

The Capitol , Plaza Level 01

Jacek Stramski, Esquire Tallahassee, Florida 32399 - 1050

Department of Revenue

Post Office Box 6668 John G. Savoca, Assistant Attorney General

Tallahassee, Florida 32314 - 6668 Office of the Attorney General

Revenue Litigation Bureau

Doug Plattner The Capitol , Plaza Level 01

3118 Walter Travis Drive Tallahassee, Florida 32399

Sarasota, Florida 34240

Michael J. Bowen, Esquire

James H. Sutton, Esquire Akerman LLP

Moffa, Sutton & Donnini, PA 50 North Laura Street, Suite 3100

8875 Hidden River Pkwy, Suite 230 Jacksonville, Florida 32202

Tampa, Florida 33637 - 2087

James A. Zingale, Executive Director

Department of Revenue

Post Office Box 6668

Tallahassee, Florida 32314 - 6668

N OTICE OF R IGHT T O S UBMIT E XCEPTIONS

All parties have the right to submit written exceptions 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.