STATE OF FLORIDA DEPARTMENT OF REVENUE TALLAHASSEE, FLORIDA

STATE OF FLORIDA DEPARTMENT OF REVENUE TALLAHASSEE, FLORIDA HAROLD PRATT PAVING & SEALING, INC., Petitioner, vs. DEPARTMENT OF REVENUE, Respondent. DOR 05-2-FOF Case No. 04-1054 FINAL ORDER This cause having come on before the State of Florida, Department of Revenue (hereinafter, "the Department"), for the purpose of issuing a final order. The hearing officer assigned by the Division of Administrative Hearings heard this cause and issued a Recommended Order on August 30, 2004. The Department filed a Remand for Supplemental Findings of Fact on September 30, 2004 and on December 8, 2004 the hearing officer issued a Recommended Order Following Remand. A copy of the August 30, 2004 Recommended Order along with a copy of the December 8, 2004 Recommended Order Following Remand are attached hereto and incorporated herein by reference. The Recommended Order Following Remand, along with the original Recommended Order, provided in part that the parties have the right to submit written exceptions within 15 days from the date of the order. No exceptions have been received by the Department. The Department adopts the facts and the conclusions of law set forth in the Hearing Officer's Recommended Order as amended by the Recommended Order Following Remand. Accordingly, it is ORDERED: That the Recommended Order as amended by the Recommended Order Following Remand are hereby approved and accepted. The Department may therefore levy upon the funds in the Petitioner's Colonial Bank account up to the sum of forty six thousand one hundred and thirty three dollars and ninety four cents, ($46,133.94), which is the amount of the indebtedness that was stated in the Department's Notice of Freeze dated February 5, 2004. ENTERED in Tallahassee, Leon County, Florida, this day of January, 2005. State of Florida DEPARTMENT OF REVENUE Jim Zingale

Executive Director CERTIFICATE OF SERVICE I HEREBY CERTIFY that the foregoing Final Order has been filed in the official records of the Florida Department of Revenue and that a true and correct copy of the Final Order has been furnished by regular U.S. Mail addressed to: Harold Pratt, President, Harold Pratt Paving & Sealing, Inc., at 2242 Bruner Lane, Southeast, Fort Myers, Florida 33912 this 28th day of January, 2005. Judy Langston Agency Clerk NOTICE OF RIGHT TO JUDICIAL REVIEW A party who is adversely affected by this final order is entitled to judicial review pursuant to section 120.68, Florida Statues. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings are commenced by filing one copy of a notice of appeal with the Agency Clerk of the Division of Administrative Hearings and a second copy accompanied by filing fees proscribed by law, with the District Court of Appeal, First District or with the District Court of Appeal in the appellate District where the party resides. The Notice of appeal must be filed within 30 days of rendition of the order to be reviewed. ***************************************** STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS HAROLD PRATT PAVING & SEALING, INC., Petitioner, vs. DEPARTMENT OF REVENUE, Case No. 04-1054 Respondent. RECOMMENDED ORDER FOLLOWING REMAND Pursuant to the Remand for Supplemental Findings of Fact filed on September 30, 2004, this matter was submitted to the Division of Administrative Hearings and its duly-designated Administrative Law Judge, Carolyn S. Holifield, on the record.

STATEMENT OF THE ISSUE The issue for determination is whether Respondent is authorized to levy Petitioner's bank account and apply funds to reduce or satisfy Petitioner's unpaid taxes, interest, and penalties. Preliminary Statement This matter began in February 2004 when Petitioner, Harold Pratt Paving & Sealing, Inc. (Petitioner), protested action of Respondent, Department of Revenue (Department), to garnish Petitioner's bank account due to nonpayment of $46,133.94 in taxes, penalties, and interest. Petitioner did not contest the amount owed, but challenged the Department's action solely on the ground that the Department had agreed to accept the monthly payments in lieu of executing on this debt. In the Recommended Order issued August 8, 2004, the undersigned found that there was no agreement and that the Department could levy $20,625.75, the amount that the bank verified was in Petitioner's bank account as of February 10, 2004. The Department filed a Remand for Supplemental Findings of Fact on September 30, 2004, for the limited purpose of making findings from the record of the underlying proceeding regarding additional funds that were deposited in Petitioner's bank account soon after the Notice of Freeze was issued and that have also been frozen by the bank. See s. 213.67(2), Fla. Stat. (2003). This finding is necessary because the Department seeks to levy on the amount in Petitioner's bank account that will satisfy his outstanding taxes, penalties, and interest, which total $46,133.94. On October 5, 2004, the Department filed the Transcript of the final hearing with the Division of Administrative Hearings and the exhibits received in evidence at the proceeding. Upon consideration of the foregoing, the following Findings of Fact and Conclusions of Law are made, which amend paragraphs 19, 36 and 38 of the Recommended Order issued August 30, 2004. FINDINGS OF FACT Based on the entire record in this case, the Transcript of the proceeding, and the documentary evidence received at hearing, the following finding and conclusions are made. 1. On February 10, 2004, the Colonial Bank verified that it held one account identified as belonging to Petitioner, which had a current balance of $20,625.75. However, on or about February 11, 2004, Petitioner's secretarybookkeeper deposited approximately $44,000.00 into Petitioner's bank account. With this additional deposit, Petitioner's bank account had enough funds to satisfy the total amount due for its delinquent unemployment taxes, associated interest, and penalties. (Amendment to paragraph 19 of the Recommended Order issued on August 30, 2004.) CONCLUSIONS OF LAW 2. The evidence established that the Department gave the statutorily-mandated notice to the financial institution, Colonial Bank, which had personal property owned by Petitioner in its possession and under its control. (Amendment

to paragraph 36 of the Recommended Order issued on August 30, 2004.) 3. The Department has met its burden of proof in this proceeding; and, thus, is authorized to levy on Petitioner's bank account in the amount necessary to satisfy its delinquent unemployment taxes, interest, and penalties. (Amendment to paragraph 38 of the Recommended Order issued on August 30, 2004.) RECOMMENDATION Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Revenue enter a final order that levies funds in Petitioner's bank account at Colonial Bank and applies such funds to satisfy Petitioner's delinquent taxes, interest, and penalties. DONE AND ENTERED this 8th day of December, 2004, in Tallahassee, Leon County, Florida. CAROLYN S. HOLIFIELD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 - SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 8th day of December, 2004. COPIES FURNISHED: Harold Pratt, President Harold Pratt Paving & Sealing, Inc. 2242 Bruner Lane, Southeast Fort Myers, Florida 33912 James O. Jett, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 Bruce Hoffman, General Counsel Department of Revenue

204 Carlton Building Tallahassee, Florida 32399-0100 James Zingale, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100 NOTICE OF RIGHT TO SUBMIT EXCEPTIONS All parties have the right to submit written exceptions within 15 days from the date of this Recommended Order Following Remand. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case. ************************************ STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS HAROLD PRATT PAVING & SEALING, INC., Petitioner vs. DEPARTMENT OF REVENUE, Case No. 04-1054 Respondent RECOMMENDED ORDER Pursuant to notice, a final hearing was held in this case on June 3, 2004, in Ft. Myers, Florida, before Carolyn S. Holifield, a duly-designated Administrative Law Judge of the Division of Administrative Hearings. APPEARANCES For Petitioner: Harold Pratt, President Harold Pratt Paving & Sealing, Inc. 2242 Bruner Lane, Southeast Ft. Myers, Florida 33912

For Respondent: James O. Jett, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 STATEMENT OF THE ISSUE The issue for determination is whether Respondent is authorized to levy Petitioner's bank account and apply the funds to reduce or satisfy Petitioner's unpaid unemployment taxes, interest, and penalties. PRELIMINARY STATEMENT By letter dated February 24, 2004, Petitioner requested a formal hearing regarding the Notice of Intent to Levy funds in his bank account. In the letter, Petitioner offered to make a $5,000 down payment on the outstanding balance and pay $5,000 monthly, in certified funds, until the outstanding unemployment taxes, interest, and penalties are paid. In a written response to Petitioner's letter, Respondent, the Department of Revenue (Department), advised Petitioner that his request for hearing did not comply with applicable rules, but that he would be allowed to amend the request. The Department's response also stated: "Your February 24, 2004, correspondence which indicated your willingness to enter into a repayment agreement failed to state any rule or statute that would require the Department to accept your repayment arrangements... [T]he Department does not believe that it is legally required to accept a repayment for unemployment tax..." On or about March 18, 2004, Petitioner amended his letter requesting a hearing. In that letter, Petitioner requested that the Department accept the repayment plan he had offered in his February 24, 2004, letter. Finally, Petitioner alleged that he had made a verbal repayment agreement on February 6, 2004, with a Department auditor in order to avoid any type of legal action. On or about March 23, 2004, the Department referred the matter to the Division of Administrative Hearings to conduct the administrative hearing. At hearing, Petitioner presented the testimony of one witness, Kathy Jaffray, secretary-bookkeeper for Pratt Paving and Sealing, Inc., and offered no exhibits into evidence. The Department presented the testimony of one witness, Angelina Philander, a tax auditor for the Department. Respondent's Composite Exhibit 1 was admitted into evidence. On June 7, 2004, after the hearing had concluded, the Department filed a Motion to Re-Open Evidence for the Purpose of Submitting the Joint Stipulation of Facts (Motion). Both parties executed the undated joint stipulation, but it was not filed at the hearing. Petitioner filed no response to the Motion, and by Order issued June 25, 2004, the Department's Motion was granted. A Transcript of the hearing was filed on July 1, 2004. The Department filed a Proposed Recommended Order on

July 8, 2004. Petitioner did not file a proposed recommended order. FINDINGS OF FACT 1. Petitioner, Harold Pratt Paving and Sealing, Inc., is a Florida corporation with its home office and principal place of business at 2242 Bruner Lane, Southeast, Ft. Myers, Florida 33192. Harold W. Pratt is the president and director of the company. 2. Petitioner is an employer within the meaning of Chapter 443, Florida Statutes (2003), and is subject to the provisions of that chapter. As an employer, Petitioner employs and pays wages to his employees. 3. In accordance with Subsection 443.131(1), Florida Statutes (2003), Petitioner is required to pay a payroll tax to the Unemployment Compensation Trust Fund, which is required to finance unemployment benefits. 4. Petitioner's State of Florida unemployment tax account number is 2032262. 5. Contributions, also referred to as unemployment taxes, are self-reported by employers. The contributions accrue and are payable by employers for each calendar quarter the employer is subject to Chapter 443, Florida Statutes (2003), for wages paid during each calendar quarter for employment. The contributions are due and payable by the employer to the tax collection service provider the last day of the month following the calendar quarter for which they are payable. The payments become delinquent on the first working day of the following month. See s. 443.131(1), Fla. Stat. (2003), and Fla. Admin. Code R. 60BB-2.027. 6. As of the date of the hearing, Petitioner owes unemployment taxes and associated interest and penalties in the amount of $46,133.94. 7. The Department of Revenue is authorized to administer the tax laws of the State of Florida pursuant to Section 213.05, Florida Statutes (2003). 8. The Department of Revenue serves as the tax collection service provider pursuant to Section 443.1316, Florida Statutes (2003), and is responsible for the collection of unemployment taxes. 9. Typically, when an employer does not timely submit its unemployment tax payment and report, the Department sends the employer a delinquency notice. The employer then has 15 to 20 days to respond. If payment is not received, the Department then takes more serious action. 10. On November 19, 2003, the Department issued a Subpoena Duces Tecum to Mr. Pratt to produce specified employment records at the Department's Ft. Myers office on December 15, 2003. Mr. Pratt and Ms. Jaffray, Petitioner's secretary and bookkeeper, produced the records as required by the subpoena. 11. On December 15, 2003, when Mr. Pratt and Ms. Jaffray were at the Department's office, they talked to Ms. Philander, the Department auditor assigned to Petitioner's case, about entering into a time payment agreement with the Department. The time payment agreement is available to employers who owe delinquent unemployment taxes

and allows them to make payments over time. This option is permitted at the discretion of the Department auditor assigned to the employer. 12. In December 2003, Mr. Pratt and/or Ms. Jaffray, and Ms. Philander discussed the time payment agreement option, but did not execute any agreement. Because Mr. Pratt had not yet submitted Petitioner's current wage report to Tallahassee, but would be submitting it soon, Ms. Philander wanted to wait until the total amount of Petitioner's outstanding unemployment taxes was calculated. Once that amount was determined, the parties planned to enter into a time payment agreement. Ms. Philander advised Mr. Pratt and Ms. Jaffray that she would contact them once the adjustment had been made. 13. Some time after December 15, 2003, and mid-january 2004, Ms. Philander received Petitioner's unemployment tax account statement. She then called Ms. Jaffray and notified her that Petitioner's account statement had come in and that she and Mr. Pratt would be receiving a copy of the statement. Ms. Philander also told Ms. Jaffray that Mr. Pratt should come up with figures that would be appropriate for the terms of repayment. 14. In a January 16, 2004, telephone conversation, Ms. Jaffray told Ms. Philander that she would call her the following week to tell her the amount of money that Petitioner would pay under a time payment agreement. Ms. Jaffray explained that she could not provide this information until Mr. Pratt told her the amount he could pay. The following week, Ms. Philander never received a call from either Mr. Pratt or Ms. Jaffray. 15. At one point, Ms. Jaffray told Ms. Philander that Petitioner could pay $5,000 down, in certified funds, and $5,000, in certified funds, per month thereafter. However, Ms. Jaffray told Ms. Philander that she would have to check with Mr. Pratt before this payment plan could be finalized. 16. After she did not hear from Mr. Pratt or Ms. Jaffray, on February 1, 2004, Ms. Philander called Petitioner's office and left a message on Petitioner's answering machine or voice mail. On February 4, 2004, Ms. Philander left another message for Mr. Pratt that she needed the money or she would start "injunction." 17. Mr. Pratt never offered any proposed payment amounts to Ms. Philander and never signed a time payment agreement. 18. On or about February 5, 2004, the Department sent a Notice to Freeze to the Colonial Bank in Birmingham, Alabama. In the notice, which was sent by certified mail, the Department advised Colonial Bank that Petitioner "has a delinquent liability for tax, penalty, and interest of $46,133.94, which is due to the State of Florida." Moreover, the Department directed the bank not to transfer, dispose, or return any credits, debts, or other personal property owned by or owed to Petitioner. 19. On February 10, 2004, the Colonial Bank verified that it held one account identified as belonging to Petitioner, which had a current balance of $20,625.75. 20. On February 11, 2004, the Department issued a Notice of Intent to Levy on personal property belonging to Petitioner in the possession or control of the Colonial Bank. The Notice of Levy stated that "the action is taken for

nonpayment of taxes, penalty, and interest in the sum of $46,133.94, and will proceed unless you pay this delinquent amount within 21 days from the date of receipt of this Notice of Intent to Levy." The notice also advised Petitioner of his right to a hearing. 21. The Department mailed the Notice of Intent to Levy to Petitioner by certified mail, which was received by Petitioner on February 12, 2004. CONCLUSIONS OF LAW 22. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. ss. 120.569 and 120.57(1), Fla. Stat. (2003). 23. Subsection 443.1316(1), Florida Statutes (2003), authorizes the Agency for Workforce Enforcement to contract with the Department to perform the duties of the tax collection service provider and provide other unemployment tax collection services under Chapter 443, Florida Statutes (2003), the Unemployment Compensation Law. When the Department implements Chapter 443, Florida Statutes (2003), it is considered to be administering a revenue law of this state. s. 443.1316(2)(a), Fla. Stat. (2003). 24. Petitioner is an employer and an employing unit within the meaning of Chapter 443, Florida Statutes (2003), and is subject to the applicable provisions therein. s. 443.036(19) and (20), Fla. Stat. (2003). 25. Employers within the purview of Chapter 443, Florida Statutes (2003), are required to contribute to the Unemployment Compensation Trust Fund. This "contribution" is defined as "a payment of payroll tax" to the Unemployment Compensation Trust Fund, which is required to finance unemployment benefits. s. 443.036(14), Fla. Stat. (2003). 26. The payment of contributions by employers is governed by Subsection 443.131(1), Florida Statutes (2003), which provides, in pertinent part, the following: PAYMENT OF CONTRIBUTIONS.--Contributions accrue and are payable by each employer for each calendar quarter he or she is subject to this chapter for wages paid during each calendar quarter for employment. Contributions are due and payable by each employer to the tax collection service provider, in accordance with the rules adopted by the Agency for Workforce Innovation or the state agency providing tax collection services... 27. Pursuant to its rulemaking authority, the Agency of Workforce Innovation adopted Florida Administrative Code Rule 60BB-2.027, which implements Section 493.131, Florida Statutes (2003). s. 443.1317(1)(b), Fla. Stat. (2003). That rule, which addresses the payment of contributions, including the dates such contributions are due and payable, provides in relevant part the following: Payment of Contributions. (1) Payment to be Submitted with Quarterly Reports. Payment of contributions shall be submitted concurrently with contribution reports except for payment by electronic means... Contributions shall be payable for each calendar

quarter with respect to wages paid during such calendar quarter except as otherwise provided in this rule and Section 443.131(4), F.S. (2) Due and Payable Dates. (a) Contributions are due and payable no later than the last day of the month following the calendar quarter for which they are payable and become delinquent on the first working day of the following month except for payments submitted by electronic means... 28. Petitioner does not dispute and stipulated that he owes $46,133.94 in delinquent payroll taxes, interest, and penalties. 29. Petitioner contends that he had a verbal agreement with the Department pursuant to a discussion with the auditor assigned to his case. The evidence clearly established that such discussions occurred, but that a time payment agreement was never executed between the parties because they never came to an agreement as to the terms of repayment. The evidence showed that Petitioner never provided the Department with a firm offer as to a repayment schedule, even after the Department repeatedly requested this information. 30. Absent an executed agreement with terms of repayment, there is no time payment agreement to allow Petitioner to make payments over time. Any decision to enter into a time payment agreement in the future is within the discretion of the Department. 31. The evidence showed that after attempts by the parties to work out a repayment plan were unsuccessful, the Department took statutorily authorized action to collect the delinquent taxes, interest, and penalties. 32. The burden of proof, absent a statutory directive to the contrary, is on the party asserting the affirmative of the issue in the proceeding. Department of Transportation v. J.W.C. Company, Inc., 396 So.2d 778 (Fla. 1st DCA 1981); Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349 (Fla. 1st DCA 1977). In this proceeding, the Department seeks to levy the delinquent taxes, interests, and penalties from Petitioner's bank account. Therefore, to prevail in this proceeding, the Department must establish by a preponderance of evidence the alleged facts necessary to show that the proposed levy is authorized. 33. Section 213.67, Florida Statutes (2003), authorizes the Department to levy upon the property of a person delinquent in the payment of any taxes, penalties, and interest owed to the Department. That section provides in pertinent part the following: Garnishment.- (1) If a person is delinquent in the payment of any taxes, penalties, and interest owed to the department, the executive director or his or her designee may give notice of the amount of such delinquency by registered mail to all persons having in their possession or under their control any credits or personal property, exclusive of wages, belonging to the delinquent taxpayer, or owing any debts to such delinquent taxpayer at the time of receipt by them of such notice.

34. Pursuant to Section 213.67, Florida Statutes (2003), once the Department determines that the person owes delinquent taxes, interest, and penalties that are subject to enforcement by the Department and all applicable notice requirements have been met, the Department is authorized to issue a Notice of Freeze to the persons having in their possession or under their control any credits or personal property belonging to the delinquent taxpayer. 35. Prior to levying against the assets of the noncompliant or delinquent taxpayer, for which a Notice of Freeze has been issued, the Department is required to send the taxpayer, by certified or registered mail or hand-delivery, a Notice of Intent to Levy. The Notice must inform the noncompliant taxpayer that the Department intends to levy on the frozen assets held by custodians, as specified in the Notice of Freeze. See Fla. Admin. R. 12-21.204. 36. The evidence established that the Department gave the statutorily mandated notice to the financial institution, Colonial Bank, which had personal property owned by Petitioner in its possession and under its control. Additionally, the undisputed evidence showed that at the time the Colonial Bank received the Notice of Freeze, it had in its possession and under its control personal property owned or controlled by Petitioner, specifically $20,625.75 in a checking account. 37. Finally, the evidence established that the Department issued to Petitioner a Notice of Intent to Levy which (1) notified Petitioner that the Department intended to levy upon his personal property and liquid assets in the control of the Colonial Bank; (2) stated that the action was being taken for Petitioner's nonpayment of unemployment taxes; and (3) advised Petitioner of his due process rights. The notice provided to Petitioner by the Department fully complied with the requirements of Florida Administrative Code Rule 12-21.204. 38. The Department has met its burden of proof in this proceeding; and, thus, is authorized to levy on Petitioner's bank account totaling $20,625.75 and to apply those funds to his delinquent unemployment taxes, interest, and penalties. RECOMMENDATION Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Revenue enter a final order that: (1) levies $20,625.75 in Petitioner's bank account at the Colonial Bank; (2) applies the funds to reduce Petitioner's delinquent taxes, interest, and penalties; and (3) credits Petitioner for said payment. DONE AND ENTERED this 30th day of August, 2004, in Tallahassee, Leon County, Florida. CAROLYN S. HOLIFIELD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060

(850) 488-9675 - SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of August, 2004. COPIES FURNISHED: Harold Pratt, President Harold Pratt Paving & Sealing, Inc. 2242 Bruner Lane, Southeast Fort Myers, Florida 33912 James O. Jett, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 Bruce Hoffmann, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 James Zingale, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100 NOTICE OF RIGHT TO SUBMIT EXCEPTIONS 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.