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Enscor, LLC v. Morgan

Court of Appeals of Mississippi

May 15, 2018

ENSCOR, LLC, JEFFREY C. SMITH AND CYNTHIA H. SMITH, INDIVIDUALLY APPELLANTS
v.
ED MORGAN, IN HIS OFFICIAL CAPACITY AS THE COMMISSIONER OF REVENUE OF THE MISSISSIPPI DEPARTMENT OF REVENUE APPELLEE

          DATE OF JUDGMENT: 11/17/2016

          HINDS COUNTY CHANCERY COURT, FIRST JUDICIAL DISTRICT, HON. WILLIAM H. SINGLETARY TRIAL JUDGE.

          ATTORNEYS FOR APPELLANTS: JAMES GARY MCGEE JR. WILLIAM HARRISON WEBB

          ATTORNEYS FOR APPELLEE: JOHN STEWART STRINGER LARA E. GILL

          BEFORE IRVING, P.J., BARNES AND WILSON, JJ.

          BARNES, J.

         ¶1. Enscor LLC (Enscor), a Tennessee-based general construction company licensed in Mississippi, was audited by the Mississippi Department of Revenue (DOR) for the tax period beginning April 1, 2011, and ending April 30, 2014. A notice of the audit was sent to Enscor via certified mail. Following the audit, the DOR issued Enscor a withholding tax assessment of $51, 099.

         ¶2. On October 23, 2014, Enscor, through its attorney and authorized representative, James McGee Jr., appealed the assessment to the DOR's Board of Review pursuant to Mississippi Code Annotated section 27-77-5(1) (Rev. 2010), which provides in part:

Any taxpayer aggrieved by an assessment of tax by the agency . . . and who wishes to contest the action of the agency shall, within sixty (60) days from the date of the action, file an appeal in writing with the [B]oard of [R]eview requesting a hearing and correction of the contested action specifying in detail the relief requested and any other information that might be required by regulation.

McGee instructed the DOR to forward all further communications to his law office in Jackson, Mississippi. The Board of Review scheduled a hearing on the appeal for March 19, 2015, and mailed a letter to McGee's office on November 12, 2014, as notification of the hearing. The letter stated that the failure to appear at the hearing would constitute a withdrawal of the appeal and, once withdrawn, the assessment could not be appealed.[1] On March 11, 2015, the DOR sent an email to Sandra Crosby, an employee with McGee's firm, as a courtesy reminder of the hearing. However, no Enscor representative attended the hearing; so the Board of Review involuntarily withdrew Enscor's appeal, making the assessment subject to collection by the DOR.

         ¶3. Upon learning of the involuntary withdrawal of its appeal, Enscor insisted it did not receive notification of the hearing date and filed a timely petition contesting the withdrawal with the Mississippi Board of Tax Appeals (BTA). The BTA scheduled a hearing on February 17, 2016, specifically to address the issue of the withdrawal of Enscor's appeal. At the hearing, the DOR argued that once the appeal had been involuntarily withdrawn, the matter was final and "no longer subject to review by the Review Board, [BTA], or any court, " citing section 27-77-5(8) (Rev. 2010), which read:

Once an appeal is withdrawn, whether voluntary or involuntary, the action from which the appeal was taken, whether a tax assessment, a denial of [a] refund claim, a denial of [a] waiver of tax penalty, or an order of the [B]oard of [R]eview, shall become final and not subject to further review by the [B]oard of [R]eview, the [BTA] or a court. The agency shall then proceed in accordance with law based on such final action.

(Emphasis added). The DOR further asserted that Enscor had failed to rebut the presumption that notice of the hearing "was properly delivered and received." Enscor was represented at the hearing by another attorney with McGee's law firm. Requesting that the BTA grant Enscor's request to reconsider the audit results, Enscor's counsel explained:

In summary, we do not contest the factual and legal conclusions reached by the [DOR] on [its] motion to dismiss. It seems pretty straightforward in this case that generally not appearing before the Board of Review would result in an involuntary withdrawal of the appeal.
As I'm sure [you] are all aware, we represent hundreds of clients before the [DOR] in disputes all the time. It was never our intention to withdraw the appeal or to somehow negligently fail to appear.
That being said, we would like to submit to the Board that it was an unfortunate sequence of events that occurred in our offices which led us to not put the Board of Review date on our calendar.

         ¶4. On March 2, 2016, the BTA affirmed the Board of Review's decision to involuntarily withdraw Enscor's administrative appeal, concluding:

IT IS, THEREFORE, HEREBY ORDERED AND ADJUDGED by the [BTA] that the [DOR's m]otion to [d]ismiss is sustained and the taxpayers' appeal is DISMISSED with prejudice and that the tax assessment from which the appeal was taken has become final and is not subject to further review by the Board of Review, the [BTA] or a court and ...

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