AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• Taxpayers Elauterio Vigil and Gabriel Vigil were assessed taxes for tax years 2008, 2009, 2010, and 2011 related to their operation of Prestige Towing & Recovery, Inc. (Prestige). The Department of Taxation and Revenue issued assessments based on the finding that the Taxpayers filed fraudulent returns and operated Prestige after its corporate status was cancelled. Prestige sporadically reported gross receipts taxes and, after its assets were sold to Platinum Performance, LLC (Platinum), the Department assessed Platinum as a successor in business to Prestige. Subsequently, the Department issued personal assessments against Elauterio and Gabriel (paras 1-7).

Procedural History

• Administrative Hearings Office: The Hearing Officer determined that the ten-year statute of limitations applied based on fraudulent returns filed by Taxpayers and concluded that the Department could personally assess taxes against the Taxpayers for their operation of Prestige, despite a previous proceeding against Platinum (para 1).

Parties' Submissions

• Taxpayers: Argued that a seven-year limitation period should apply, barring the Department from assessing gross receipts tax liability for 2008, 2009, and 2010. Contended that estoppel principles preclude the Department from assessing Prestige’s liability against them for 2011 and argued that Elauterio cannot be jointly and severally liable for the assessed taxes as he did not participate in the operations and management of Prestige (paras 2, 10, 16).
• Department: Argued that Taxpayers were personally liable because they continued to operate as a corporation after its cancellation and that the ten-year statute of limitations applied due to the filing of false or fraudulent returns with intent to evade tax (paras 7, 12).

Legal Issues

• Whether the ten-year statute of limitations, rather than a seven-year statute, applies to the failure to file gross receipts tax returns for 2008, 2009, and 2010.
• Whether estoppel principles preclude the Department from assessing Prestige’s liability against Elauterio and Gabriel for 2011.
• Whether Elauterio can be jointly and severally liable for the assessed taxes based on his involvement with Prestige (paras 10, 16, 32).

Disposition

• The Court held that the seven-year limitation period applies, barring the Department from assessing gross receipts tax liability against Elauterio and Gabriel personally for 2008, 2009, and 2010.
• The Court found that estoppel principles do not preclude the Department from assessing Prestige’s liability against Elauterio and Gabriel for 2011.
• The Court affirmed the Hearing Officer's assessment of liability against Elauterio for his actions related to Prestige (paras 14, 17, 32).

Reasons

• Per WRAY, J. (ATTREP, J., and MEDINA, J., concurring): The Court reversed the Hearing Officer's application of the ten-year statute of limitations for 2008, 2009, and 2010, finding insufficient evidence of false or fraudulent returns for those years. The Court also rejected the Taxpayers' estoppel arguments, determining that the Department's assessments for 2011 were not barred by any form of estoppel. Finally, the Court found substantial evidence supporting the Hearing Officer’s conclusion that Elauterio was personally liable for Prestige’s 2011 gross receipts tax liability, based on his significant involvement and financial support for Prestige (paras 13-14, 17-31, 32-36).