Beltram v. South Carolina Department of Revenue

Decision Date23 October 2019
Docket Number2019-UP-349
PartiesRichard Beltram, Appellant/Respondent, v. South Carolina Department of Revenue, Respondent/Appellant. Appellate Case No. 2017-000968
CourtSouth Carolina Court of Appeals


Heard June 5, 2019

Appeal From The Administrative Law Court S. Phillip Lenski Administrative Law Judge

Ginger D. Goforth, of Ward Law Firm, of Spartanburg, for Appellant/Respondent.

Nicole Martin Wooten and Jason Phillip Luther, both of the S.C Department of Revenue; and William J. Condon, Jr., of the Office of the State Treasurer, all of Columbia, for Respondent/Appellant.


This appeal arises from the South Carolina Department of Revenue's (the Department's) attempts over many years to collect withholding taxes, penalties, and interest owed by Intedge Industries (Intedge) from Richard Beltram Intedge's former president. Beltram appeals the Administrative Law Court's (ALC's) final amended order, arguing the ALC (1) erred in calculating the outstanding tax liabilities of Intedge on the withholding tax quarters instead of the tax lien filing dates; (2) violated his due process rights by awarding interest that accrued due to delay caused by the Department and failing to dismiss the case due to what he contends was lack of timely notice of the tax liens; and (3) abused its discretion by awarding him only $675 in attorney's fees as a sanction for the Department's discovery violations. The Department also appeals the ALC's final amended order, arguing (1) this court should dismiss Beltram's appeal because he failed to pay the taxes due or post a bond before appealing as required by section 12-60-3370 of the South Carolina Code (2014); (2) the ALC erred in barring the Department from collecting taxes from Beltram that were secured by tax liens against Intedge filed more than ten years before the Department issued its determination; and (3) the ALC abused its discretion by imposing the $675 sanction. We affirm as modified.


In 1988, Intedge, a New Jersey corporation, moved its operations to Woodruff, South Carolina. Beltram was the president of Intedge from 1983 until July 1, 2005. While Beltram was president, it is undisputed he had the authority to sign checks on behalf of Intedge, the power to hire and fire employees, the ability to sign contracts for Intedge, access to corporate records, majority control over Intedge, and the authority to resolve any outstanding tax liability.

Intedge submitted quarterly South Carolina withholding tax returns for the quarters ending in September 1999 through December 2005 except for the quarter ending September 2005. Although the returns showed the withholding tax due had been paid to the Department, Intedge failed to pay all of the withholding taxes it reported. Consequently, the Department issued proposed notices of assessment to Intedge. The Department then issued final assessments against Intedge and filed tax liens against Intedge for each quarter. The Department filed the notices of assessment within the thirty-six-month statute of limitations found in section 12-54-85(A) of the South Carolina Code (2014).[1] Although, as we have noted, the Department issued assessments and filed liens against Intedge for withholding periods dating back to 1999, the dates of the notices, assessments, and tax liens relevant to this appeal are as follows:

Withholding Period Ending

Date of Proposed Notice of Assessment (PNOA) to Intedge

Date of Final Assessment

Lien Date

September 2003




December 2003




March 2004




June 2004




September 2004




December 2004




March 2005




June 2005




On July 1, 2005, Beltram sold Intedge's assets to Intedge Manufacturing, Inc., a company owned by his uncle. Intedge officially closed on October 1, 2005. The Secretary of State administratively dissolved Intedge on January 16, 2009.

On September 2, 2009, the Department issued a responsible party Proposed Notice of Assessment to Beltram, informing him he was being held personally responsible for Intedge's sales and withholding taxes, interest, and penalties for the period from September 1999 to December 2005 based on his position as Intedge's president and majority shareholder. On December 1, 2009, Beltram filed a timely protest contesting his personal liability for Intedge's sales and withholding taxes, interest, and penalties. The Department did not issue its determination until May 1, 2013- over three years after Beltram filed his protest-in violation of section 12-60-450(E)(3) of the South Carolina Code (2014).[2] In its determination, the Department concluded Beltram was personally responsible for Intedge's delinquent withholding tax, sales tax, penalties, and interest for the period of September 1999 through December 2005. The Department also found Beltram's liability for Intedge's outstanding tax liabilities was not extinguished by the expiration of the ten-year tax lien period because the liens were filed against Intedge, not Beltram. On May 27, 2013, Beltram filed a Request for a Contested Case hearing.

The ALC held the contested case hearing in September 2014. At the hearing, Bruce Owens, a Department Collections Supervisor, testified he received Beltram's protest. Owens stated Beltram, as the responsible party, is deemed to have notice of the assessment of his business.

In its amended final order dated March 17, 2017, the ALC ruled (1) Beltram was a withholding agent of Intedge from September 1999 to July 2005, and as such, he was liable for Intedge's outstanding withholding taxes, interest, and penalties; (2) notice to Intedge constituted notice to Beltram, and the Department timely issued notices of the assessments to Intedge within the applicable three-year statute of limitations; (3) the withholding tax liens became effective against Intedge when they were filed in Spartanburg County, the liens filed ten or more years before the Department issued its determination on May 1, 2013, had expired, and the taxes underlying these liens (i.e., the liens relating to withholding periods from 1999 to May 1, 2003) could no longer be collected from Intedge or Beltram; (4) Beltram was not personally liable for any tax liability accrued after July 2005, when he lost control of Intedge by selling the company to his uncle; (5) Beltram's due process rights were not violated by the Department's delay in bringing this case; (6) as a remedy for the Department's delay in reaching a determination, Beltram was not responsible for penalties that accrued from Intedge's outstanding tax liabilities; (7) Beltram was responsible for the full amount of interest owed on Intedge's outstanding tax liabilities; (8) no authority authorized the ALC to award Beltram attorney's fees; and (9) Beltram was entitled to a $675 deduction of the amount owed to the Department as a sanction for the Department's failure to provide requested discovery.

Both Beltram and the Department appealed the ALC's amended final order. The Department then moved to dismiss Beltram's appeal based on Beltram's failure to comply with section 12-60-3370. On July 13, 2017, this court denied the motion to dismiss and remanded the case to the ALC to determine "the amount of taxes Beltram must pay or the amount of the bond Beltram must post pursuant to section 12-60-3370." The order also stated neither party was barred from raising a jurisdictional issue in their arguments on appeal. The ALC order on remand found Beltram was required to pay $54, 510.50. Beltram thereafter deposited the amount with the Department.


The Administrative Procedures Act (APA) governs appellate review of decisions from the ALC. Risher v. S.C. Dep't of Health & Envtl. Control, 393 S.C. 198, 203, 712 S.E.2d 428, 431 (2011).

The review of the [ALC]'s order must be confined to the record. The court may not substitute its judgment for the judgment of the [ALC] as to the weight of the evidence on questions of fact. The court of appeals may affirm the decision or remand the case for further proceedings; or[ ] it may reverse or modify the decision if the substantive rights of the petitioner have been prejudiced because the finding, conclusion, or decision is:
(a)in violation of constitutional or statutory provisions;
(b)in excess of the statutory authority of the agency;
(c)made upon unlawful procedure;
(d)affected by other error of law;
(e)clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or
(f) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

S.C. Code Ann. § 1-23-610(B) (Supp. 2018).

An appellate court should only reverse the ALC's order if it is unsupported by substantial evidence in the record or contains an error of law. Original Blue Ribbon Taxi Corp v. S.C. Dep't of Motor Vehicles, 380 S.C. 600, 604, 670 S.E.2d 674, 676 (Ct. App. 2008); see also Media Gen. Commc'ns, Inc. v. S.C. Dep't of Revenue, 388 S.C. 138, 144, 694 S.E.2d 525, 528 (2010) ("A reviewing court may reverse the decision of the ALC [when] it is in violation of a statutory provision or it is affected by an error of law."). "Substantial evidence is not a mere scintilla of evidence nor evidence viewed blindly from one side, but is evidence [that], when considering the record as a whole, would allow reasonable minds to reach the conclusion that the agency reached . ....

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