Crum v. Missouri Director of Revenue
| Decision Date | 29 August 2006 |
| Docket Number | No. 05-4203-CV-C-NKL.,05-4203-CV-C-NKL. |
| Parties | Jerry D. CRUM, M.D. and Douglas C. Richards, D.O., Plaintiffs, v. MISSOURI DIRECTOR OF REVENUE and Missouri State Board of Registration for the Healing Arts, Defendants. |
| Court | U.S. District Court — Western District of Missouri |
Diana Christine Carter, Johnny K. Richardson, Brydon Swearengen & England PC, Jefferson City, MO, for plaintiffs.
Mark E. Long, William S. Vanderpool, Missouri Attorney General's Office, Jefferson City, MO, Victorine R. Mahon, Missouri Division of Workers' Compensation, Springfield, MO, for defendants.
The parties have filed cross motions for summary judgment. Plaintiffs' Motion is Doc. # 36, the Missouri Director of Revenue's ("DOR") Motion is Doc. # 32, and the Missouri State Board of Registration for the Healing Arts's ("the Board") Motion is Doc. # 33. For the reasons set forth below, the Court grants the Motions of DOR and the Board and denies Plaintiffs' Motion.
Missouri law authorizes the revocation of the license of any physician who fails to comply with certain Missouri tax laws. Mo.Rev.Stat. § 324.010 states:
All governmental entities issuing professional licenses, certificates, registrations, or permits pursuant to [statutory citations]1 shall provide the director of revenue with the name and Social Security number of each applicant for licensure with or licensee of such entities within one month of the date the application is filed or at least one month prior to the anticipated renewal of a licensee's license. If such licensee is delinquent on any state taxes or has failed to file state income tax returns in the last three years, the director shall then send notice to each such entity and licensee. In the case of such delinquency or failure to file, the licensee's license shall be suspended within ninety days after notice of such delinquency or failure to file, unless the director of revenue verifies that such delinquency or failure has been remedied or arrangements have been made to achieve such remedy. The director of revenue shall, within ten business days of notification to the governmental entity issuing the professional license that the delinquency has been remedied or arrangements have been made to remedy such delinquency, send written notification to the licensee that the delinquency has been remedied. Tax liability paid in protest or reasonably founded disputes with such liability shall be considered paid for the purposes of this section.
Mo.Rev.Stat. § 324.010 (). This law went into effect in 2003.
Plaintiffs, Dr. Jerry D. Crum ("Crum") and Dr. Douglas C. Richards ("Richards") were licensed physicians in Missouri at the time Mo.Rev.Stat. § 324.010 was passed. They received notification of the new law when the Board sent them their 2004 license renewal packets which contained a notice that their license would be at risk if they either failed to pay taxes or failed to file tax returns in the last three years. Both Plaintiffs received the packets and submitted their renewal applications without incident in late 2003 and early 2004. See Crum Dep. at p. 35; Richards Dep. at p. 25; Steinman Dep. at p. 42.
On January 21, 2004, DOR mailed a "Request for Tax Return" ("Request") to Crum at his office in Rolla, Missouri. Crum admits that he used his office address for business purposes and that if he failed to receive mail at his office, then that failure was attributable to his staff and not to an incorrect address. See Crum Dep. at pp. 22-23.
DOR's Request stated:
The Department of Revenue's records indicate that you have not Med a 2000 Missouri individual income tax return. If you do not file the return and pay, or make satisfactory arrangements for payment of the balance due within 90 days of the date of this notice, your professional license, certificate registration, or permit will be revoked by operation of law (HB 600, 2003).
See Board Ex. 4 at p. 2. DOR sent identical notices to Crum for the 2001 and 2002 tax years. Id. at pp. 11 (2001 tax year) and 22 (2002 tax year). Each Request ordered Crum to respond by April 20, 2004, and instructed Crum to respond even if he did not believe that he was obligated to file a tax return. The Requests clearly identified what Crum needed to do.
On January 29,, 2004, DOR received a mailing from Dr. Crum's office. It contained DOR's original Request mailed to Dr. Crum on January 21, 2004, and a federal tax form titled "Request for Taxpayer Identification Number and Certification." The tax form was signed by Crum's office administrator. There is no apparent correlation between DOR's January 21, 2004, Request and Crum's January 29, 2004, response. See Board Ex. 4 at p. 1; Crum Dep. at p. 31.
On February 10, 2004, DOR sent a letter to Crum acknowledging receipt of his mailing of. January 29, 2004, and again notifying him that the DOR did not have his tax returns for 2000, 2001 and 2003.
On April 7, 2004, DOR submitted Notices of Deficiency ("Notices") to Crum for the tax periods 2000, 2001, and 2002. See Board Ex. 4 at pp. 3-5 (2000), 12-14 (2001), and 23-25 (2002). According to the Notice, Crum owed a total of $47,679.15 in unpaid taxes for the three year time period, which included penalties and interest.2 The Notices advised Crum that they were his final notice to pay the taxes. They also advised, him that he could object by filing a protest within sixty (60) days. Included with the Notices was a form titled "How to Respond to a Notice of Deficiency" which spelled out Crum's protest and appeal rights as well as his obligation to respond within sixty days.
On June 25, 2004, having heard nothing from Crum, DOR issued a Certificate of Non-Compliance. See PI.Ex. 1. The Certification, which was signed by DOR's Director, stated:
The Department of Revenue hereby certifies that a tax return and/or taxes are due from the above taxpayer. Notice was sent to the taxpayer and 90 days have elapsed. The taxpayer has not remedied the failure to file the tax return and/or pay the tax delinquency, made arrangements to achieve a remedy, paid the tax liability in protest, or asserted a reasonable founded basis for the failure to pay. Pursuant to [section 324.010], the professional license, certificate, registration, or permit of the taxpayer shall be REVOKED.
See PI.Ex. 1. DOR sent the Certification to the Board.
On June 29, 2004,, the Board sent Crum a letter notifying him that his license was going to be revoked on July 21, 2004. See PI.Ex. 2. The Board's notification was sent via certified mail.
Crum contacted DOR on July 21, 2004, and stated that he was working on filing his tax returns for 2000 through 2003, but that he needed an extension of time. See Board Ex. 4 at p. I. DOR explained to Crum that it would not grant him an extension of time.
Crum paid his delinquent taxes for 2000 through 2002 on September 30, 2004, and DOR issued a Certificate of Tax Compliance to Crum. Id. Crum's license was reinstated as of September 30, 2004.
On January 21, 2004, DOR also mailed a Request to Richards asking that he file a tax return for 2001. The Request was sent to P.O. Box K, Lockwood, Missouri 65682-0365. The Request stated,
The Department of Revenue's records indicate that you have not filed a 2001 Missouri individual income tax return. If you do not file, the return and pay, or make satisfactory arrangements for payment of the balance due within 90 days of the date of this notice, your professional license, certificate registration, or permit will be revoked by operation of law (HB 600, 2003).
See Board Ex. 4 at p. 2. DOR sent an identical Request for the 2002 tax period. Id. at pp. 16. Each Request ordered Richards to respond by April 20, 2004 and they instructed him to respond even if he did not believe he was obligated to file a tax return. They were sent via regular mail and were not returned to DOR.
On April 7, 2004, DOR submitted Notices to Richards for the 2001 and 2002 tax periods. See Board Ex. 4 at pp. 3-5 (2001) and 17-19 (2002). The Notices were sent via Certified Mail, but were returned to DOR unclaimed.
All of the correspondence sent by DOR to Richards was sent to Richards's post office box at Lockwood. This was the address that Richards listed on his 2004 medical license renewal application. See Richards Dep. at p. 25. According to Richards's responses to interrogatories, he continues to use the post office box as a current address and he listed that address on the delinquenttax returns he ultimately filed in September 2004. It was also the address he used on his tax returns for the years 1997 to the present. See Board Ex. 7. Richards admits that he retrieves mail from his Lockwood post office box only 6.58% of the calendar days per year — roughly 24 days a year. See Board Ex. 7.
On June 25, 2004, having heard nothing from Richards, DOR issued a Certificate of Non-Compliance. See Pl.Ex. 3. The Certification, which was signed by DOR's Director, stated:
The Department of Revenue hereby certifies that a tax return and/or taxes are due from the above taxpayer. Notice was sent to the taxpayer and 90 days have elapsed. The taxpayer has not remedied the failure to file the tax return and/or pay the tax delinquency, made arrangements to achieve a remedy, paid the tax liability in protest, or asserted a reasonable founded basis for the failure to pay. Pursuant to [section 324.010], the professional license, certificate, registration, or permit of the taxpayer shall be REVOKED.
See Pl.Ex. 1. DOR sent the Certification to the Board.
On June 29, 2004, the Board sent Richards a letter notifying him that his license would be revoked as of July 21, 2004. See Pl.Ex. 5. This notification was sent via certified mail, but was returned unclaimed.
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