State ex rel. Oklahoma Tax Commission v. Daxon
| Decision Date | 26 February 1980 |
| Docket Number | No. 54138,54138 |
| Parties | STATE of Oklahoma ex rel. OKLAHOMA TAX COMMISSION, Petitioner. v. Tom DAXON, State Auditor and Inspector, Respondent. |
| Court | Oklahoma Supreme Court |
Original proceeding for a Writ of Prohibition to prevent State Auditor and Inspector from examining the books and records of the Oklahoma Tax Commission, pursuant to Attorney General's Opinion 79-251. Jurisdiction assumed and writ denied for stated reasons. ORIGINAL JURISDICTION ASSUMED; WRIT DENIED.
Marjorie Patmon, Donna Cox, Oklahoma City, for petitioner.
Don McCombs, Jr., Oklahoma City, for respondent.
On August 24, 1979, the Attorney General of the State of Oklahoma issued Opinion No. 79-251 in response to a query posed him by Tom Daxon, the State Auditor and Inspector. As the Attorney General rephrased the query it is:
Does the State Auditor and Inspector have the authority to examine the records and files deemed by the Oklahoma Tax Commission to be confidential and privileged?
The opinion of the Attorney General begins with 1979 Okl. Session Laws, Ch. 30 § 138, 1 amending 74 O.S.1971 § 212 as it provides in part:
"The State Auditor and Inspector . . . shall examine the books and accounts of the state officers whose duty it is to collect, disburse or manage funds of the State, at least once each year."
Next the opinion notes that 1979 Okl.Sess.Laws, Ch. 30 § 114 2 specifically authorizes the State Auditor and Inspector to audit the accounts of the Oklahoma Tax Commission:
"The State Auditor and Inspector is hereby authorized and directed to make a continuous examination and audit of the books and accounts of the Tax Commission, making separate reports for each fiscal year ending June 30."
The next following section; the 1979 Okl.Sess.Laws, Ch. 30 § 115 3 provides for confidentiality and exceptions thereto of the records and files of the Tax Commission. Material excerpts from that statute are:
(1) The delivery to a taxpayer . . . ;
(2) The publication of statistics . . . ;
(3) The examination of such records and files by the State Auditor and Inspector, or his duly authorized agents;"
The Attorney General's opinion notes that the statute providing for the confidentiality of the Tax Commission's records also expressly provides that the confidentiality so created shall not be construed to prevent examination of these records by the State Auditor and Inspector in addition to the proviso in (a) that these records are confidential In closing, the opinion notes that under (c) of the same section the criminal penalties therein provided for unauthorized disclosure of information obtained from these records apply to all persons securing information from the records and files of the Commission.
except as otherwise provided by law.
Thirteen days after the issuance of this Attorney General's Opinion the State of Oklahoma Ex Rel The Oklahoma Tax Commission filed an Application to Assume Original Jurisdiction, Petition for a Writ of Prohibition, and a Motion to Stay the Effectiveness of Attorney General's Opinion # 79-251. The application and petition allege this Court has superintending control over the Tax Commission and the State Auditor. 4 The application and petition allege the issue presented by Attorney General's Opinion # 79-251 is publici juris, affecting all taxpayers, the applicant and its employees, and is also of urgent public concern. The applicant Tax Commission admits it is required to comply with the mandate of the Attorney General until overruled in a court of competent jurisdiction. 5 The Commission alleges that enforcement of the Oklahoma Tax Code, 68 O.S. § 2351, et seq. is dependent upon a reciprocal agreement between it and the United States Internal Revenue Service and that the applicant has agreed with the Service to maintain the confidentiality of the information obtained therefrom. The applicant also alleges the disclosure would amount to a breach of the State's compact to its taxpayers that the returns will be kept confidential. 6
The State Auditor and Inspector alleges in his response to the application to assume original jurisdiction and petition for a writ of prohibition that 68 O.S.1971 § 106 68 O.S.Supp.1979 § 106 requires the office of State Auditor and Inspector to perform a continuous audit of the State Tax Commission and that a preliminary audit of the Tax Commission has "shown that there are serious flaws in the internal controls of the Oklahoma Tax Commission which could potentially have an adverse effect upon the collection and apportionment of taxes." The Auditor concedes that he and his agents are subject to criminal penalties (as above noted) for violation of the privilege. He states the only intended purpose of his examination of these records is to audit the Tax Commission and correcting, if need be, the "conduct of the tax collectors." Additionally, the Auditor and Inspector alleges the Commission does not have standing to raise the privilege accorded to taxpayers inasmuch as the privilege is designed only to protect the taxpayer and not the tax collector.
Under the facts as set forth above, this Court concludes a justiciable controversy exists and the issues concern the citizens of the state and the performance of public duties charged by law to each of the state agencies above named. The controversy, in our determination, is a sufficiently broad public concern that this court has chosen to exercise its discretionary power to assume original jurisdiction in this publici juris cause. Oklahoma Association of Municipal Attorneys v. State of Oklahoma, 577 P.2d 1310 (Okl.1978), Wiseman v. Boren, 545 P.2d 753 (Okl.1976).
The Oklahoma Tax Commission asserts that 68 O.S.1971 § 106 was not changed insofar as it specifies the duties to be performed by the office, but the title of the State Examiner and Inspector was changed to the State Auditor and Inspector by 68 O.S.Supp.1979 § 106. In view of the fact that 68 O.S.1971 §§ 106 and 205 have remained substantially the same since the enactment of the State Tax Uniform Procedure Act in 1937, the long continued construction The statutes do provide that the Auditor and Inspector is authorized and directed to "make a continuous examination and audit of the books and accounts of the Tax Commission." 68 O.S.Supp.1979 § 106. Title 74 O.S.Supp.1979 § 212 also provides that the Auditor "shall examine the books and accounts of the state officers whose duty it is to collect . . . funds of the state . . .". It is also provided in 74 O.S.Supp.1979 § 215, the title of which Section is: "Facilities for investigations Exhibits and information Offenses Powers and duties of State Auditor and Inspector" that . This section additionally makes misrepresentation and failure to produce the requested information a crime. Additionally, as previously noted, 68 O.S.Supp.1979 § 205(b)(3) excepts the records and files of the Commission from the privilege and confidentiality conferred by that same statute. It is therefore apparent that in no less than four separate statutes enacted in the 1979 Okl. Session Laws is it provided that the Auditor and Inspector shall have the power to examine the documents held by the Tax Commission.
of these statutory provisions by the department of government charged with their execution should not be overturned without urgent reason. 7 Additionally, the Commission contends the long period of administrative construction of these statutes as establishing these records to be confidential is to be regarded as legislative acquiescence to such construction in the face of legislative silence. It is the Tax Commission's position that the Examiner's request is beyond the pale of his statutory duties as historically interpreted, and the amended statutes do not change the accepted construction of those duties.
The Tax Commission's argument that the Auditor is limited to acquiring information found in the "books and accounts of the Tax Commission" as specified in 68 O.S.Supp.1979 § 106 or the "records and files of the Tax Commission," specified in 68 O.S.Supp.1979 § 205, is based upon two premises; one, that a taxpayer's return is not part of the books and records referred to, and two, that the privilege found in 68 O.S.Supp.1979 § 205 extends to all remaining classes of documents. While the first assumption is at least dubious, the second is expressly negated by the only substantive change made in subsection (a) of 68 O.S.1971 § 205 by 1976 Okl.Sess.Laws, Ch. 123 § 1. That change is the addition of the following emphasized language:
"(a) The records and files of the Tax Commission concerning the administration of this article, or of any state tax law, shall...
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