Nature's Way, Inc. v. Commissioner of Revenue (March 12, 2009)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD




NATURE'S WAY, INC. 		v.  	COMMISSIONER OF REVENUE
 

Docket No. C287403				Promulgated:
							March 12, 2009
  		   		

This is an appeal filed under the formal procedure pursuant to G.L. c. 58A, § 7 and c. 62C, § 39, from the refusal of the Commissioner of Revenue ("Commissioner") to allow Nature's Way, Inc. ("the appellant") to carry forward an overpayment of corporate excise from tax year 2000 to tax year 2001.  
Commissioner Rose heard the appeal.  Chairman Hammond and Commissioners Scharaffa, Egan and Mulhern joined him in the decision for the appellee.  
These findings of fact and report are made at the request of the appellant pursuant to G.L. c. 58A, § 13 and 831 CMR 1.32.

Daniel Atkins, pro se, for the appellant.
Anne P. Hristov, Esq. for the appellee. 

FINDINGS OF FACT AND REPORT
	Based on the testimony and exhibits offered into evidence at the hearing of this appeal, the Appellate Tax Board ("Board") made the following findings of fact.
On December 27, 2002, the Commissioner issued to the appellant a Notice of Failure to File corporate excise returns for the tax years ended June 30, 2000 ("tax year 2000") and June 30, 2001 ("tax year 2001").  According to the records of the Department of Revenue ("Department"), the appellant filed its tax year 2000 corporate excise return, showing a refund owed the appellant, and its tax year 2001 corporate excise return, claiming a carry-forward of its 2000 overpayment, on December 6, 2005.  By letter dated December 27, 2005, the Commissioner advised the appellant that it was not entitled to a refund or carry-forward of the overpayment reported on its tax year 2000 corporate excise return because the request for refund or carry-forward was made more than three years from the September 15, 2000 statutory due date for the tax year 2000 return.
Subsequently, on February 20, 2006, the Commissioner issued to the appellant a Notice of Assessment, which notified the appellant that it had an outstanding tax liability, plus interest and penalties, for tax year 2001.  The appellant filed an Application for Abatement on    March 30, 2006 claiming that its tax year 2000 corporate excise return, which showed an overpayment, was timely filed and therefore it was entitled to a carry-forward of the 2000 overpayment to offset its 2001 tax year liability.  The Commissioner denied the abatement application on July 18, 2006.  On September 15, 2006, the appellant timely filed its petition with the Board.  Based on these facts, the Board found and ruled that it had jurisdiction over the subject appeal.     
	The sole issue in the present appeal is whether the appellant's claim for refund or carry-forward of its tax year 2000 corporate excise overpayment was filed within three years from the date that the return was due to be filed, September 15, 2000.  The appellant argued that both its 2000 and 2001 corporate excise returns were filed on January 4, 2002.  The Commissioner, however, maintained that the appellant's 2000 and 2001 tax returns were not filed until December 5, 2006, more than three years after the respective statutory due dates of September 15, 2000 and September 15, 2001.
	In support of its claim that it was entitled to an abatement, the appellant offered the testimony of        Mr. Ronald Christensen.  Mr. Christensen has been the appellant's accountant for more than ten years.          Mr. Christensen testified that it was his general office procedure to prepare a client's tax return and then give it back to the client to be signed and mailed.  He further testified, however, that for this particular taxpayer and for the tax years at issue, he deviated from his general office practice.  Mr. Christensen maintained that the tax returns for tax years 2000 and 2001 were prepared on January 2, 2002, and that on the same date, the trustee of the appellant's predecessor, Mr. Timothy Nourse, came to Mr. Christensen's office, signed the returns and left them with Mr. Christensen to be mailed.  The trustee, however, did not testify in this appeal.  Moreover, Mr. Christensen testified that his office did not have a return receipt for the mailing of these returns nor did his office maintain a log of outgoing mail which would support his claim that for this particular year he deviated from his general tax preparation practice and mailed the returns directly to the Department on behalf of the appellant.  
	Mr. Christensen also testified that sometime in the latter part of 2005 he learned that the appellant's 2000 and 2001 Massachusetts corporate excise returns were "missing."  He further testified that he did not have copies of the original returns purportedly signed by the trustee in 2002.  Therefore, Mr. Christensen had Mr. Daniel Atkins, Jr., the appellant's president in 2005, sign copies of the returns allegedly prepared in 2002, and forwarded them to the Department. 
In support of her denial of the appellant's claim for a refund or carry-forward of the 2000 tax overpayment, the Commissioner first offered the testimony of Paul O'Sullivan, a tax examiner with the Department.  One of  Mr. O'Sullivan's responsibilities is to review taxpayers' MASSTAX System ("MASSTAX") printouts concerning taxpayer accounts in preparation for trial.  He testified that MASSTAX is a computerized ledger system that records a taxpayer's return filing, assessment and tax payment history.  
Mr. O'Sullivan testified that according to the MASSTAX records for appellant's tax years 2000 and 2001 corporate excise activity, there were two estimated tax payments made on September 15, 1999 and December 22, 1999 and that on December 6, 2005, the appellant filed its corporate excise returns for tax years 2000 and 2001. These were the only events recorded on the MASSTAX System concerning the appellant's corporate excise liability for the relevant periods.  
To further corroborate Mr. O'Sullivan's testimony that the appellant's returns were not timely filed, the Commissioner offered into evidence copies of the appellant's Form 355A, domestic corporate excise returns, for tax periods 2000 and 2001, which were date stamped "Received" by the Department's Data Integration Bureau on December 6, 2005.  These returns reflected a date of preparation of January 2, 2002, as maintained by the appellant.  However, the returns were not signed by trustee Timothy Nourse, but instead were signed by Daniel Atkins, Jr., the appellant's president, and did not reflect a date of signing.   
According to the testimony of Daniel Atkins, Jr., he was named president of Nature's Way in June 2003.  Prior to that time, he was only a director of the corporation and, he conceded, lacked the authority to sign any tax returns.  Mr. Atkins testified that he was surprised to see his signature on the corporate excise returns offered into evidence by the Commissioner, that he was unaware of where the returns came from and that he had no memory of having signed these returns.
Based on the evidence presented, the Board found that the appellant failed to prove that its claim for refund or carry-forward of its tax year 2000 corporate excise overpayment was filed within three years of the date that the return was due.  The Board found that Mr. Christensen's testimony regarding the preparation and mailing of the returns in question was unsubstantiated and lacked supporting evidence such as the trustee's testimony or a mail receipt.  The Board further found that the MASSTAX records and the returns offered into evidence by the Commissioner supported the Board's finding that the appellant's tax year 2000 tax return was not filed until December 6, 2005, more than three years from the September 15, 2000 due date.
Accordingly, the Board issued a decision for the appellee in this appeal.

OPINION
	General Laws c. 62C, § 11 provides in pertinent part, "[e]very domestic business corporation . . . shall, on or before the fifteenth day of the third month following the close of each taxable year, make a return giving such information as the commissioner may deem necessary for the determination of the taxes imposed upon them by chapter sixty-three."  Further,
[a]n application for an abatement or a refund of an overpayment of any tax where a return which is required to be filed has not been timely filed, shall be made and filed, along with the overdue return, within 3 years from the date that the return was due to be filed, without regard to extensions . . .  An application for an abatement or refund filed beyond those alternate deadlines shall be denied by the commissioner.  

G.L. c. 62C, § 36.
	In the present appeal, the appellant's corporate excise return for tax year 2000 was due on or before September 15, 2000.  Pursuant to G.L. c. 62C, § 36, in order for the appellant to receive a refund of any tax overpayments reflected on the 2000 tax return, the appellant's return must have been filed on or before September 15, 2003.
	Based on the evidence presented, the Board found that the appellant failed to offer credible, persuasive evidence that it filed its tax year 2000 corporate excise return within three years of its due date.  Moreover, the Board found that the MASSTAX records and the returns offered into evidence by the Commissioner supported the Board's finding that the appellant's tax return for tax year 2000 was filed on December 6, 2005, more than three years after the statutory due date.  "The credibility of witnesses, the weight of the evidence, and inferences that reasonably may be drawn from the evidence are matters for the board."  General Mills, Inc. v. Commissioner of Revenue, 440 Mass. 154, 161 (2003).  
The Board therefore ruled that, pursuant to G.L. c. 62C, § 36, the Commissioner's denial of the appellant's credit carry-forward was appropriate.  Accordingly, the Board issued a decision for the appellee in this appeal.

APPELLATE TAX BOARD

		  		   By:				_____	____
  Thomas W. Hammond, Jr., Chairman





A true copy,


Attest:		______			
	  Clerk of the Board
					

 The appellant is the successor in interest to Atkins Farm Fruit Marketing, Inc.  The president of Atkins Farm Fruit Marketing, Inc., Daniel Atkins, Sr., died in June 1997.  The Trustee named in Mr. Atkins' will ran the corporation for a period of time until Daniel Atkins, Jr., was named President of the corporation.  On or about July, 2003, the name of the corporation was changed to Nature's Way, Inc.  In these Findings of Fact and Report, "appellant" refers to both Atkins Farm Fruit Marketing, Inc. and Nature's Way, Inc. 

	ATB 2009-223