Court Opinion

ID: 5128061
Source: CourtListenerOpinion
Date Created: 2021-11-20 02:15:35.749011+00
Date Added: 2024-06-11T08:23:04.602313
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Epifanio Torres,                                :
                     Petitioner                 :
                                                :
              v.                                :
                                                :
Commonwealth of Pennsylvania,                   :   No. 567 F.R. 2016
                Respondent                      :   Submitted: October 20, 2021

BEFORE:       HONORABLE P. KEVIN BROBSON, President Judge
              HONORABLE RENÉE COHN JUBELIRER, Judge
              HONORABLE PATRICIA A. McCULLOUGH, Judge
              HONORABLE ANNE E. COVEY, Judge
              HONORABLE MICHAEL H. WOJCIK, Judge
              HONORABLE CHRISTINE FIZZANO CANNON, Judge
              HONORABLE J. ANDREW CROMPTON, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION
BY JUDGE FIZZANO CANNON                             FILED: November 17, 2021

              Epifanio Torres (Torres) raises exceptions, in accordance with
Pennsylvania Rule of Appellate Procedure 1571(i)1, to this Court’s February 28,
2020, decision, which held that Torres’s petition for a refund of his Pennsylvania
income tax for 2005 was untimely. Torres v. Commonwealth, 228 A.3d 304, 309

       1
              Any party may file exceptions to an initial determination by the
              court under this rule within 30 days after the entry of the order to
              which exception is taken. Such timely exceptions shall have the
              effect, for the purposes of Pa.R.A.P. 1701(b)(3) (authority of a trial
              court or other government unit after appeal), of an order expressly
              granting reconsideration of the determination previously entered by
              the court. Issues not raised on exceptions are waived and cannot be
              raised on appeal.

Pa.R.A.P. 1571(i).
(Pa. Cmwlth. 2020) (Torres I). In Torres I, we concluded that the Department of
Revenue (Department) conducted an assessment rather than an audit to determine
Torres’s tax liability; therefore, Torres was required to file his petition for a refund
within six months after his tax payment rather than within a three-year period if he
had been subject to an audit. Id. Upon review, we deny and dismiss Torres’s
exceptions.

                                       Background
              The underlying facts were stipulated and are not in dispute.

              In 2005, [Torres] failed to timely file a Pennsylvania
              personal income tax return. The [Department] used
              information from the Internal Revenue Service to establish
              [Torres’s] personal income tax liability for the 2005 tax
              year. On January 9, 2008, the Department issued a
              “Notice of Assessment” to [Torres] relating to the 2005
              tax year. [Torres] did not appeal the assessment and paid
              the assessment on September 3, 2014.

              On October 29, 2015, [Torres] filed a petition with the
              Department’s Board of Appeals, requesting a refund. By
              decision and order dated December 30, 2015, the Board of
              Appeals dismissed [Torres’s] appeal for failing to file a
              timely refund request. Specifically, the Board of Appeals
              held, “Section 3003.1(d) of the Tax Reform Code of
              1971[2] [Tax Reform Code], as amended, provides that for
              payments made as a result of an assessment, a petition for
              refund must be filed within six (6) months of the actual
              payment.” The Board of Appeals determined that [Torres]
              was seeking a refund of payments made as a result of an
              assessment.     Because [Torres] made payment on
              September 3, 2014[,] and because his petition for refund

       2
         Tax Reform Code of 1971, Act of March 4, 1971, P.L. 6, as amended, 72 P.S. §§ 10003.1.
Section 3003.1 was added by Section 14 of the Act of July 1, 1985, P.L. 78.
                                              2
              was not filed until more than a year later on October 29,
              2015, it was beyond that statutory deadline of six months
              and, therefore, was untimely.

              [Torres] then appealed to the Board of Finance and
              Revenue, which, by order dated June 8, 2016, denied
              [Torres’s] appeal for failure to file a timely petition for
              refund. The Board of Finance and Revenue rejected
              [Torres’s] argument that the Department issued its
              assessment pursuant to an audit, and that, therefore,
              Section 3003.1(b) of the Tax Reform Code applied,
              pursuant to which [Torres] had to file a petition for refund
              within three years of actual payment of the tax. 72 P.S.
              § 10003.1(b). The Board of Finance and Revenue
              determined [Torres] could not use Section 3003.1(b) to
              extend the six-month period in which to timely file a
              petition for refund. Consequently, the Board of Finance
              and Revenue concluded that the Board of Appeals
              properly dismissed [Torres’s] petition for refund.

              [Torres] then filed a petition for review with this Court[.]

Torres I, 228 A.3d at 306-07 (emphasis added).
              In Torres’s initial appeal to this Court, he argued that the Department’s
actions constituted an audit and also gave rise to various constitutional violations.
Torres I, 228 A.3d at 307. A three-judge panel functioning as a trial court3
considered the relevant statute, which is Section 3003.1 of the Tax Reform Code.
72 P.S. § 10003.1. Pursuant to Section 3003.1, when the Department conducts an
assessment and receives tax funds from a taxpayer, the taxpayer has six months from
payment to seek a refund; however, if the tax funds are paid as the result of an audit
conducted by the Department, the taxpayer has three years from payment to seek a

       3
         In appeals from decisions of the Board of Finance and Revenue, the Commonwealth
Court’s review is de novo because we function as a trial court, even though such cases are heard
in our appellate jurisdiction. Norris v. Commonwealth, 625 A.2d 179, 182 (Pa. Cmwlth. 1993).

                                               3
refund. 72 P.S. § 10003.1(b), (d). The timeliness of Torres’s petition for a refund
thus depended on whether the taxes he paid for 2005 were determined via assessment
or via audit. Torres I, 228 A.3d at 307.
             The term “audit” is not defined in the Tax Reform Code. As such, in
Torres’s initial appeal, this Court applied the definition of “audit” in Webster’s Third
New International Dictionary: “a formal or official examination and verification of
books of account”; “a methodical examination and review of a situation or condition
. . . concluding with a detailed report or findings”; or “the final report following a
formal examination of books of account.” Torres I, 228 A.3d at 308 (citing In re
Elk Cnty. Auditors, 903 A.2d 652 (Pa. Cmwlth. 2006) (adopting dictionary definition
of “audit” where term was not defined in The County Code, Act of Aug. 9, 1955,
P.L. 1721, as amended, 16 P.S. § 101-3000.3903)). We also considered the of-
record affidavit of Tracy Hulstine, Acting Director of the Department’s Bureau of
Individual Taxes, who stated that the Department’s assessment of Torres’s tax
burden for 2005 was determined by its Pass Through Business Office and not its
Bureau of Audits, which conducts the Department’s formal audits. Id. at 308.
             We ultimately concluded that Torres failed to establish that the
Department’s determination of his 2005 tax liability constituted an audit. Torres I,
228 A.3d at 308-09. We noted that the evidence did not reflect a formal examination
of Torres’s books and records, but rather entailed the Department “merely using
information it obtained from the Internal Revenue Service” to derive Torres’s tax
burden for 2005. Id. at 308. Accordingly, we held that Torres was subject to the
six-month assessment deadline and the Board of Finance and Review correctly
found that his petition for a refund, filed over a year after he paid the taxes at issue,
was untimely. Id. at 308-09. We also found Torres’s constitutional claims were

                                           4
waived, as they were neither presented in his brief’s statement of questions involved
nor developed in the brief. Id. at 309. We therefore affirmed. Id.

                                     Exceptions
             Exceptions filed pursuant to Pa. R.A.P. 1571(i) have the same effect as
an order granting reconsideration. See Consol. Rail Corp. v. Commonwealth, 679
A.2d 303, 304 (Pa. Cmwlth. 1996) (en banc), aff’d, 691 A.2d 456 (Pa. 1997). The
party seeking reconsideration via exceptions bears the burden of proving either that
its position or the circumstances have changed. Kentucky Fried Chicken of Altoona,
Inc. v. Unemployment Comp. Bd. of Rev., 309 A.2d 165, 167 (Pa. Cmwlth. 1973).
Reassertion of previously rejected arguments, without more, will result in denial and
dismissal of the exceptions.     Consol. Rail Corp., 679 A.2d at 304 (denying
exceptions presenting the same arguments already addressed and denied in the initial
appeal); see also Greenwood Gaming & Ent., Inc. v. Commonwealth, 218 A.3d 982,
988 (Pa. Cmwlth. 2019) (same); Kalodner v. Commonwealth, 636 A.2d 1230, 1231
(Pa. Cmwlth. 1994) (same).
             Torres argues in his exceptions, as he did previously, that the
Department’s use of his federal tax information from the Internal Revenue Service
to calculate his Pennsylvania income tax liability for 2005 (because he had not filed
a return) met the adopted definition of an “audit” because it was “a formal or official
examination and verification of books of account” and “a methodical examination
and review of a situation or condition.” Torres’s Brief on Exceptions at 8-9 (citing
Elk Cnty. Auditors, 903 A.2d at 655). Therefore, Torres insists he had three years
from when he paid the taxes in question to seek a refund. Id.
             The Commonwealth responds that Torres’s arguments on his
exceptions are identical to those he raised previously, which were thoroughly
                                       5
considered and rejected by this Court. Thus, there is no basis for this Court to sustain
his exceptions or vacate its previous decision.          Commonwealth’s Brief on
Exceptions at 9-16.
             Torres’s arguments on his exceptions are virtually identical to those he
raised to this Court in Torres I. They are the same conclusory and unsupported
positions as in his initial appeal, all of which were thoroughly addressed in this
Court’s earlier published opinion. See Torres’s Original Brief at 8; Torres I, 228
A.3d at 307-09. As we explained previously:

             [I]t is apparent that the Department determined [Torres’s]
             tax liability by merely using information it obtained from
             the Internal Revenue Service. Thereafter, using that
             information, the Department issued a “Notice of
             Assessment” to [Torres]. Although [Torres] has the
             burden of proof and argues an audit took place, [he] has
             offered no evidence to demonstrate verification of, or a
             formal examination of, books of account. Additionally,
             [Torres] does not challenge or address Hulstine’s affidavit.
             Instead, [Torres] offers only his counsel’s statement that
             he “is a tax practitioner and has undergone many audits of
             this nature” and that the “Department of Revenue obtains
             records from the Internal Revenue Service and uses them
             to conduct an audits [sic] of the taxpayer’s return.” These
             statements, however, are merely conclusory with no
             supporting analysis and no citation to the record or
             applicable legal authority. Further, [Torres’s] counsel’s
             statements are not evidence, and they are not sufficient to
             sustain [Torres’s] burden. Therefore, we agree with the
             Board of Finance and Revenue’s conclusion that the
             Department did not conduct an audit; “it merely compared
             its records to that of another taxing agency and issued an
             assessment notice.”
Torres I, 228 A.3d at 308-09 (internal citations and footnote omitted). In light of
Torres’s failure to assert or establish a change in circumstances or any other basis

                                           6
for reconsideration, we remain unconvinced that the Department’s actions amounted
to an audit such that Torres had the benefit of the longer timeframe to seek his refund.
               Torres also reiterates in similarly conclusory fashion his constitutional
claims4 and his requests for relief pursuant to 42 U.S.C. §§ 1983 and 1988, which
authorize awards of monetary damages and attorneys’ fees for deprivations of civil
rights by governmental authorities. Torres’s Brief on Exceptions at 10. Torres has
once again waived these arguments as they are neither presented in his statement of
questions involved nor developed and discussed in any depth in his brief. See Torres
I, 228 A.2d at 309 (citing Pa.R.A.P. 2116(a) and Pa.R.A.P. 2119(a).
               Finally, although Torres asserts there is no ambiguity in Section 3003.1
of the Tax Reform Code because he firmly (if incorrectly) believes he was subject
to an audit and therefore was eligible for the three-year deadline to seek his refund,
he posits that if there is any ambiguity, it should be resolved in his favor. Torres’s
Brief on Exceptions at 10. We find this conclusory assertion likewise waived as it
is neither presented in his “Statement of Questions Involved” nor developed in his
brief. Pa.R.A.P. 2116(a); Pa.R.A.P. 2119(a)).
               Having reviewed the facts as stipulated, our previous opinion, and the
briefs of both sides, we fail to find that Torres has presented any change in position
or circumstances that would warrant changing or vacating this Court’s previous
decision. Accordingly, we deny and dismiss Torres’s exceptions. See Consol. Rail

       4
           Torres cites the United States and Pennsylvania Constitutions for the premise that the
Department’s actions have deprived him of property without due process of law. Torres’s Brief
on Exceptions at 10 (citing U.S. Const. amend. XIV & Pa. Const. art. I, §§ 9, 10). Torres also cites
Article II, Section 1 of the Pennsylvania Constitution for the premise that administrative actions
must conform to the agency’s authorizing legislation, and Article VIII, Section 1 for the premise
that all tax legislation upon the same class of subjects must be uniform. Id. (citing Pa. Const. art.
II, § 1 & art. VIII, § 1).
                                                 7
Corp., 679 A.2d at 304 (dismissal of exceptions where moving party failed to
establish basis for vacating previous decision).

                         Application to File Amicus Brief
             On July 6, 2020, Reed Smith LLP (Reed Smith) filed its “Application
for Leave to File an Amicus Curiae Brief in Support of Commonwealth of
Pennsylvania” and appended its proposed amicus curiae brief thereto.              The
Commonwealth filed an application to strike, asserting Reed Smith’s brief was both
untimely and improper. In light of our disposition of this appeal on the merits as set
forth above, we do not reach this dispute and dismiss Reed Smith’s Application as
moot.

                                    Conclusion
             Accordingly, Torres’s exceptions to this court’s order of February 28,
2020, are dismissed. Reed Smith’s Application for Leave to File an Amicus Curiae
Brief is dismissed as moot.

                                       __________________________________
                                       CHRISTINE FIZZANO CANNON, Judge

                                          8
         IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Epifanio Torres,                       :
                   Petitioner          :
                                       :
            v.                         :
                                       :
Commonwealth of Pennsylvania,          :   No. 567 F.R. 2016
                Respondent             :

                                  ORDER

            AND NOW, this 17th day of November, 2021, Petitioner’s exceptions
to the order of February 28, 2020, in the above-captioned matter are DISMISSED.
The application of Reed Smith LLP to file an amicus curiae brief in the above
captioned matter is DISMISSED as moot.
            Judgment is hereby entered in favor of Respondent.

                                    __________________________________
                                    CHRISTINE FIZZANO CANNON, Judge