Gabriel M. Vigil and Elauterio Vigil

19-15

On March 14, 2018, the Department issued assessments to Gabriel M. Vigil and to Elauterio Vigil in the amount of $333,025.03 in tax, penalty, and interest for the periods between January 31, 2008 and September 30, 2011. The Taxpayers filed formal protests on May 30, 2018, and the Department acknowledged both protests on June 13, 2018. The main issue to be decided in this protest was whether the Taxpayers were liable for tax owed by Prestige Towing and Recovery, Inc. during the periods in question. The company had its certificate of corporation revoked in 2007. Though the normal statute of limitations for assessing a tax liability is seven years, this limit can be extended to ten years when there has been an intent to evade tax. The Department interprets evasion to include when there is a conscious awareness of the obligation to pay tax but a reckless disregard to do so. In this case the Taxpayers had filed and paid tax for the company in earlier years but during the periods assessed they made no attempt to file and the gross receipts tax collected from their customers was never remitted to the state. The cancellation of the certificate of incorporation by the Public Regulation Commission is significant because it means the liability in this period no longer falls to the corporation. Though the Taxpayers asserted they were not properly notified of the cancelation because it was sent to a physical address and not the mailing address, the Hearing Officer found this unpersuasive as the Commission had contacted them previously and requested information about earlier corporate reports using the mailing address. If a corporation has been canceled it is supposed to cease doing business and is not expected to resume its business activity. The Hearing Officer cited a court case where it was decided that persons who act as a corporation without the authority to do so were liable for all debts and liabilities. Upon a corporation’s cancellation, those officers, directors or shareholders who continue to engage in business should be held personally liable for such activity. The Taxpayers also made the argument that since a previous protest by Platinum Performance, LLC., Decision and Order No. 17-46, had determined in 2017 that another company was now the successor in business to Prestige Towing, this current protest was re-litigating the same issue. The Hearing Officer, however, determined that at no point was that protest concerned with whether Prestige Towing was still a corporation. Instead, the protest decided whether another company was a successor in business to it. The current protest was concerned solely with whether the Taxpayers were liable for the tax owed in these periods. This having been decided the Hearing Officer ordered that the Taxpayers were liable for the outstanding liability and the protest was denied.