MEADOWS v. OKLAHOMA TAX COMMISSION
2017 WL 2023541
Okla. Civ. App.2017Background
- Meadows pled guilty to federal embezzlement; restitution ordered to employer Explorer; federal garnishment of his retirement account resulted in a $199,835.29 transfer to Explorer, with federal but not Oklahoma tax withheld.
- Meadows filed an amended Oklahoma 2009 return showing the distribution and tax due; Oklahoma Tax Commission (OTC) assessed tax, interest, penalties and issued collection actions.
- Meadows repeatedly asked the OTC to require Explorer to have withheld and remitted Oklahoma tax; OTC treated his communications as settlement requests under 68 O.S. § 219.1 and denied two settlement proposals (Aug 2012 and Dec 2013).
- Meadows filed suits in federal court (naming Explorer and OTC); federal court dismissed them for failure to exhaust administrative remedies and for lack of jurisdiction to compel OTC to collect from Explorer.
- On April 23, 2014 Meadows filed an Application for Hearing under 68 O.S. § 207 asserting OTC failed to enforce withholding law and seeking a hearing; the OTC Compliance Division conceded a § 207 hearing was available but argued no statutory duty required collecting solely from the payor.
- An administrative law judge treated Meadows’ application as an appeal of the denied settlements and dismissed for lack of jurisdiction under § 219.1(D); the Court of Civil Appeals vacated and remanded for a hearing on Meadows’ § 207 application.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether OTC lacked jurisdiction because Meadows was appealing denials of settlement proposals under 68 O.S. § 219.1(D) | Meadows contended his April 23, 2014 Application sought a § 207 hearing on OTC’s failure to enforce withholding law, not an appeal of settlement denials | OTC/ALJ treated the filing as an appeal of denials of settlement and invoked § 219.1(D) (no right of appeal) to dismiss | Court held ALJ erred: Meadows abandoned any appeal of settlement denials; his § 207 application entitles him to a hearing |
| Whether Meadows’ § 207 application satisfied statutory requirements for a hearing | Meadows argued the application was the proper administrative step to exhaust remedies and raised withholding enforcement issues | OTC conceded § 207 hearing was available but disputed any statutory duty to collect only from payor | Court held the § 207 filing met statutory prerequisites and remanded for hearing; did not decide scope of issues to be litigated |
Key Cases Cited
- Troxell v. Oklahoma Dep't of Human Servs., 318 P.3d 206 (2013 OK 100) (statutory interpretation is a question of law)
- American Airlines, Inc. v. State ex rel. Oklahoma Tax Comm'n, 341 P.3d 56 (2014 OK 95) (appellate reexamination of agency legal rulings is plenary and nondeferential)
- Blitz U.S.A., Inc. v. Oklahoma Tax Comm'n, 75 P.3d 883 (2003 OK 50) (principle that courts, not the Commission, are final arbiters of statutory meaning)
- Turner v. Oklahoma Tax Comm'n, 858 P.2d 433 (1993 OK 77) (courts interpret tax statutes as ultimate authority)