MEADOWS v. OKLAHOMA TAX COMMISSION
2017 OK CIV APP 24
| Okla. Civ. App. | 2017Background
- In 2009 Meadows’ retirement distribution (garnished by federal court) resulted in $199,835.29 paid to his former employer; Wilmington withheld federal tax but did not withhold Oklahoma income tax. Meadows did not receive the funds.
- Meadows amended his 2009 Oklahoma return (filed 6/30/2010), reporting the distribution and owing $10,991; the Oklahoma Tax Commission (OTC) issued a tax warrant and began collection.
- Meadows repeatedly contacted OTC arguing Explorer (his employer) should have withheld Oklahoma tax; OTC treated early correspondence as settlement requests and denied two settlement proposals (Aug 2012 and Dec 2013).
- Meadows filed suits in federal court alleging OTC and Explorer failed to withhold Oklahoma tax; the federal court dismissed the suits for failure to exhaust administrative remedies and lack of mandamus jurisdiction.
- On April 23, 2014 Meadows filed an Application for Hearing under 68 O.S. § 207, alleging OTC failed to enforce withholding law against his former employer. OTC’s Compliance Division responded and conceded Meadows was entitled to a § 207 hearing but maintained the tax was due from Meadows.
- An administrative law judge treated Meadows’ application as an appeal of the denied settlement requests and, relying on 68 O.S. § 219.1(D) (no appeal from settlement denials), recommended dismissal for lack of jurisdiction; the Commission adopted that recommendation. The Court of Civil Appeals vacated and remanded for a hearing on the withholding-enforcement claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Meadows’ § 207 Application was an impermissible appeal of OTC denials of settlement (thus barred by 68 O.S. § 219.1(D)) | Meadows sought a hearing on OTC’s failure to enforce withholding law, not judicial review of settlement denials; he abandoned appealing settlement denials | OTC/ALJ treated the filing as an attempt to appeal denial of settlement and invoked § 219.1(D) to deny jurisdiction | Court held Meadows abandoned any appeal of settlement denials; administrative law judge erred. The application was not an appeal barred by § 219.1(D). |
| Whether Meadows is entitled to an administrative hearing under 68 O.S. § 207 on OTC’s alleged failure to enforce withholding law | Meadows alleged OTC failed to enforce withholding obligations of his former employer and sought a § 207 hearing to challenge collection/enforcement actions | OTC’s Compliance Division conceded a § 207 hearing is available but argued law does not require collection solely from payor and maintained taxes were due from Meadows | Court held Meadows’ § 207 application meets statutory requirements and he is entitled to a hearing; remanded for hearing on the withholding-enforcement issues. |
Key Cases Cited
- Turner v. Oklahoma Tax Commission, 858 P.2d 433 (Okla. 1993) (courts are final arbiters of tax statute meaning)
- Blitz U.S.A., Inc. v. Oklahoma Tax Commission, 75 P.3d 883 (Okla. 2003) (appellate review of OTC legal rulings)
- Troxell v. Oklahoma Department of Human Services, 318 P.3d 206 (Okla. 2013) (statutory interpretation is question of law)
- American Airlines, Inc. v. State ex rel. Oklahoma Tax Commission, 341 P.3d 56 (Okla. 2014) (OTC legal rulings subject to plenary appellate review)