ALJDEC decisions subject to certification as final

16F-2016.099-ACY · State Board of Accountancy · 2016-08-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 28, 2016, at 8:30 a.m. APPEARANCES: The Arizona State Board of Accountancy (“the Board”) was represented by Michael Raine, Esq., Assistant Attorney General; Tiffany White (“Respondent”) and Tiffany White, CPA, PLC (“Respondent Firm”) failed to appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Procedure 1. The Arizona State Board of Accountancy (“the Board”) has issued to Respondent Certified Public Accountant Certificate No. 11790-E and to Respondent Firm Certified Public Accounting Firm Registration No. 2891-L. Respondent is the sole owner and the only certified public accountant who is a member of Respondent Firm. 2. Between approximately May 15, 2015, and January 15, 2016, the Board received seven complaints from consumers against Respondent and Respondent Firm. The Board conducted investigations into the complaints. The Board’s Tax Practice Committee reviewed the investigations, interviewed Respondent, and recommended that the Board refer each case for hearing. The Board accepted the Tax Practice Committee’s recommendation and referred the complaints to the Office of Administrative Hearings (“OAH”), an independent agency, for an evidentiary hearing. 3. On June 20, 2016, the Board issued a Notice of Public Hearing and Complaint, making certain factual allegations and based on those allegation, charging Respondent with having committed unprofessional conduct as defined by A.R.S. § 32-741(A)(4) and having committed unprofessional conduct as defined by A.R.S. § 32- 741(A)(9) by violating six different administrative rules or statutes, namely (1) A.A.C. R4-1-455.01(G); (2) A.A.C. R4-1- 455.03(A); (3) A.A.C. R4-1-455.02(B); (4) A.A.C. R4-1-455.02(A) and A.R.S. § 32-749(A); (5) A.A.C. R4-1-455.03(F) and A.R.S. § 32- 741(A)(15); and (6) A.R.S. § 32-741.02(B). 4. The Board’s Notice of Public Hearing and Complaint also notified Respondent that a hearing would be held at OAH on July 28, 2016, at 8:30 a.m. The Board sent copies of the Notice of Public Hearing and Complaint via U.S. First Class Mail and Certified Mail to Respondent at her residential address of record and to her current and former business addresses of record. 5. A hearing was held on July 28, 2016. The Board submitted 30 exhibits and presented the testimony of two witnesses: (1) Christopher Rasmussen, who is employed by the Board as a Program Project Specialist II; and (2) Marshall King, CPA (“Mr. King”), the Board’s contract investigator. 6. Respondent did not request to appear telephonically and did not request that the hearing be continued. Although the start of the duly noticed hearing was delayed seventeen minutes to allow Respondent additional travel time, she did not appear, personally or through an attorney, and did not contact OAH to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence to defend her Certified Public Accountant Certificate or Respondent Firm’s registration. / / / / / / / / Additional Hearing Evidence Background and Standards 7. Mr. King testified that the standards governing CPAs in Arizona are found at the Board’s statutes and regulations as well as in the standards of the American Institute of Certified Public Accountants (“AICPA”) and IRS Circular 230. Mr. King testified that the Board’s rules incorporate the AICPA standards by reference. 8. Mr. King testified that he investigated Complaint Nos 099 and 100, after which Respondent stopped responding to the Board’s inquiries. Because the Board only refers complaints to a contract investigator after the Board has received the CPA’s response to the complaint, the Board did not initially refer the other five complaints against Respondent to Mr. King. Mr. King testified that he reviewed the other five complaints to prepare for the hearing, but that the lack of communication with Respondent and lack of access to her files hindered his investigation. 9. Mr. King testified that some of the complaints alleged that Respondent had refused to return original documents. Mr. King testified that the professional standards require unequivocally that CPAs return original documents to clients, regardless of whether they have a payment dispute with the client. CPAs do not have to provide work product to clients. 10. Mr. King testified that in 2014, the Treasury Department filed changes in tax regulations governing the reporting of personal non- real estate assets, which clarified that such assets should receive different treatment. Mr. King testified that professionals faced a major project to review every client’s assets to see if a form 3115 would be required. Mr. King testified that in late 2014, most practitioners informed their clients of the change in the regulations. 11. Mr. King testified that in February 2015, the Treasury Department came out with a simplified method to provide relief for smaller businesses to relieve them of the obligation of filing a Form 3115. File No. 2015.099 12. On May 20, 2015, the Board received a complaint against Respondent from Complainant 1, which alleged that Respondent had failed to return original documents, had billed for work that either was not performed or that was unnecessary, had charged much more for similar services than Complainant’s prior CPA had charged, including late fees, and had engaged in other unprofessional conduct. The complaint was assigned to Mr. King for investigation.[1] 13. Complainant 1 attached to the complaint a letter from Donna Benjamin, CPA dated December 29, 2014, informing her clients that she was selling her business to Respondent. An internal email that was attached indicated that Ms. Benjamin would continue as a consultant. Neither the letter nor the email mentioned any changes in practice or billing rates or imposition of late fees. 14. Mr. King testified that Respondent handled personal and business tax returns and appeared to use different engagement letters for different practices. The Board submitted an engagement letter for a Complainant 1’s personal taxes dated January 20, 2015,[2] and an engagement letter for a Complainant 1’s business dated March 4, 2015.[3] 15. Complainant 1 also attached Respondent’s March 4, 2015 engagement letter in which she informed new business clients that the IRS and the U.S. Treasury had issued final intangible property regulations that could affect a change in the method of accounting for tangible property and that taxpayers may be required to file an IRS Form 3115. 16. The form engagement letters did not mention increased rates or late fees, did not state that Respondent would have authority to access the client’s bank accounts, and stated that fee disputes would be resolved through mediation. Both letters stated that it was Respondent’s policy to return client records, without exception. 17. The Board submitted an internal email from Respondent’s office that indicated that Respondent would be “preparing Form 3115 for the tax year 2014 for all of our business clients . . . .”[4] Mr. King testified that the statement did not make sense because the business had to have tangible personal property to file a Form 3115 and some businesses did not, especially if they provided only services. 18. Mr. King testified that by March 4, 2014, the Treasury Department had provided the simplified procedure which made the filing off a Form 3015 unnecessary for Complainant 1 and for many of Respondent’s other business clients, but Respondent’s engagement letter did not address the change. 19. Mr. King testified that Respondent charged a fee for preparing a Form 3115 for all business clients. Mr. King testified that Respondent should have provided an estimate of the cost of preparing the form and discussed it before billing the client. 20. Mr. King testified that Complainant 1’s business provided personal services with less than $20,000 in income in 2014, and that the only personal asset in the 2014 return was an airplane. Respondent did not show any depreciation for or personal use of the airplane and although she acknowledged her error to Mr. King, he did not know whether she communicated the error to Complainant 1 or filed an amended return. 21. Mr. King testified that if a business had only one tangible asset that was not fully depreciated, a Form 3115 would not need to be filed. Mr. King testified that preparing a Form 3115 was an unnecessary service for Complainant 1 and that Respondent’s charge for preparing the form constituted unprofessional conduct. 22. Mr. King testified that Respondent’s failure to inform the client of the simplified procedure in the engagement letter, failure to depreciate the airplane, and charge for completing the Form 3115 violated A.A.C. R4-1-455.01(G). 23. Mr. King testified Respondent refused to return Complainant 1’s records unless he agreed to sign a release. Mr. King testified that Respondent told him that she had returned Complainant 1’s records. Mr. King testified that he later realized Respondent had lied to him and that although Complainant 1 unequivocally requested that Respondent return the original documents, she refused unless he agreed to sign a release. 24. Mr. King testified that it is not proper for a CPA to retain a client’s original documents because the client may not be able to retain another professional to prepare tax returns without the documents. Although Mr. King assumed that Complainant 1 had obtained an extension, he did not know if Complainant 1 ever had the documents that would have allowed him to file a business tax return. Mr. King testified that Circular 230 and the AICPA standards require CPAs to return original documents to clients. 25. Mr. King testified that CPAs owe a fiduciary duty when they handle client funds and act as trustee for their clients’ assets. CPAs have a duty to act with integrity, honesty, objectivity, and due care when dealing with their clients and have a duty to put their clients’ interests above their own. Although Respondent’s request that Complainant 1 sign a release to acknowledge that he had received his records was not unreasonable since his relationship with Respondent had deteriorated, Respondent still needed to return the records. Mr. King noted that as of December 14, 2015, when the Board interviewed Respondent, she still had not returned Complainant 1’s records. Mr. King testified that Respondent’s refusal to return Complainant 1’s records was a discreditable act. 26. On January 13, 2016, Complainant 1 filed an amendment to his complaint with the Board, stating that on August 27, 2015, Respondent had made an unauthorized withdrawal from his bank account in the amount of $2,410.35.[5] Mr. King noted that he had issued his initial report of his investigation into the complaint on August 10, 2015.[6] 27. Mr. King noted that Complainant 1 had terminated his relationship with Respondent several months before the August 27, 2015 unauthorized withdrawal, in part because he objected to and refused to pay her fees. 28. The invoices that Respondent satisfied through the unauthorized withdrawal from Complainant 1’s bank account included late fees and interest. Respondent acknowledged in the Board’s interview that she accessed clients’ bank accounts and credit cards to pay her fees.[7] Respondent also acknowledged that she did not inform Complainant 1 before she took funds from his checking account.[8] 29. Mr. King testified that Respondent was not acting honestly or with integrity. There was nothing in the engagement letters or Respondent’s other communications that authorized her to withdraw client funds without notice. An overdraft could result. Mr. King testified that a CPA should have heightened sensitivity to the issue. Based on the engagement letter, clients would expect fee disputes to be resolved through mediation, but Respondent resorted to self-help, using information that she had obtained through rendering professional services to clients or her purchase of Ms. Benjamin’s CPA firm. 30. Mr. King testified that Complainant 1 stated that Respondent had not provided the services described in detail on her invoices, but that Respondent only stated that the invoices may have been poorly worded. Mr. King testified that based on what he saw in Respondent’s work product, Complainant 1’s allegations that Respondent billed him for services that she had not provided appeared to have merit. File No. 2015.100 31. The Board received a complaint on May 20, 2015 from Complainant 2, who engaged Respondent to prepare personal tax returns and tax returns for several distinct businesses. Complainant 2 alleged that Respondent engaged in improper billing practices, charged undisclosed and exorbitant interest rates and late fees on unpaid fees, and engaged in false and misleading collection practices. 32. Mr. King testified that Respondent billed Complainant 2 for preparing an unnecessary 3115 Form for tangible personal property. Mr. King had pointed out a duplicate billing to Respondent. In her response, Respondent stated that Complainant 2 “has no one to blame but himself,” that “[h]is failure to pay his invoices have left him subject to collections, late fees, and finance charges,” and that “[a] $1500 client courtesy granted to him has no effect on relations and creates no goodwill.”[9] Mr. King testified that although he believed Respondent’s duplicate billing to have been an honest mistake, correction of a duplicate charge was not a client courtesy. 33. Mr. King testified that Complainant 2 had several different engagements with Respondent, including a personal return and returns for several business entities in which Complainant 2 was the 100% owner or majority owner. 34. On September 1, 2015, Complainant 2 supplemented the complaint by informing the Board that on August 31, 2015, Respondent attempted an unauthorized Automated Clearing House (“ACH”) transfer of $9,263.63 from a bank account owned by one of Complainant 2’s several business entities that received services from Respondent for amounts that were owed by multiple other entities, not only the entity that owned the account.[10] Complainant 2 stated that he would file a police report. Mr. King testified that Respondent’s first attempt to withdraw funds from Complainant 2’s bank account failed because the account had insufficient funds for the transfer. 35. On October 12, 2015, Complainant 2 further supplemented the complaint to allege that, after the complaint had been filed with the Board, on September 9, 2015, Respondent had made an unauthorized withdrawal from Complainant 2’s bank account in the amount of $3,000.00. This amount reflected not only the alleged unpaid fees for the entity that owned the bank account, but amounts alleged to be due from multiple distinct entities that did not own the bank account. 36. Respondent eventually referred the accounts to a collections attorney instead of going to mediation, as required by the engagement agreement. In a series of communications, Complainant 2, who is an attorney, stated that all amounts were in dispute. Mr. King pointed out that the collection agency sought a total amount based on what Respondent said was owed collectively by all the business entities. 37. Complainant 2 later notified that Board that on November 13, 2015, Respondent attempted to make an unauthorized withdrawal from a bank account that had been closed several years earlier.[11] Mr. King testified that Respondent was attempting to take Complainant 2’s money using information obtained through her purchase of Ms. Benjamin’s practice and to satisfy her invoices through any means available. Mr. King testified that a CPA knows that independent legal entities are not liable for the bills of other entities based on common ownership. 38. Mr. King testified that Respondent’s actions in attempting to make and actually making ACH withdrawals to pay herself for debts allegedly owed by related legal entities for professional services were egregious.[12] File No. 2016.042 39. The Board received a complaint on November 4, 2015, from Complainant 3, who had engaged Respondent to prepare personal and business tax returns. Complainant 3 alleged that Respondent charged excessive fees, including for preparing a Form 3115 without disclosing the cost, failed to return client records despite multiple written requests, and made three unauthorized ACH withdrawals of money from a personal bank account totaling $6,322.46 and withdrawing $3,250.00 from a business bank account.[13] 40. Complainant 3 submitted an email from another CPA that opined that a Form 3115 was not required for the business.[14] 41. Complainant 3 submitted source documents from the personal and business bank accounts that showed that several months after the billing dispute arose and Complainant 3 terminated the professional relationship with Respondent, Respondent had made repeated unauthorized withdrawals.[15] The unauthorized withdrawals resulted in significant overdrafts. 42. Mr. King testified that Respondent’s undisclosed increase in fees from what Ms. Benjamin had charged, unnecessary filing of the Form 3115, and unauthorized withdrawals from the client’s accounts to resolve a billing dispute were common themes in the complaints that all of Respondent’s clients had filed against her. 43. On November 17, 2015, the Board sent a letter to Respondent to notify her of Complainant 3’s complaint and making the following request: Please review the enclosed complaint and allegations. You are hereby requested to respond, by submitting your written response to the allegations of the complaint, within thirty (30) days from the date of this latter. Please be advised that your failure to timely respond and/or submit the requested material may be considered a violation of A.A.C. R4-1-455.03(F), and grounds for disciplinary action against your certificate pursuant to A.R.S. § 32-741(A)(9) and (15). . . .[16]

Respondent did not file a written response to the Board’s November 17, 2015 letter. File No. 2016.043 44. The Board received a complaint on November 2, 2015, from Complainant 4, who engaged Respondent for accounting services for a family-run agricultural business. Complainant 4 alleged that Respondent made two unauthorized charges to the company credit card in the amounts of $1,500.00 and $1,900.00. Complainant 4 also alleged that Respondent attempted to cash three checks in the amounts of $1,500.00, $490.00, and $3,500.00, which had been previously cashed by Respondent. Complainant 4 also alleged that Respondent engaged in excessive billing and overly aggressive collection practices and made an unauthorized disclosure of confidential client information on the internet.[17] 45. Mr. King testified that after Complainant 4 was able to reverse Respondent’s unauthorized charges, Respondent successfully charged the credit card again and, after Complainant 4 again reversed the unauthorized charges, Respondent resubmitted three checks that she had previously cashed to obtain more money from Complainant 4’s bank account.[18] The bank eventually reversed the charge. 46. Mr. King testified that cashing previously cashed client checks is a higher level of discreditable act than even a CPA making unauthorized withdrawals from or charges to client’s accounts and evidences a complete lack of integrity. Mr. King testified that CPAs are held to a high standard of public trust. Mr. King testified that no reasonable CPA could think that cashing previously cashed checks a second time to satisfy a disputed bill was reasonable conduct. 47. Complainant 4 submitted an exchange on the website www.yelp.com in which a negative review of Respondent and Respondent Firm was posted that did not identify Complainant 4 or the business. Respondent posted a response to the post that identified Complainant 4 and the business by name, stating that Complainant 4 “still has an outstanding balance with my firm of over $4500 and refused to abide by the contract signed at the beginning of the engagement.”[19] 48. Mr. King testified that mentioning a client by name is not a per se violation, for example, a CPA’s casual mention at a social affair that she knew Dr. X as a client. Mr. King testified that a CPA has a duty not to violate confidentiality if the client could be harmed by the disclosure. Mr. King testified that because Respondent’s statement that Complainant 4 failed to pay bills and still owed money could affect the client’s credit, it was a violation. 49. Complainant 4 stated that on August 11, 2015, Respondent was informed that all work on the file needed to cease.[20] Mr. King testified that upon receiving such a communication, a CPA should stop working for the client and send a written communication severing the relationship. By continuing to work on the file, Respondent violated applicable CPA standards. 50. On November 18, 2015, the Board sent Respondent the same form letter quoted above in Finding of Fact No. 47 regarding Complainant 4’s complaint in File No. 2016.043.[21] Respondent did not file a written response to the Board’s November 18, 2015 letter. File No. 2016.075 51. The Board received a complaint on January 6, 2016, from Complainant 5, who was another former client of Ms. Benjamin’s and had engaged Respondent the prior year for preparing personal and trust tax returns. Complainant 5 alleged that Respondent had made an unauthorized withdrawal in the amount of $750.00 on December 21, 2015, for a retainer for 2015 tax return preparation, despite Complainant 5 having no intention of using Respondent’s services. Complainant 5 alleged that Respondent withdrew the retainer from Complainant’s bank account using cancelled checks from prior payments. Complainant 5 also alleged that Respondent engaged in unprofessional conduct and charged excessive fees.[22] 52. Mr. King testified that Respondent used information from Complainant 5’s files to which she had access by virtue of her prior professional relationship with Complainant 5 and purchase of Ms. Benjamin’s business. Mr. King testified that at the time that Respondent made the unauthorized withdrawal, she did not have a client relationship with Complainant 5. 53. On January 4, 2016, the Board suspended respondent’s certified public accountant certificate after she failed to renew it. The Board’s Suspension Order ordered Respondent not to use the title or designation of “certified public accountant,” public accountant,” or the abbreviation “C.P.A.,” “CPA,” “P.A.,” or “PA.”[23] 54. On February 12, 2016, Respondent filed an email in response to Complainant 5’s complaint. Respondent stated that she sent clients engagement letters with debit/credit authorization forms and that if clients did not wish to retain Respondent and Respondent Firm, they needed to send written opt out requests.[24] Respondent also sent a letter to the Board dated February 8, 2016, with the letterhead, “Tiffany White CPA, PLC.”[25] 55. Mr. King testified that since Complainant 5 did not return the letter, Respondent used information that she obtained from Ms. Benjamin’s files to access Complainant 5’s bank account. Mr. King testified that usually, clients return signed authorizations to engage a CPA’s services and that for Respondent’s assumption Complainant 5 had engaged her services because she did not received a signed authorization was irresponsible. Respondent’s violation was exacerbated by her unauthorized withdrawals from Complainant 5’s accounts. Mr. King noted that Respondent did not deny making the unauthorized withdrawals. File No. 2016.076 56. The Board received a Complaint on January 15, 2016, from Complainant 6, who had engaged Respondent for tax preparation services for the 2014 tax year. Complainant 5 alleged that on December 31, 2015, Respondent made an unauthorized withdrawal in the amount of $750.00 from Complainant 6’s bank account for a retainer for 2015 tax preparation services. Complainant 6 did not intend to engage Respondent for any further services.[26] 57. Mr. King testified that Complainant 6 alleged the same violations as Complainant 5. Complainant 6 submitted bank account statements that showed Respondent’s unauthorized withdrawal of $750.00 for her retainer.[27] Complainant 6 also submitted a letter from the financial crimes manager at the bank at which the unauthorized withdrawal was made, stating that “[t]he investigation has been completed and we have determined that the transaction(s) in question was not authorized by you.”[28] Mr. King testified that the bank’s determination was significant and that Respondent had engaged in highly discreditable conduct by making the unauthorized withdrawal. 58. On January 19, 2016, the Board sent Respondent the same form letter quoted above in Finding of Fact No. 47 regarding Complainant 6’s complaint in File No. 2016.076.[29] Respondent did not file a written response to the Board’s November 18, 2015 letter. File No. 2016.077 59. The Board received a complaint on January 14, 2016, from Complainant 7, who had engaged Respondent for tax preparation services for the 2014 tax year. Complainant 7 alleged that on January 11, 2016, Respondent made an unauthorized withdrawal in the amount of $750.00 from Complainant 7’s bank account for a retainer for 2015 tax preparation services. Complainant 7 did not intend to engage Respondent for any further services. Complainant 7 further alleged that Respondent had been paid on all prior occasions using credit cards and must have obtained Complainant 7’s bank information from prior client records from Respondent’s purchase of Ms. Benjamin’s CPA business.[30] 60. Mr. King noted that Respondent’s unauthorized withdrawal from Complainant 7’s bank account resulted in an overdraft, which is a risk Respondent must have known she created by taking money from a bank account without notice. Mr. King noted that Complainant 7 vehemently denied ever giving Respondent authorization to access the bank account. Mr. King testified that Respondent’s actions violated the client’s privacy and trust. 61. Mr. King noted that Respondent’s form engagement letters instructed prospective clients in several places to sign and return the letter if they agreed to her terms.[31] Yet, although Complainant 5, Complainant 6, and Complainant 7 never signed or returned the letter, Respondent accessed their bank and credit accounts to pay a retainer for prospective services that they did not want. 62. Mr. King read into the record AICPA standards Articles 1, 2 and 3. He testified that Respondent violated all three, especially Article 3 which requires CPAs to act with integrity, honesty, and candor. Compliance is measured by what is right and just. Mr. King testified that Respondent had repeatedly violated applicable regulations, standards, and statutes, had stolen people’s money, and that the police, FBI, and the Attorney General’s office had opened investigations. Respondent’s behavior was among the most troubling that he had ever seen in 20 years. CONCLUSIONS OF LAW The Notice of Public Hearing and Complaint that the Board mailed to Respondent at her addresses of record was reasonable and she is deemed to have received notice of the hearing.[32] The Board has personal and subject matter jurisdiction over Respondent and Respondent Firm pursuant to A.R.S. §§ 32-701 et seq. and A.A.C. R4-1-101 et seq. The Board has the authority to discipline Respondent and Respondent Firm pursuant to A.R.S. § 32-741. The Board bears the burden of proof to establish cause to discipline Respondent’s certified public accountant certificate and Respondent Firm’s certified public accounting firm registration by a preponderance of the evidence.[33] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[34] A preponderance of the evidence is “evidence which is of greater weight or more convincing than evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.”[35] Respondent is deemed to have knowledge of the Board’s rules.[36] The Board established that Respondent committed “[d]ishonesty, fraud or gross or continuing negligence in the practice of accounting” on numerous occasions by making unauthorized withdrawals from client bank accounts, thereby furnishing cause to discipline her certified public accountant certificate under A.R.S. § 32-741(A)(4). The Board established that Respondent committed numerous “[v]iolation[s] of any decision, order or rule issued or adopted by the board,” thereby furnishing cause to discipline her certified public accountant certificate under A.R.S. § 32-741(A)(9), as set forth in detail in Conclusion of Law Nos. 8 – 13 below. The Board established that Respondent failed to exercise due diligence in her tax practice when she made unauthorized charges to at least seven clients’ bank accounts and performed unnecessary services by preparing Forms 3115 for all business clients, even when the form was not required, in violation of A.A.C. R4-1-455.01(G).[37] The Board established that Respondent engaged in numerous discreditable acts in her billing and collection practices, in violation of A.A.C. R4-1- 455.03(A).[38] The Board established that Respondent failed to timely return client records after at least two clients demanded that she return the records, in violation of A.A.C. R4-1-455.02(B).[39] The Board established that Respondent disclosed Complainant 4’s confidential information obtained in the course of her professional engagement without the former client’s consent, in violation of A.A.C. R4-1- 455.02(A)[40] and A.R.S. § 32-749(A).[41] The Board established that Respondent failed to respond to at least three of the Board’s inquiries about consumer complaints, in violation of A.A.C. R4-1-455.03(F)[42] and A.R.S. § 32-741(A)(15).[43] The Board established that Respondent continued to use the C.P.A. designation after her certified public accountant certificate had been suspended, in violation of A.R.S. § 32-741.02(B).[44] Respondent’s repeated dishonesty or fraud and failures to exercise due diligence in her accountancy practice, discreditable acts in her billing and collection practices, failures to timely return client records, disclosure of confidential client information, failures to respond to the Board’s inquiries, and continued use of the CPA designation after her license was suspended provide cause for the Board to penalize her certified public accountant certificate.[45] The egregiousness of Respondent’s misconduct, failures to respond to the Board’s inquiries about consumer complaints, and failure to appear at the duly noticed public hearing to defend her certified public accountant certificate demonstrate that, at this time, she cannot be regulated. Because Respondent is the sole owner and sole CPA member of Respondent Firm, if Respondent’s certified public accountant certificate is revoked, the Board must revoke Respondent Firm’s registration pursuant to A.R.S. § 32-742(B).[46] RECOMMENDED ORDER Based on the foregoing, it is ordered that on the effective date of the final order in this matter, Certified Public Accountant Certificate No. 11790-E previously issued to Respondent Tiffany White shall be revoked. It is further ordered that on the effective date of the final order, Certified Public Accounting Firm Registration No. 2891-L previously issued to Respondent Firm Tiffany White, CPA, PLC shall be revoked. It is further ordered that on the effective date of the final order, Respondent and Respondent Firm shall jointly and severally be required to pay an administrative penalty in the amount of $10,000.00 pursuant to A.R.S. § 32-701(10).[47] It is further ordered that on the effective date of the final order, Respondent and Respondent Firm shall jointly and severally be required to pay the Board’s costs and attorney’s fees incurred in prosecuting the seven consumer complaints in this matter pursuant to A.R.S. § 32-701(10)(g).[48] It is further ordered that on the effective date of the final order, Respondent and Respondent Firm shall jointly and severally be required to pay restitution to any of the seven complainants who have incurred an economic loss as a result of Respondent’s numerous violations of statutes, regulations, and/or professional standards pursuant to A.R.S. § 32- 701(10)(h).[49] In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be five days from the date of that certification. Done this day, August 9, 2016.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Monica L. Petersen, Executive Director Arizona State Board of Accountancy ----------------------- [1] See the Board’s Exhibit 1. [2] See the Board’s Exhibit 2 (after invoices). [3] See id. (next document)> [4] The Board’s Exhibit 3 at 47. [5] See the Board’s Exhibit 6. [6] See the Board’s Exhibit 4. [7] See the Board’s Exhibit 5 at 22, ll. 10-24. [8] See the Board’s Exhibit 5 at 37, ll. 10-22. [9] The Board’s Exhibit 14 at 1. [10] See the Board’s Exhibit 12. [11] See the Board’s Exhibit 16. [12] See the Board’s Exhibit 17. [13] See the Board’s Exhibit 18. [14] See id. at 48. [15] See id. at 37 - 40. [16] The Board’s Exhibit 19. [17] See the Board’s Exhibits 20 – 22. [18] See the Board’s Exhibit 21. [19] The Board’s Exhibit 22. [20] See the Board’s Exhibit 20 at 3. [21] See the Board’s Exhibit 23. [22] See the Board’s Exhibit 24. [23] See the Board’s Exhibit 30. [24] See the Board’s Exhibit 25 at 2 - 3. [25] See the Board’s Exhibit 25 at 2. [26] See the Board’s Exhibit 26. [27] See the Board’s Exhibit 26 at 4. [28] See id. at 10. [29] See the Board’s Exhibit 27. [30] See the Board’s Exhibit 28. [31] See, e.g. Exhibit 2 to the Board’s Exhibit 1. [32] See A.R.S. § 41-1092.04. [33] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [34] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [35] Black’s Law Dictionary at page 1064 (6th ed. 1990). [36] See A.A.C. R4-1-102(A). [37] A.A.C. R1-4-455.01(G) provides as follows: A certified public accountant, public accountant, or firm shall exercise due diligence in the conduct of tax practices. The Board shall view the current standards in the American Institute of Certified Public Accountants Statements on Responsibilities in Tax Practice to presumptively represent due diligence. [38] A.A.C. R4-1-455.03(A) provides in relevant part as follows: A certified public accountant, public accountant, or firm shall not commit an act that reflects adversely on the certified public accountant's, public accountant's, or firm’s fitness to engage in the practice of public accounting, including: 1. Violating a provision of R4-1-455, R4-1-455.01, R4-1-455.02, R4-1-455.03 or R4-1-455.04; 2. Violating a fiduciary duty or trust relationship with respect to any person; or 3. Violating a provision of A.R.S. Title 32, Chapter 6, Article 3, or this Chapter. [39] A.A.C. R4-1-455.02(B) provides as follows: Records disposition responsibility: A certified public accountant, public accountant, or firm shall furnish to a client, or former client, upon request, within a reasonable time after original issuance: 1. A copy of any tax returns prepared for the client; 2. A copy of any reports, or other documents, that were previously issued to the client; and 3. Any accounting or other records belonging to the client that the certified public accountant, public accountant, or firm may have removed from the client’s premises, or received for the client’s account. The certified public accountant, public accountant, or firm may make a copy of the documents if the documents form the basis for work done by the certified public accountant, public accountant, or firm. [40] A.A.C. R4-1-455.02(A) provides in relevant part as follows: Confidential client information: A certified public accountant, public accountant, or firm shall not disclose confidential information obtained in the course of a professional engagement except with the consent of the client. . . . [41] A.R.S. § 32-749(A) provides in relevant part as follows: Certified public accountants and public accountants practicing in this state shall not be required to divulge, nor shall they voluntarily divulge, client records or information which they have received by reason of the confidential nature of their employment. Information derived from or as a result of such professional source shall be kept confidential as provided in this section . . . . [42] A.A.C. R4-1-455.03(F) provides that “[w]hen requested, certified public accountants or public accountants shall respond to communications from the Board within 30 days of the mailing of such communications by registered or certified mail.” [43] A.R.S. § 32-741(A)(15) includes among the grounds for the Board to suspend or revoke a certified public accountant certificate “[f]ailing to respond in writing or furnish information in a timely manner to the board or its designated agent, if the information is legally requested by the board and is in the registrant's possession or control. [44] A.R.S. § 32-741.02(B) provides that “[a] registrant whose certificate is suspended shall not assume or use the title or designation of "certified public accountant" or "public accountant" or the abbreviation ‘C.P.A.’, ‘CPA’, ‘P.A.’ or ‘PA’ while the registrant's certificate remains on suspended status. [45] See A.R.S. § 32-741(A)(9) and (15) and (D). [46] A.R.S. § 32-742(B) provides as follows: After notice and an opportunity for a hearing, the board may revoke or suspend a firm's registration to practice public accounting or may take disciplinary action concerning the registrant for any of the causes enumerated in section 32-741, subsection A or for any of the following additional causes: 1. The revocation or suspension of any certificate issued by the board of any partner, shareholder, member, manager, officer, director, agent or employee of the firm. 2. The cancellation, revocation, suspension or refusal to renew the authority of the firm or any Arizona partner, shareholder, member, manager, officer, director, agent or employee to practice public accounting in any jurisdiction for any cause other than failure to pay a registration fee in the jurisdiction. 3. The failure to comply with section 32-731, subsection E. [47] A.R.S. § 32-701(10)(a) defines “disciplinary action” to include “[a]n administrative penalty in an amount not to exceed two thousand dollars for each violation of this chapter or rules adopted pursuant to this chapter.” [48] A.R.S. § 32-701(10)(g) defines “disciplinary action” to include “[r]eimbursement of the board's costs of investigations and proceedings initiated under this chapter, including attorney fees.” [49] A.R.S. § 32-701(10)(h) defines “disciplinary action” to include “[a] requirement for restitution payments to accounting services clients or to other persons suffering economic loss resulting from violations of this chapter or rules adopted pursuant to this chapter.”

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