FINACT19F-2019.211-ACY.pdf

19F-2019.211-ACY · State Board of Accountancy · 2019-09-24

BEFORE THE ARIZONA STATE BOARD OF ACCOUNTANCY In the Matter of OAH Docket No. 19F-2019.211-ACY

Certified Public Accountant ASBA File No. 2018.178

Certificate No. 17062-R DECISION AND ORDER Issued to: DENISE DODGE, Respondent. On September 23, 2019, this matter came before the Arizona State Board of Accountancy (“Board”) for consideration of Administrative Law Judge (“ALJ”) Kay A. Abramsohn’s proposed Findings of Fact, Conclusions of Law and Recommended Order (“ALJ’s Decision”). Denise Dodge (“Respondent”) appeared on behalf of herself.

Assistant Attorney General Scott Donald appeared on behalf of the State. The Board received independent legal advice from Assistant Attorney General Michael Raine. The Board, having considered the ALJ’s Decision and the entire record in this

matter, hereby issues the following Findings of Fact, Conclusions of Law and Order (“Decision and Order”). FINDINGS OF FACT The Findings of Fact as set forth in the ALJ’s Decision are adopted in their

entirety and incorporated herein. CONCLUSIONS OF LAW The Conclusions of Law as set forth in the ALJ’s Decision are adopted in their entirety and incorporated herein. // // 1 A true and correct copy of the ALJ’s Decision is attached and certain parts of it are incorporated here as set forth above. Staff notes that there is a typographical error in the ALJ’s Findings of Fact, Paragraph 12, wherein, Firm is spelled “Frim”. ORDER Based on the foregoing, the Board ORDERS that Respondent shall pay the Board an administrative penalty of $500.00 within thirty (30) days of the effective date of this Decision and Order. IT IS FURTHER ORDERED that Respondent shall be required to reimburse the Board $113.67 within thirty (30) days of the effective date of this Decision and Order. This amount reflects the costs and attorney’s fees the Board incurred in prosecuting this matter. 2 NOTICE OF APPEAL RIGHTS Respondent is hereby notified that she has the right to move for a rehearing or review by filing a motion with the Board’s Executive Director within thirty (30) days after service of this Decision and Order. A.R.S. § 41-1092.09. The motion must set forth legally sufficient reasons for granting a rehearing. A.A.C. R4-1-114(C). Service of this Decision and Order is effective on the date of personal service or five (5) days after the date of mailing. If a motion for rehearing is not filed, the Board’s Decision and Order becomes effective thirty (30) days after it is mailed to Respondent. Respondent is further notified that the filing of a motion for rehearing is required

to preserve any rights of appeal to the Superior Court. DATED this 24th day of September, 2019. ARIZONA STATE BOARD OF ACCOUNTANCY By: ___________________________________ William C. Heimerdinger, CPA, Board President The Board voted to modify the ALJ’s Decision to include a requirement that Respondent pay reimbursement of fees and costs the Board incurred, which is consistent with the Board’s practices. Original of the foregoing Decision and Order (and attachment) filed this 24 day of September, 2019 with: th

Monica L. Petersen Executive Director Arizona State Board of Accountancy 100 N. 15 Avenue, Suite 165 th

Phoenix, AZ 85007 Copy of the foregoing Decision and Order (and attachment) e-filed this 24 day of September, 2019 with: th

Greg Hanchett, Director Arizona Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, AZ 85007 Copy of the foregoing Decision and Order (and attachment) mailed via U.S. First Class Mail and Certified Mail #[account number redacted] 0356 this 24th day of September, 2019, to: Denise D. Dodge 16220 N. 7 St., #1254 th

Phoenix, AZ 85022 Copy of the foregoing Decision and Order (and attachment) emailed this 24th day of September, 2019 to: Scott Donald Assistant Attorney General [email redacted] Michael Raine Assistant Attorney General Independent Advisor [email redacted] By: ___________________________________ IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of No. 19F-2019.211-ACY Certified Public Accountant ADMINISTRATIVE LAW JUDGE Certificate No. 17062-R DECISION Issued to: DENISE DODGE, Respondent.

HEARING: August 21, 2019 APPEARANCES: Assistant Attorney General Scott Donald, Esq., appeared on behalf of the Arizona State Board of Accountancy, with Christopher Rasmussen as a witness. Denise Dodge appeared, representing herself. ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn. _____________________________________________________________________ Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order: FINDINGS OF FACT 1. The Arizona State Board of Accountancy (Board) is the state agency authorized to regulate the practice of Certified Public Accountants in the State of Arizona pursuant to A.R.S. §§ 32-701 et seq. 2. Denise Dodge (Respondent) is the holder of Certified Public Accountant (“CPA”) Certificate No. 17062-R issued by the Board. This certificate enables Respondent to practice as a Certified Public Accountant in Arizona.1 3. On January 22, 2015, Respondent filed articles of incorporation for “DD Dodge, CPA, PLLC” (Firm), with the Arizona Corporation Commission (ACC). 4. On March 3, 2015, the Board approved the Firm’s application for registration in

Arizona.

5. When the Board did not receive a timely renewal for Firm, the Board placed Firm

on suspended status on April 1, 2017.2 On April 3, 2017, the Board’s

Suspension Order was mailed to Firm.3 The Suspension Order indicates that if

See A.R.S. § 32-725. 2 See A.R.S. § 32-730(A) and A.A.C. R4-1-345. See Exhibit 2. Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 the Firm fails to renew its registration within twelve months of the suspension, the Firm’s registration status would expire. Respondent did not receive the Suspension Order at that time.

6. While the Suspension Order states that the address used was the Firm address

of record, at hearing, Respondent indicated that the address on Bluefield was

her home address, while the Firm was on Helm. Firm’s 2015 incorporation

paperwork confirms the Firm was initially located on Helm.4 At hearing,

Respondent also indicated that, at one point, she had changed the Firm address

to her home but later moved the Firm to 7th Street.5

7. When the suspension status was not cured, Firm‘s registration expired on April

1, 2018.

8. At some point, Respondent received information regarding the Firm suspension

and/or expiration.

9. On April 5, 2018, Respondent went the Board offices intending to renew Firm’s

registration.6 However, Respondent was informed that due to the expiration (on

April 1, 2018), Firm could not simply renew and that an application for

reinstatement would need to be approved by the Board at its next meeting on May 14, 2018. 10. The dilemma for Respondent at that time was that she had several tax returns that needed to be completed. Respondent believed it was best to act in the interests of her clients and Respondent subsequently completed those several tax returns, executing the preparer signature as Firm, using the electronic filing identification number (E-fin) for the Firm. Respondent knew that her own CPA certification had not been suspended, had not expired, and that she remained in active status until May 31, 2018.

See Exhibit 3. The dates of such moves and any specific notices to the Board of address changes was not specified during the hearing. The Tribunal cannot determine whether the Suspension Order was mailed to the correct address. 6 See Exhibit 1. 11. On May 3, 2018, the Board inquired whether Firm was operating and using the CPA designation because, based on Board records, Firm had expired.7 The Board mailed this letter to Firm at Bluefield and at 7th Street. The Board

requested a written response and information or documents relevant to the

situation.

12. By letter dated June 28, 2018, Respondent provided her written statement

regarding her and Firm’s activities and actions.8 Respondent indicated that she

had filed Articles of Termination for Firm, that her online presence for Frim had

been closed, and that she had destroyed Firm business cards and letterhead

“several months back.” Respondent further indicated that she had been

struggling with health since summer of 2016 and had subsequent financial

difficulties when she was unable to work.

13. This matter was not resolved informally through an offered consent agreement.

14. On July 16, 2019, the Board issued its Complaint and Notice of Hearing

(Complaint) to Respondent, proposing to revoke Respondent’s CPA Certificate,

setting an administrative hearing, and providing opportunity for an appeal and an

informal conference.9 15. Respondent filed an Answer on August 6, 2019, admitting to operating the Firm, in completing tax returns, after she discovered that the Board had taken action to suspend Firm’s registration and the Firm registration had expired. Respondent indicated that had she known of the suspension, she would have taken care of it right away. In her Answer, Respondent requested that the Firm Certificate be cancelled, indicating that she does not want Firm to be reinstated and that she now operates as a sole proprietor.

7 See Exhibit 3. The Board’s file number referenced thereon was File No. 2018.179. See Exhibit 4. Based on Respondent’s response, the Board also inquired about Respondent’s CPA activities in Board File No. 2018.178. When the matter was forwarded to the Tribunal, the Board set the matter as Docket No. 19F-2019.211- ACY. However, the Board noticed the hearing as Docket No. 19F-2019.211-ACY with Board File No. 2018.178. At hearing, the Tribunal specified that the Tribunal Docket No. would remain as originally set, as 19F-2019.211-ACY, rather than attempting to coordinate with the numbering of the Board’s file after the fact. 16. At hearing, Respondent took responsibility for her actions, acknowledging that she had completed the tax returns. She also noted, in her defense, that she had not performed any audits, financial reviews, or attestation engagements (i.e., the

financial services restricted to CPAs) between April 1, 2018 and April 15, 2018.10

17. The Board’s position is that the circumstances demonstrate cause, pursuant to

A.R.S. § 32-741(A)(6) [violation of any applicable provision] and A.R.S. § 32-

731(A) [regarding registration and payment of a registration fee every two years]

to discipline Respondent’ certificate. While the Board indicated that

Respondent’s circumstances might go to mitigation of a sanction, the Board

proposed that a $2,000.00 civil penalty be imposed.11

18. Respondent’s position is that the proposed penalty is excessive as she only

“knowingly” operated Firm in violation of the Firm expiration from April 5, 2018 to

April 15, 2018 in order to complete some tax returns.

CONCLUSIONS OF LAW

1. The Board has jurisdiction over Respondent and the subject matter in this case, pursuant to A.R.S. § 32-701 et seq. and A.A.C. R4-1-101 et seq. The Board’s authority to discipline Respondent is found at A.R.S. §§ 32-741(A) and 32- 701(10). Because the Board has been given statutory discretion in regard to suspension, revocation, or taking other disciplinary action, Respondent’s circumstances should be considered in the administrative process. 2. Pursuant to A.R.S. § 41-1092.07(G) (2) and A.A.C. R2-19-119(B), the Board has the burden of proof in this matter. The standard of proof is by a preponderance of the evidence. A.A.C. R2-19-119(A). 3. Pursuant to A.A.C. R4-1-102(A), Respondent is deemed to have knowledge of the Board’s rules.

Although she did not cite to this provision, the Tribunal presumes that Respondent was referencing A.R.S. § 32-701(A)(16). The Board did not dispute Respondent’s statements in this regard. The Board has authority to impose a penalty for each act in violation and, thus, could have proposed up to $2,000 penalty for each tax return completed during April 1, 2018 to April 15, 2018. See A.R.S. § 32-701(A)(6). At hearing, Respondent did not recall the exact number of returns she had completed, but she offered to provide that information; the Board did not being forward any such information. 4. The continued operation of Firm in violation of registration requirements does constitute cause, under A.R.S. § 32-741(A)(6), for the Board, in its discretion, to revoke or suspend and/or take disciplinary action against Respondent’s CPA

certification. The Board proposes a civil penalty in the amount of $2,000.00.

5. The Administrative Law Judge concludes that a lesser civil penalty is warranted

based on the specific circumstances in this case, and recommends a civil

penalty in the amount of $500.00. This amount is calculated based on what

would have been the Firm registration fee, a late registration fee, and a minimal

penalty amount.

RECOMMENDED ORDER

Based upon the foregoing,

IT IS RECOMMENDED that within thirty (30) days of the effective date of the

Commissioner’s Final Order entered in this matter, regarding discipline determined appropriate in this matter, Respondent shall pay to the Department a civil penalty in the amount of $500.00, and such payment shall be made by cashier’s check or money order made payable to the Board. IT IS FURTHER RECOMMENDED in the event that Respondent fails to pay the $500.00 penalty, the Board take action to impose further discipline on Respondent’s CPA Certificate No. 17062-R upon proper notice to Respondent. 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 shall be five days from the date of the certification. Done this day, September 11, 2019.

/s/ Kay Abramsohn Administrative Law Judge

Transmitted electronically to:

Monica L. Petersen, Executive Director Arizona State Board of Accountancy