ALJDEC decisions subject to certification as final

21A-2021.080-ACY · State Board of Accountancy · 2021-08-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of Public Accountant Certification No. 10619-E issued to:

Thomas W. Clark,

Respondent.

No. 21A-2021.080-ACY

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 17, 2021 at 9:00 AM.

APPEARANCES: Assistant Attorney General Scott Donald, Esq., appeared on behalf of the Arizona Board of Accountancy (“Board”) with Christopher Rasmussen, Assistant Director of Regulation and Compliance, as a witness. No appearances by or on behalf of Thomas Clark (“Respondent”).

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

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Having heard the evidence and testimony and having considered the record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following Recommended Order to the Executive Director of the Board.

FINDINGS OF FACT

Pursuant to Ariz. Admin. Code R4-1-114(A), Administrative Notice is taken of Respondent’s certification record as reflected on the Board’s public website. On February 10, 1998, Respondent was issued Certified Public Accountant (“CPA”) No. 10619-E by the Board. The license is currently active and due for renewal in August 2022. No prior disciplinary history is listed for Respondent’s license.

Respondent’s address of record with the Board is 12413 N 29th Pl. Phoenix, AZ 85032.

On October 16, 2020, the Board received a Consumer Complaint (2021.080) from one of Respondent’s clients (“Complainant”), that alleged, in pertinent parts, that Respondent failed to file 4th quarter 940 tax forms with the IRS and send W-2 tax forms to the Social Security Administration for two of her companies, and failed to provide notice of his failures to file. Complainant further alleged that as a result of said failures, Complainant incurred approximately $160,000.00 in fines from the government. In the complaint Complainant detailed that Respondent had served as her family’s CPA since 2003, but did not discover Respondent’s 2015 inaction until she was served with civil penalty notifications letters by the Social Security Administration in 2017. Per Complainant, the government denied her penalty abatement requests. Complainant opined that her total damages were incalculable due to the compounding interest on the government’s penalties, and also because other members of her family were facing similar tax issues as a direct result of Respondent’s conduct.

On October 22, 2020, the Board issued a Complaint Notification Letter to Respondent via certified mail regarding Complaint No. 2021.080. A response was due by November 23, 2020.

On November 25, 2020, the Board received the correspondence returned as undeliverable by the United States Postal Service (“USPS”).

On December 02, 2020, the Board emailed Respondent to provide notice of the Complaint Notification Letter and the fact that it was returned by USPS as undeliverable. The Board instructed Respondent to update his address of record. Respondent subsequently telephoned the Board to confirm that the address the Board had on file was correct.

Respondent did not timely respond.

On January 04, 2021, the Board telephoned Respondent to inquire about his missing response, to which Respondent assured he would have submitted by the end of that week. Respondent failed to comply.

On January 19, 2021, the Board resent the Complaint Notification Letter to Respondent via certified mail.

After being notified by USPS that their January 19, 2021, correspondence to Respondent had been “lost in transit,” the Board resent the Complaint Notification Letter to Respondent on March 02, 2021, via certified mail. . A response was due by April 01, 2021.

Respondent did not timely respond.

On April 01, 2021, and April 19, 2021, the Board received their last two letters of correspondence issued to Respondent returned as “Return to Sender – Not Deliverable as Addressed – Unable to Forward” and “Return to Sender – Unable to Forward” respectively, by USPS. The Board was able to confirm that the letters had bee returned after being held for the required number of days without being claimed by Respondent.

Per the Complaint and Notice of Hearing, the Board referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on August 17, 2021, to determine whether good cause exists to revoke, suspend or take any other disciplinary action against Respondent’s certification.

Respondent did not request an informal Settlement Conference in this matter.

At the hearing, the Board submitted Exhibit 1 and presented the testimony of Mr. Rasmussen. Although the start of the duly noticed hearing was briefly delayed allow Respondent additional travel time, Respondent did not appear, by or through an attorney or owner, and did not contact OAH to request that the start of the hearing be further delayed. No request to continue was submitted on Respondent’s behalf, nor was a request to appear telephonically. Consequently, Respondent did not present any evidence to defend his CPA Certification.

Respondent has never provided the Board with a written response to the Complaint Notification Letter.

Closing Arguments

In closing, the Board argued that revocation was appropriate as evidence established Respondent could not be regulated by the Board; as evidenced by the fact that Respondent never submitted a response to the Complaint Notification Letter and willfully refused to pick up correspondence mailed to his address of record.

CONCLUSIONS OF LAW

Pursuant to Ariz. Rev. Stat. §§ 32-701 et seq., the Board is the authority for regulating the practice of Certified Public Accountants in the State of Arizona. Pursuant to Ariz. Rev. Stat. §§ 32-701 et seq., and Ariz. Admin. Code R4-1-101 et seq., the Board has personal and subject matter jurisdiction over Respondent.

This matter was properly brought before the Office of Administrative Hearings pursuant to Ariz. Rev. Stat. §§ 41-1092 et seq.

The Notice of Hearing the Board mailed to Respondent’s address of record is sufficient, and Respondent is deemed to have received the Notice of Hearing in this matter. Because the Board mailed all correspondence to Respondent in the same manner and failed to receive any mail returned as undeliverable, Respondent is deemed to have received all correspondence regarding this matter from the Board as well.

Respondent is deemed to have knowledge of the Board’s rules.

Pursuant to Ariz. Rev. Stat. § 41-1092.07(G)(2), the Board has the burden of proof in this matter. Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard. The standard of proof is a preponderance of the evidence.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” A preponderance of the evidence is also, “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.”

Ariz. Admin. Code R4-1-455.03(D) provides, in pertinent part, that “When requested, a registrant shall file a written response to a communication from the Board within 30 days of the date of the mailing of such communication by certified mail.”

Pursuant to Ariz. Rev. Stat. § 32-741(A)(9), the Board may revoke or suspend a certificate for violation(s) of any decision, order, or rule issued or adopted by the Board.

Here, the material facts are not in dispute.

The Board established by a preponderance of the evidence that Respondent never responded to its Complaint Notification Letter of December 02, 2020, regarding Complaint No. 2021.080.

Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to respond to the Board’s Complaint Notification Letter in a timely manner. This is an affirmative defense that Respondent bears the burden to establish. Because Respondent failed to appear, the record is devoid of mitigation evidence to refute the Board’s credible evidence and excuse or justify inaction in this matter. Respondent is deemed to have acquiesced to the Board’s alleged violations.

Because the Board has established by a preponderance of the evidence that Respondent violated Ariz. Admin. Code R4-1-455.03(D) and Ariz. Rev. Stat. §§ 32-741(A)(9), the Board has also established grounds to take disciplinary action against Respondent’s certification.

RECOMMENDED ORDER

Based on the foregoing,

it is recommended that on the effective date of the Board’s Final Order, the Board revoke CPA Certification No. 10619-E issued to Thomas W. Clark.

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 17, 2021.

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Monica L. Petersen, Executive Director

Arizona State Board of Accountancy