{
  "id": 1869800,
  "name": "Theodore JONES v. Charles D. RAGLAND and the ARKANSAS DEPARTMENT OF FINANCE AND ADMINISTRATION",
  "name_abbreviation": "Jones v. Ragland",
  "decision_date": "1987-10-19",
  "docket_number": "87-75",
  "first_page": "320",
  "last_page": "328",
  "citations": [
    {
      "type": "official",
      "cite": "293 Ark. 320"
    },
    {
      "type": "parallel",
      "cite": "737 S.W.2d 641"
    }
  ],
  "court": {
    "name_abbreviation": "Ark.",
    "id": 8808,
    "name": "Arkansas Supreme Court"
  },
  "jurisdiction": {
    "id": 34,
    "name_long": "Arkansas",
    "name": "Ark."
  },
  "cites_to": [
    {
      "cite": "266 Ark. 683",
      "category": "reporters:state",
      "reporter": "Ark.",
      "case_ids": [
        8721938
      ],
      "weight": 2,
      "year": 1979,
      "opinion_index": 0,
      "case_paths": [
        "/ark/266/0683-01"
      ]
    },
    {
      "cite": "289 Ark. 343",
      "category": "reporters:state",
      "reporter": "Ark.",
      "case_ids": [
        1875375
      ],
      "weight": 2,
      "year": 1986,
      "opinion_index": 0,
      "case_paths": [
        "/ark/289/0343-01"
      ]
    },
    {
      "cite": "545 S.W.2d 606",
      "category": "reporters:state_regional",
      "reporter": "S.W.2d",
      "case_ids": [
        1616825,
        1616690,
        1678846
      ],
      "year": 1977,
      "opinion_index": 0,
      "case_paths": [
        "/ark/260/0857-01",
        "/ark/260/0785-01",
        "/ark/261/0026-01"
      ]
    },
    {
      "cite": "260 Ark. 857",
      "category": "reporters:state",
      "reporter": "Ark.",
      "case_ids": [
        1616825
      ],
      "year": 1977,
      "opinion_index": 0,
      "case_paths": [
        "/ark/260/0857-01"
      ]
    },
    {
      "cite": "289 Ark. 152",
      "category": "reporters:state",
      "reporter": "Ark.",
      "case_ids": [
        1875399
      ],
      "weight": 2,
      "year": 1986,
      "opinion_index": 0,
      "case_paths": [
        "/ark/289/0152-01"
      ]
    },
    {
      "cite": "286 Ark. 33",
      "category": "reporters:state",
      "reporter": "Ark.",
      "case_ids": [
        8717290
      ],
      "weight": 2,
      "year": 1985,
      "opinion_index": 0,
      "case_paths": [
        "/ark/286/0033-01"
      ]
    },
    {
      "cite": "285 Ark. 182",
      "category": "reporters:state",
      "reporter": "Ark.",
      "case_ids": [
        1877634
      ],
      "weight": 2,
      "year": 1985,
      "opinion_index": 1,
      "case_paths": [
        "/ark/285/0182-01"
      ]
    },
    {
      "cite": "286 Ark. 33",
      "category": "reporters:state",
      "reporter": "Ark.",
      "case_ids": [
        8717290
      ],
      "weight": 2,
      "year": 1985,
      "opinion_index": 1,
      "case_paths": [
        "/ark/286/0033-01"
      ]
    }
  ],
  "analysis": {
    "cardinality": 927,
    "char_count": 18598,
    "ocr_confidence": 0.888,
    "pagerank": {
      "raw": 1.732917549643326e-07,
      "percentile": 0.705789410888434
    },
    "sha256": "4d25ef85931c3c9819194feaa44c4a1ab4697d018a45a2ab7c8289baf92ec4d7",
    "simhash": "1:a23658d2ac09827a",
    "word_count": 3108
  },
  "last_updated": "2023-07-14T18:33:58.592079+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
  },
  "casebody": {
    "judges": [
      "Hickman and Purtle, JJ., concur in part and dissent in part.",
      "Hickman, J., joins in this opinion."
    ],
    "parties": [
      "Theodore JONES v. Charles D. RAGLAND and the ARKANSAS DEPARTMENT OF FINANCE AND ADMINISTRATION"
    ],
    "opinions": [
      {
        "text": "Jack Holt, Jr., Chief Justice.\nBecause the appellant, Theodore Jones, failed to report and pay certain state taxes, he received an estimated tax assessment pursuant to an audit by the appellee, Department of Finance and Administration, hereafter called the Department. Jones appealed the assessment through administrative channels and then to chancery court where the chancellor found the final assessments proper. We affirm.\nJones operates A-l Auto Salvage. He stopped reporting and paying state income tax in 1976, however, he continued to report and pay state sales taxes through 1981. When the Department attempted to conduct an audit, Jones refused to surrender his records. As a result, the Department filed suit in chancery court for production of the records and the chancellor ordered Jones to deliver. When he refused, Jones was held in contempt and placed in jail.\nThereafter, the Department assessed taxes against Jones in an estimated amount of approximately $143,000.00. Jones did not protest the assessments which resulted in the filing of certificates of indebtedness, the issuing of writs of execution, and the seizing of Jones\u2019 property for sale. Prior to the sale, Jones entered an agreement with the Department to produce his records and dismiss the several suits he had pending against the Department. In exchange, the Department agreed to return his property and assess the taxes at the statutory rate instead of by estimates.\nThe Department received Jones\u2019 records and found them to be inadequate and incomplete. The Department estimated assessments of sales, income and withholding taxes in the amount of $16,177.07. Jones protested the assessments and an administrative hearing was held at which time the withholding tax assessments were dismissed because Jones had no employees. The sales and income tax assessments in the amount of $11,490.56 were upheld and Jones appealed to chancery court.\nJones returned his sales tax permit, but continued to operate his business. The Department counterclaimed to enjoin Jones from operating his business without a permit. After a lengthy trial, the chancellor affirmed the assessments and enjoined Jones from operating his business. Jones brings this appeal from that decision raising several points for reversal.\nThe first point Jones raises is the chancellor was wrong in finding the estimated taxes were reasonably assessed. Jones argues there was no cause for the Department to estimate his taxes since he had produced his records. We disagree. Ark. Stat. Ann. \u00a7 84-1907 (Repl. 1980) requires the taxpayer to keep suitable records for tax purposes. If a taxpayer fails to keep suitable records, the Commissioner of Revenues may make an estimated assessment based on the available information. Ark. Stat. Ann. \u00a7 84-4711(d) (Repl. 1980).\nJones\u2019 records were not suitable to determine the amount of taxes due. He admitted he did not keep records of sales for resale and barters and he paid sales tax only on money transactions, not barter transactions. One-half the pages in his ticket books were missing and he could only account for a few of the missing pages. As to the income tax assessment, Jones testified that he lived in poverty after his wife retired. When Mrs. Jones testified, she refused to divulge her social security number and her former employer.\nIn making its assessment, the Department determined Jones\u2019 records did not accurately reflect his business in several ways: 1) one-half the pages in the ticket books were missing; 2) no records were kept to document sales for resales as required by Ark. Stat. Ann. \u00a7 84-1907; 3) no records of barter transactions, which are taxable sales, were kept. Ark. Stat. Ann. \u00a7 84-1902(c) (Repl. 1980); 4) some duplicate tickets reflected different transactions from the original tickets; 5) Jones\u2019 ownership of valuable real estate; 6) questionable that Jones could live on $1600 annually; 7) a new building on Jones\u2019 property; 8) no evidence that Jones\u2019 wife had any income; 9) Jones ran a cash business; 10) information that Jones had made unreported sales to a Tennennbaum Co.; 11) a $35,000 bank account; and 12) an AP&L meter on Jones\u2019 property which was assigned to another business. Even though the Department conceded some of these enumerated reasons for estimating the taxes were without merit, when taken as a whole, it cannot be said that the chancellor\u2019s finding, that Jones failed to keep adequate records causing the state to estimate his tax assessments is erroneous. We will not reverse the chancellor unless his findings are clearly erroneous. ARCP Rule 52(a).\nJones claims the Department\u2019s methods for computing the estimated tax assessments were unreasonable. The Department based the sales tax assessment on the monthly gross sales figure of $2400. The Department reached this figure by determining the taxable sales shown in the ticket books which was $800. Another $800 was added for sales for resales which were wrongfully claimed as exempt. Since one-half of the ticket book pages were missing, another $800 was added to cover any unreported sales.\nThe income tax assessment was based on U.S. Department of Labor statistics since Jones\u2019 records were insufficient. The records showed he earned only $1600 annually for a 25 year period and the Department was skeptical that Jones could live on that amount. Since one-half the sales and all the barter transactions were not recorded, the Department concludes Jones\u2019 income was more than the amount shown in his records. Also, Jones testified stripped cars could be sold for $15-20 each. While utilizing these facts, coupled with an estimate of Jones\u2019 cost of living expenses and Labor Department statistics, Jones\u2019 annual income was estimated at $14,820.\nJones has the burden to refute the reasonableness of the estimated assessments. Ark. Stat. Ann. \u00a7 84-4711 (d). He has failed in this regard, except for the assessment on monthly gross sales of $2,400.00. We cannot find any support in the record for the $800.00 added to gross sales based on sales for resale. To the contrary, the state\u2019s only explanation is that \u201cWell, again we just sort of estimated and used the Eight Hundred Dollar figure, which made the total then Twenty-Four Hundred Dollars per month.\u201d Since this assessment was clearly arbitrary, we reverse the chancellor\u2019s findings to. $ 1,600.00. We find no other error as to the findings for the other estimated assessments.\nJones claims the tax audit should have been limited to three years instead of six years. Ark. Stat. Ann. \u00a7 84-4715(a) (Repl. 1980) provides a three year statute of limitations on audits. Act 401 of 1979 created an exception to this section permitting an audit to extend back six years if the taxpayer understates his taxes by twenty-five percent or more. Ark. Stat. Ann. \u00a7 84-4715(e) (Repl. 1980). This act became effective January 1, 1980. Jones argues since part of his taxes became due prior to the adoption of Act 401, the three year statute of limitations should apply because Act 401 cannot be applied retroactively. Ragland v. Travenol Laboratories, Inc., 286 Ark. 33, 689 S.W.2d 349 (1985) . This argument was not raised at trial and we will not consider arguments raising a statute of limitations for the first time on appeal. Hooper v. Ragar, 289 Ark. 152, 711 S.W.2d 148 (1986) .\nJones further argues the chancellor erred in quashing the subpoenas of five witnesses because this action violated his constitutional rights. We will not review this argument, because Jones failed to cite any authority to support the argument. Dixon v. State, 260 Ark. 857, 545 S.W.2d 606 (1977).\nJones also contends the chancellor was wrong in finding the Department complied with the agreement with him, and for his argument, attempts to incorporate by reference a brief presented to the lower court which was not abstracted. Since this is improper, we do not reach this issue. Ark. Sup. Ct. R. 9; Zini v. Perciful, 289 Ark. 343, 711 S.W.2d 477 (1986).\nJones lastly argues he was denied his right to the assistance of counsel of his choice. Jones wanted a non-lawyer to sit at his table and assist him during the trial and the chancellor would not allow, it. Only licensed attorneys can represent another person in court. Undem v. State Board of Law Examiners, 266 Ark. 683, 587 S.W.2d 563 (1979).\nInasmuch as we have reversed the chancellor\u2019s findings by reducing the assessments on monthly gross sales from $2,400.00 to $1,600.00, it is necessary that this case be remanded for a recalculation of the assessment on gross sales tax. We hereby remand with orders to the chancellor to enter a judgment consistent with this opinion. In all other particulars, we affirm.\nHickman and Purtle, JJ., concur in part and dissent in part.",
        "type": "majority",
        "author": "Jack Holt, Jr., Chief Justice."
      },
      {
        "text": "John I. Purtle, Justice,\nconcurring in part and dissenting in part. I agree with the majority opinion to the extent that it finds no basis in the record for assessing sales tax on the \u201csales for resale.\u201d I also agree with that part of the opinion holding that the appellant owes sales tax for three years based on the receipts which he furnished the department. However, I do not agree with extending the three year statute of limitations or in upholding the arbitrary income tax assessment.\nThis is a clear case of overreaching on the part of the tax collectors. The conduct of the appellant in this case should be considered in light of his perception that the efforts of the Department of Finance and Administration to conduct an audit of his taxes began as a direct result of Jones\u2019 participation in litigation against the Arkansas Attorney General, which successfully challenged the Attorney General\u2019s position in the Arkansas National Guard.\nThe record in this case reveals that Jones, pursuant to the agreement between himself and the Department, brought in his sales receipts for several years and he included a summary of each year\u2019s receipts on a sheet attached to the outside of these records. It is quite clear that the tax collectors only looked at one bundle for one year and out of it they based their assessment on only a small sample of these. They found his cover sheets to be accurate on the selected samples they examined. The original assessment was levied partially upon the fact that they found a $35,000 savings account in the name of Jones. Subsequently, it developed that it was not even the same Jones. Therefore, they graciously dropped this item as a basis for the estimated assessments.\nDuring one of the hearings one of the tax collectors informed the appellant that all the department had to do was make one telephone call and the property would be subject to levy again. The Department of Finance and Administration employee stated: \u201cThat writ of execution can be issued again by a phone call which I can make from that office in there. I mean we are back where we were to start.\u201d What could be more threatening? Power is a heady thing and must of necessity be subject to review. Appellant, acting as his own counsel spoke about his records during the hearing in the Revenue Department, when he stated: \u201cThis is all my books and records for the year 1977. It\u2019s never been open. These papers have never been audited yet they say that they have been audited. They agreed to audit my papers.\u201d The response from the state\u2019s attorney: \u201cWe believe there was no need to go through everyone of those for that same purpose, so we used a sample.. . . We agreed to do an audit and we did an audit based on the sample. We didn\u2019t agree to examine each and every invoice, as we regularly do not examine each and every invoice on any audit that we do except in very rare circumstances.\u201d\nThe state had seized his property and the appellant had been thrown in jail for contempt for refusing to furnish his records. The state subsequently agreed to drop the unrealistic tax assessments against him, if he would drop the lawsuits he had against them. The appellant agreed not to challenge the constitutionality of the Arkansas tax laws in return for the state agreeing to do a normal audit and collect whatever tax and penalty his records revealed he owed.\nThe original assessment against appellant included unemployment taxes due to the employment of three persons. Proof revealed the appellant did not have any employees at all. This is but one more example of the tax collector\u2019s cold-blooded handling of this case.\nThe assessment by the state of income taxes allegedly due from the appellant had even less foundation in the record than did the sales tax assessment for \u201csales for resale.\u201d In fact, the reasoning behind the assessment of income tax is completely void of information concerning the appellant\u2019s standard of living. The income tax assessment was based entirely on standardized tables promulgated by the Internal Revenue Service. Moreover, since the majority finds no support in the record for the $800.00 added to the Department\u2019s estimated gross monthly sales based on sales for resale (a figure equal to H of the total estimated sales), this reduction in total sales should be accordingly reflected in the appellant\u2019s estimated yearly income (almost $15,000) and income taxes. The majority opinion fails to identify the year, nature, or amount of the respective taxes owed by the appellant. I think the following question and answer is representative of the whole process here. The appellant, serving as his own counsel, asked the state\u2019s witness: \u201cThen you made no eifort in fact in seeing that these were accurate figures? They are purely speculation, is that correct, sir?\u201d State\u2019s witness: \u201cYes.\u201d This, in my opinion, accurately describes the entire procedure by the state against this citizen. The taxpayers of the state of Arkansas have a right to expect more consideration from their servants.\nThe tax collectors never at one time contacted the appellant during the audit here in question. Most of his records were never inspected, yet they were declared insufficient. The chief argument for assessing the income tax is that Jones simply could not have lived on the amount of income he reported. His reported income for the past several years was approximately $150 a month. Up until 1976 his wife was gainfully employed outside the home. Also, the taxpayer\u2019s father, who had independent income, lived with him. The fact is that three people were living out in the country on a known income of about $650 per month. The property was owned by the appellant and his wife and there were no mortgages to pay. Many three member families living in the setting described above would actually be able to save money. I know a great many elderly people here in the city of Little Rock who live on not much more than $200 per month. They do not eat well and perhaps don\u2019t sleep well either, but nevertheless they survive. There is nothing in this record that supports the finding that appellant could not live on the reported income. Obviously the appellant and his wife are frugal. They should not be penalized for being independent and willing to live inexpensively.\nIt is amazing to me that this Court, in Ragland v. Travenol Laboratories, Inc., 286 Ark. 33, 689 S.W.2d 349 (1985), held that the statute in question here, Ark. Stat. Ann. \u00a7 84-4715(e) (Repl. 1980), did not operate retroactively and that the state was limited to three years in collecting such taxes, yet holds in the present case that the six year statute applies retroactively. The majority avoids this issue by stating that we will not consider arguments raised for the first time on appeal. However, the record reflects that the issue of the three year statute of limitations was unequivocally presented to the trial court in the appellant\u2019s direct testimony:\nWhat is the fact that I learned, that Act 401 of 1979 did not go into effect until January 1,1980. It alters the fact of that statutorily, the Department of Finance is limited to three years on audits. ... Yet, it is also a fact that the Department of Finance and Administration is holding certificates of indebtedness against Jones\u2019 estate in the amount of approximately One Hundred Forty-Three Thousand Dollars in violation of A) the retrospective concept of law, by applying Act 401, 1979 to the years 1976, 1977, 1978 and 1979 in the instant case, thereby depriving Jones of the use of his property, denying him constitutional guaranteed rights and B) the statutory three year limit is found at Ark. Stat. Ann. 844715A. [Emphasis added.]\nThe appellant argued that Act 401 of 1979 should not be applied retroactively, and that the applicable statute of limitations was therefore three years. This is exactly the conclusion reached by this Court in Travenol. We have previously held that the legislature intended to allow three years in which the Commissioner could commence a challenge to the sufficiency of an income tax return. Ragland v. Alpha Aviation Company, Inc., 285 Ark. 182, 686 S.W.2d 391 (1985).\nJones is apparently a fiercely independent man, and obviously a dissenter. Nevertheless, he is entitled to the same rights as other citizens. It seems to me that the Boston Tea Party was carried out by the likes of Theodore Jones. He may be a thorn in the side of tax collectors but he still deserves equal and fair treatment under the law. I do not think he has been treated fairly.\nThis case is a clear example of the strong hand of the government reaching into the lives and trampling upon the rights of individuals in order to reach a result desired by the government. It seems that all sight is lost of the fact that the Constitution was adopted by the people and for the protection of the rights of the people. This taxpayer struck a deal with the state and the state reneged. He had little choice but to sign the agreement \u2014 he had already spent some time in jail and all of his property had been seized. In doing so, the government had of course seized appellant\u2019s wife\u2019s property as well. Arbitrary, capricious, vindictive, and speculative are the best words to describe the actions of the state in this case. The income tax assessment is completely unfounded by the evidence in the record. I would reverse the assessments except with respect to the three years\u2019 sales taxes.\nHickman, J., joins in this opinion.",
        "type": "concurring-in-part-and-dissenting-in-part",
        "author": "John I. Purtle, Justice,"
      }
    ],
    "attorneys": [
      "Theodore Jones, pro se.",
      "Timothy J. Leathers, Kelly S. Jennings, John H. Theis, Robert Jones, Phillip Raia, Ann Kell, and Joe Morphew, by: Wayne Zakrezewski, for appellee."
    ],
    "corrections": "",
    "head_matter": "Theodore JONES v. Charles D. RAGLAND and the ARKANSAS DEPARTMENT OF FINANCE AND ADMINISTRATION\n87-75\n737 S.W.2d 641\nSupreme Court of Arkansas\nOpinion delivered October 19, 1987\nTheodore Jones, pro se.\nTimothy J. Leathers, Kelly S. Jennings, John H. Theis, Robert Jones, Phillip Raia, Ann Kell, and Joe Morphew, by: Wayne Zakrezewski, for appellee."
  },
  "file_name": "0320-01",
  "first_page_order": 356,
  "last_page_order": 364
}