{ "id": 3354438, "name": "PETER MASINI et al., d/b/a Blue Gold Liquor Store, Plaintiffs-Appellees, v. THE DEPARTMENT OF REVENUE, Defendant-Appellant", "name_abbreviation": "Masini v. Department of Revenue", "decision_date": "1978-05-05", "docket_number": "No. 77-996", "first_page": "11", "last_page": "16", "citations": [ { "type": "official", "cite": "60 Ill. App. 3d 11" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "48 N.E.2d 926", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "383 Ill. 276", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2485487 ], "opinion_index": 0, "case_paths": [ "/ill/383/0276-01" ] }, { "cite": "242 N.E.2d 205", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1943, "opinion_index": 0 }, { "cite": "41 Ill. 2d 154", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2851304 ], "year": 1943, "opinion_index": 0, "case_paths": [ "/ill-2d/41/0154-01" ] }, { "cite": "367 N.E.2d 1238", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "67 Ill. 2d 195", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5811618 ], "opinion_index": 0, "case_paths": [ "/ill-2d/67/0195-01" ] }, { "cite": "343 N.E.2d 555", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1977, "opinion_index": 0 }, { "cite": "36 Ill. App. 3d 277", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2630774 ], "year": 1977, "opinion_index": 0, "case_paths": [ "/ill-app-3d/36/0277-01" ] }, { "cite": "293 N.E.2d 388", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "9 Ill. App. 3d 1063", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2850155 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/9/1063-01" ] }, { "cite": "62 N.E.2d 674", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1973, "opinion_index": 0 }, { "cite": "391 Ill. 131", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2512860 ], "year": 1973, "opinion_index": 0, "case_paths": [ "/ill/391/0131-01" ] }, { "cite": "298 N.E.2d 789", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "opinion_index": 0 }, { "cite": "12 Ill. App. 3d 725", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2857066 ], "weight": 2, "pin_cites": [ { "page": "730-31" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/12/0725-01" ] }, { "cite": "18 N.E.2d 206", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1973, "opinion_index": 0 }, { "cite": "370 Ill. 225", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2562021 ], "year": 1973, "opinion_index": 0, "case_paths": [ "/ill/370/0225-01" ] }, { "cite": "155 N.E.2d 3", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1938, "opinion_index": 0 }, { "cite": "15 Ill. 2d 327", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2766408 ], "year": 1938, "opinion_index": 0, "case_paths": [ "/ill-2d/15/0327-01" ] } ], "analysis": { "cardinality": 549, "char_count": 12097, "ocr_confidence": 0.891, "pagerank": { "raw": 2.596409469949756e-07, "percentile": 0.8191006502695717 }, "sha256": "d57441d228ee8f17db258f3bd021f94e4b04f3e7274821df4eb9b349f59e142e", "simhash": "1:91f37ccbdbd6a387", "word_count": 1908 }, "last_updated": "2023-07-14T19:17:48.742090+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "PETER MASINI et al., d/b/a Blue Gold Liquor Store, Plaintiffs-Appellees, v. THE DEPARTMENT OF REVENUE, Defendant-Appellant." ], "opinions": [ { "text": "Mr. JUSTICE MEJDA\ndelivered the opinion of the court:\nThe defendant, Illinois Department of Revenue (hereinafter \u201cDepartment\u201d), appeals from the order of the circuit court of Cook County in an administrative review action which reversed the Department\u2019s decision, cancelled a tax deficiency assessed, and entered judgment in favor of plaintiffs. We reverse.\n\u00d3n December 18, 1974, the Department issued a notice of tax liability to the plaintiffs, Peter Masini and Pio Masini, doing business as Blue Gold Liquor Store. The total liability was in the amount of *12,892.55, which comprised alleged deficiencies in State and municipal Retailers\u2019 Occupation Taxes (ROT) for the period from January 1971 through October 1973. The foregoing amount included penalties and interest. Plaintiffs filed a timely protest and requested a hearing with the Department.\nAt the hearing the Department entered into evidence two documents labeled \u201cCorrection of Returns or Determination of Tax Due,\u201d one showing amounts due for the state ROT, and the other the amount for municipal ROT. Attached to the documents were several pages of handwritten documents, described by the hearing officer as the \u201csummary analysis of tax liability per audit.\u201d Also entered into evidence were the notice of tax liability, plaintiffs\u2019 protest and request for hearing, notices of hearings, numerous post office return receipts, and the hearing officer\u2019s letter of authorization. No documentary evidence was offered by plaintiffs. Plaintiffs did not appear personally but were represented by counsel.\nPlaintiffs objected to the notice of tax liability on the grounds that it was vague and indefinite, in that no section of the Retailers\u2019 Occupation Tax Act was specified, that the assessment of liability was barred by the statute of limitations, and that no prima facie case was established by the Department. Plaintiffs also tendered payment of *4297.52, which they maintained constituted their remaining liability, based upon their own audit of their records.\nAt the hearing the Department auditor who had made the assessment of plaintiffs\u2019 tax deficiencies testified as to the methods followed and conclusions made in determining the amount of tax due. The auditor stated that she did not go to the plaintiffs\u2019 place of business to conduct the audit and that all information was relayed to her through plaintiffs\u2019 lawyer. Plaintiffs\u2019 books and records for the period from January 1971 through October 1973 were made available to the auditor. The records included plaintiffs\u2019 sales tax returns, sales journals, Federal and State income tax returns and W-2 forms. According to the auditor the worksheets the Department entered into evidence were prepared by her and included an analysis of plaintiffs\u2019 gross receipts which revealed a difference between the amounts shown in plaintiffs\u2019 books and records and ROT returns and the higher amounts shown on their Federal income tax return. The auditor also testified that she credited plaintiffs for taxes already paid, but disallowed deductions for cigarette tax payments and jukebox commissions because no receipts were available to substantiate the claims for those credits. On cross-examination the auditor stated that plaintiffs had turned over all of the books and records that had been requested, but that they were not sufficient to allow the cigarette and jukebox credits and did not disclose the reason for the higher income figure on the Federal tax returns. The auditor concluded that there was a tax deficiency of *9513.60, assessed a 5% penalty of *475.68, computed interest in the amount of *2903.27 and issued the notice of tax liability for *12,892.55. The Department issued its final assessment in the amount of *10,725.61, basing the assessment on the corrected returns in evidence and deleting the portion of the deficiency for the period barred by the statute of limitations. The hearing disposition also noted that the plaintiffs\u2019 payment of *4297.52 had been received and credited against their account.\nOn administrative review the circuit court entered an order which cancelled and held for naught the final assessment of the Department, finding that the Department\u2019s decision was unsupported by the record and that the Department therefore was without authority to conclude that plaintiffs\u2019 records were inadequate or that any additional tax was due. The Department has brought the present appeal, maintaining that it had established a prima facie case and that the plaintiffs failed to meet the burden of overcoming the Department\u2019s case. The plaintiffs contend that, because their books and records were not inconsistent with their sales tax returns, and because the Department had all of plaintiffs\u2019 books and records and did not charge that they were inaccurate or false, the Department\u2019s prima facie case has been overcome.\nOpinion\nThe issues on review are: (1) whether the Department has established a prima facie case against the plaintiffs; and (2) if a prima facie case has been made, whether it has been overcome by the plaintiffs\u2019 tax records.\nThe Retailers\u2019 Occupation Tax Act (Ill. Rev. Stat. 1975, ch. 120, par. 443) provides with regard to the examination and correction of tax returns that:\n\u201cAs soon as practicable after any return is filed, the Department shall examine such return and shall, if necessary, correct such return according to its best judgment and information, which return so corrected by the Department shall be prima facie correct and shall be prima facie evidence of the correctness of the amount of tax due, as shown therein. * * *\n# # #\nProof of such correction by the Department may be made at any hearing before the Department or in any legal proceeding by a reproduced copy of the Department\u2019s record relating thereto in the name of the Department under the certificate of the Director of Revenue. Such reproduced copy shall without further proof, be admitted into evidence before the Department or in any legal proceeding shall be prima facie proof of the correctness of the amount of tax due, as shown therein.\u201d\nThe statute has been strictly construed insofar as establishing a prima facie case is concerned and the Illinois courts have uniformly sustained a prima facie case based on corrected tax returns. (Fillichio v. Department of Revenue (1958), 15 Ill. 2d 327, 155 N.E.2d 3; Anderson v. Department of Finance (1938), 370 Ill. 225, 18 N.E.2d 206; Quincy Trading Post, Inc. v. Department of Revenue (1973), 12 Ill. App. 3d 725, 298 N.E.2d 789.) There is no statutory requirement that the Department substantiate the basis for the corrected return or produce the auditor who computed the corrected return in order to support its prima facie case. (Tatz v. Department of Finance (1945), 391 Ill. 131, 62 N.E.2d 674; Rentra Liquor Dealers, Inc. v. Department of Revenue (1973), 9 Ill. App. 3d 1063, 293 N.E.2d 388.) However, the Illinois Supreme Court has suggested that, when it is called into question, the method employed by the Department in correcting a taxpayer\u2019s return must meet some minimum standard of reasonableness. (Fillichio v. Department of Revenue; Anderson v. Department of Finance.) The reasonableness standard is based upon the statutory provision which requires that the Department\u2019s corrected returns be made \u201caccording to its best judgment and information.\u201d Ill. Rev. Stat. 1975, ch. 120, par. 443; Grand Liquor Co. v. Department of Revenue (1976), 36 Ill. App. 3d 277, 343 N.E.2d 555, affd (1977), 67 Ill. 2d 195, 367 N.E.2d 1238.\nAt the hearing the auditor who corrected the tax returns testified on behalf of the Department. She testified that she had prepared both the returns and the worksheets that were entered into evidence and that the plaintiffs\u2019 books and records did not explain the discrepancy between their books and records and ROT returns and the higher figures appearing on their Federal tax return. She also testified that, had she been provided with receipts to document the claimed deductions for cigarette taxes and jukebox commissions, the deductions would have been allowed. In spite of requests for receipts, she said, she never received them and informed the plaintiffs and their attorney that she could wait no longer to complete the audit. Although the auditor admitted that plaintiffs had given her their full cooperation and that she received all of their books and records, her testimony as to the lack of sufficient substantiation for the claimed deductions was not challenged. The tax returns are among the documents the plaintiffs are required to preserve according to the ROT Rules and Regulations. (Illinois Retailers\u2019 Occupation T\u00e1x Articles, art. 7, pars. 1 and 2 (1976).) Furthermore, according to article 7, paragraph 2, they are to be kept \u201csubject to inspection and audit by the Department.\u201d We find, therefore, that the Department\u2019s action in basing its corrected return on plaintiffs\u2019 Federal tax return was not unreasonable and the Department has met the statutory requirements for establishing its prima facie case against the plaintiffs.\nWe turn now to plaintiffs\u2019 contention that they have overcome the Department\u2019s prima facie case. Plaintiffs maintain that because all of their books and records were submitted to the Department and the Department has contended neither that they are unworthy of belief nor that they are inaccurate or false in any respect or inconsistent with plaintiffs\u2019 sales tax returns, the prima facie case has been overcome.\nThe Department having established its prima facie case, the burden shifts to the plaintiffs to overcome it. (Anderson v. Department of Finance.) In order to overcome the presumption of validity attached to the Department\u2019s corrected returns, plaintiffs must produce competent evidence, identified with their books and records and showing that the Department\u2019s returns are incorrect. Copilevitz v. Department of Revenue (1968), 41 Ill. 2d 154, 242 N.E.2d 205; Du Page Liquor Store, Inc. v. McKibbin (1943), 383 Ill. 276, 48 N.E.2d 926.\nThe plaintiffs have challenged the corrected returns, but have offered no testimony or evidence in support of their original returns. While plaintiffs contend that the Department has all of the records that it requested, those records were not in evidence at the hearing. The only documentary evidence offered and admitted consisted of the corrected returns and the auditor\u2019s worksheets offered by the Department. The Department was not required to offer plaintiffs\u2019 books and records into evidence to establish its prima facie case. (Ill. Rev. Stat. 1975, ch. 120, par. 443; Tatz v. Department of Finance.) Although they were represented by counsel at the hearing, the plaintiffs themselves did not appear and testify. Nor was any evidence offered on their behalf. As was stated in Quincy Trading Post, Inc. v. Department of Revenue (1973), 12 Ill. App. 3d 725, 730-31, 298 N.E.2d 789, 793:\n\u201cIn short, the plaintiff may not prevail by merely saying its own return was correct, and that the revenue department must prove its return correct. Simply questioning the Department of Revenue\u2019s return or denying its accuracy does not shift the burden to the Department of Revenue.\u201d\nWe conclude that the actions of the plaintiffs constitute no more than a bare challenge to the Department\u2019s return. Unaccompanied as it was by any competent evidence, the challenge itself is insufficient to overcome the Department\u2019s prima facie case.\nAccordingly, the order of the circuit court of Cook County is reversed and the decision of the Department is reinstated and affirmed.\nOrder reversed; decision reinstated and affirmed.\nSULLIVAN, P. J., and WILSON, J., concur.", "type": "majority", "author": "Mr. JUSTICE MEJDA" } ], "attorneys": [ "William J. Scott, Attorney General, of Chicago (George W. Lindberg and Stephen R. Swofford, Assistant Attorneys General, of counsel), for appellant.", "Wexler & Wexler, of Chicago (Samuel Wexler, of counsel), for appellees." ], "corrections": "", "head_matter": "PETER MASINI et al., d/b/a Blue Gold Liquor Store, Plaintiffs-Appellees, v. THE DEPARTMENT OF REVENUE, Defendant-Appellant.\nFirst District (5th Division)\nNo. 77-996\nOpinion filed May 5, 1978.\nWilliam J. Scott, Attorney General, of Chicago (George W. Lindberg and Stephen R. Swofford, Assistant Attorneys General, of counsel), for appellant.\nWexler & Wexler, of Chicago (Samuel Wexler, of counsel), for appellees." }, "file_name": "0011-01", "first_page_order": 33, "last_page_order": 38 }