Bursting Bubbles: Evidentiary Presumptions in Personal Liability Assessments

If a business owner in Florida receives a Notice of Assessment: Personal Liability from the Florida Department of Revenue, it means the department believes they are personally responsible for the company’s tax debt. The penalty can be twice the amount of the tax owed, and the department is assumed to be correct unless proven otherwise. This has not been settled in court, but it’s important for business owners to understand and challenge the penalty if they believe it’s not fair. Personal liability assessments allow the tax department to hold a business officer or director personally responsible for unpaid taxes if they intentionally tried to avoid paying them. The department must prove this intention, and there is an assumption in the law that their proof is correct, unless the officer or director can prove otherwise. The “prima facie correct” language in §213.29 of the Florida Evidence Code creates an assumption that a business officer or director has willfully evaded taxes. This assumption can be challenged and is not considered conclusive under the law. “Prima facie correct” is a legal term that means something is presumed to be true at first sight, but can be challenged with more evidence. In Florida, this presumption affects the burden of proof, meaning that it remains in place unless challenged with strong evidence. This impacts the burden of persuasion in a legal case. A bursting-bubble presumption disappears when evidence is presented to disprove it. For example, if a car rear-ends another car, the driver of the rear car is presumed to be at fault. But if they present evidence to show they were not at fault, the presumption goes away. This is different from a presumption that puts the burden of proof on the other party, meaning they have to prove the opposite of the presumed fact. A burden of proof presumption means that one party has the responsibility to prove a certain fact in a case. When evidence is presented to prove or disprove the presumed fact, the presumption doesn’t just go away. It stays in the case and the jury has to decide if the evidence is enough to prove or disprove the fact.

If a statutory presumption is not clearly created as one affecting the burden of proof, it is considered a bursting-bubble presumption. This means it can be rebutted with evidence.

The only way for a statutory rebuttable presumption to be carved out of the bursting-bubble default rule is if it is specifically created to support public policy. The Evidence Code doesn’t directly explain what the public policy exception means, so we have to look at court cases for guidance. Public policy presumptions include things like protecting police and firefighters, determining the validity of marriage, and deciding on parentage and paternity. Section 213.39 creates a bursting-bubble presumption, which means it can be disproven. The law says that if the government claims you owe money, they have to prove that you were intentionally trying to avoid paying taxes. If you can show that you didn’t knowingly do anything wrong, then the government has to prove that you did. This issue will likely be decided in court, and until then, people are invited to share their thoughts on how it should be resolved. If someone is supposed to collect and pay a certain tax, but they don’t do it on purpose, they can be in big trouble and have to pay a penalty that’s twice the amount of the tax they didn’t pay. This penalty can be challenged, but it’s assumed to be correct unless proven otherwise. In a court case, the judge said that the main goal in interpreting laws is to figure out what lawmakers meant. They usually start by looking at the plain or obvious meaning of the words in the law. They might also use dictionary definitions to help understand the plain meaning.

The law has a term “prima facie,” which means there is a presumption that something is true unless proven otherwise. In Florida, the law says that this kind of presumption can be used in certain situations, like in court. If the other side can prove the presumption is wrong, then it goes away.

There are rules for when and how these presumptions can be used, and they have to follow the law. Some presumptions are meant to help figure out a case, while others are meant to follow public policy. If the law doesn’t say otherwise, the rules for using these presumptions are in the law. This passage discusses the presumption of public policy in tax law. It mentions a specific Florida statute and a court case where the Department of Revenue had a certain position. The author is a tax lawyer at a law firm in Tallahassee, and the column was submitted by the Tax Law Section.

Source: https://www.floridabar.org/the-florida-bar-journal/bursting-bubbles-evidentiary-presumptions-in-personal-liability-assessments/