Office of Tax Appeals

OTA Issues First Opinion Decided by Single Judge Under the Small Case Program

OTA with State Seal

The Office of Tax Appeals posted 30 opinions to its website March 7, including the Appeal of E. Fakhoury – the first posted opinion issued by a single administrative law judge under the OTA’s Small Case Program, which was authorized by legislation that became effective March 1, 2021. Under the program, parties can opt to have their case heard and decided by a single judge rather than a three-judge panel if the amount in dispute meets certain qualifications (for personal income tax disputes, the amount must be less than $5,000).

Administrative Law Judge Sheriene Anne Ridenour ruled in favor of the Franchise Tax Board, finding that the taxpayer did not establish reasonable cause for failing to timely file his 2019 return, and did not establish a basis warranting abatement of the estimated tax penalty. The amount in dispute was $1,705.

“The evidence shows appellant experienced exceptional personal difficulties in July and early August 2020, including three funerals for members of his family in a span of 25 days, plus the 23-day hospitalization of his father with COVID-19,” the opinion states.

Ridenour opined that the taxpayer did not prove that these circumstances continuously prevented him from filing a return, and additionally noted that most of the estimated tax payments in dispute were due prior to the tragic events that struck his family.

The one-judge option was approved by the Legislature and governor in part to expedite the appeals process for cases that do not involve complex issues, and the opinion indicates that this goal was accomplished in this appeal. A “Small Case Program meeting” was held December 12 to allow both parties to present their arguments, and the opinion was issued December 29. Public notification of the OTA’s decisions continues to lag several months behind the issuance of the opinions, however, under the agency’s policy of not posting opinions on its website until the deadline for petitioning for a rehearing has expired, or an opinion has been issued following a rehearing.