Jose A. Ruiz, 44, of Odessa

Jose A. Ruiz, 44, of Odessa, was convicted of a third-degree felony motor fuel tax fraud offense. Ruiz pled guilty to Engaging in a Motor Fuel Transaction without a License and was sentenced to 5 years in the Institutional Division of the Texas Department of Criminal Justice (TDCJ), probated for 4 years. Conditions of community supervision include the payment of restitution in the amount of $2,730 to Big Dog Rig Movers and performance of 10 hours of community service per month. Ruiz was convicted in a related State Jail Felony Theft case, receiving a sentence of 2 years in the State Jail Division of TDCJ, probated for 4 years, to run concurrent to his motor fuels case. Ruiz’s cases, filed as cause numbers CR39486 and CR39153, were prosecuted in Midland County.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

 

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Adolfo Baeza Mendoza, 33, of Big Spring

Adolfo Baeza Mendoza, 33, of Big Spring, was convicted of the Class A misdemeanor offense of Concealing Motor Fuel. He was sentenced to serve one day in the Reeves County Jail and ordered to pay a $500 fine and pay restitution of $380 to Desta Drilling. Mendoza’s case was prosecuted as Reeves County cause number 27,687.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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Rene Rodriguez Garcia, 47, of Pecos

Rene Rodriguez Garcia, 47, of Pecos, was convicted of the Class A misdemeanor offense of Concealing Motor Fuel. He was sentenced to serve one day in the Reeves County Jail and to pay restitution of $1220 to Desta Drilling. Garcia’s case was prosecuted as Reeves County cause number 27,685.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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Jeffrey Stoddard, 41, of El Paso

Jeffrey Stoddard, 41, of El Paso was sentenced to serve 6 months in the El Paso County Detention Facility after pleading guilty to Attempting to Transport Unstamped Cigarettes, a state jail felony. Stoddard was accused by indictment of offering unstamped cigarettes for sale on Craig’s List, and then transporting the product for the purpose of making a sale. The case, filed as cause number 2011ODO3977-327, was prosecuted in El Paso County.

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Jimmy Dane Bishop, 58, of Winters

Jimmy Dane Bishop, 58, of Winters, was sentenced to 4 years of deferred adjudication in two felony cases involving motor fuel tax fraud. Bishop admitted to the allegations contained in the indictments, which included that he using dyed diesel in a motor vehicle on a public highway, made and delivered false tax reports to the Comptroller, failed to remit motor fuel tax funds, and made and delivered to the Comptroller reports required to be made by law which contained false information. Bishop was ordered to pay a $5,000 fine and perform 160 hours of community service. The cases, filed as cause numbers D1DC-900075 and -76, were prosecuted in Travis County.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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Juan Jose Hernandez, 32, of Denver City

Juan Jose Hernandez, 32, of Denver City was sentenced to 4 years of deferred adjudication after pleading guilty to state jail felony Theft. Hernandez was accused of unlawfully appropriating diesel fuel valued between $1500 and $20,000 from Five Star Consolidated without its consent. Hernandez was ordered to pay a $2,000 fine, pay restitution of $3,432, and perform 120 hours of community service. The case, filed as cause number 2923, was prosecuted in Yoakum County District Court.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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Kenneth Obrian Payne, 42, of Houston

Kenneth Obrian Payne, 42, of Houston, was convicted of the second-degree felony offense of Evading Motor Fuel Tax and sentenced to 30 months in the Texas Department of Criminal Justice – Institutional Division. Payne’s sentence came after a plea of guilty in the case, filed as Travis County cause number D1DC11-900155.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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Joe Flores, 57, of Morton

Joe Flores, 57, of Morton, was indicted by a Cochran County Grand Jury for two felony motor fuel tax related offenses. Flores is accused in cause number 12-01-1411 with intentionally and knowingly engaging in a motor fuel transaction without being licensed as required by state law, a third-degree felony. He is accused in cause number 12-01-1412 with Theft of fuel valued between $1,500 and $20,000, a state jail felony. Flores’ cases are pending in the 286th District Court.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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Cresencio Avalos, 51, of Morton

Cresencio Avalos, 51, of Morton, was indicted by a Cochran County Grand Jury for the felony offense of Evading or Attempting to Evade Motor Fuel Tax. Avalos is accused in cause number 12-01-1410 of concealing, delivering, and using dyed diesel fuel for the operation of a motor vehicle on a public highway, to intentionally evade or attempt to evade motor fuel tax. The offense is a second degree felony. The case is pending in the 286th District Court.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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Mirmoossa Hashemian, 48, of Southlake

Mirmoossa Hashemian, 48, of Southlake, was arrested after being indicted by a Travis County Grand Jury for third-degree felony motor vehicle sales tax fraud. Hashemian is accused of intentionally and knowingly failing to remit more than $20,000 but less than $100,000 in motor vehicle sales tax collected from auto buyers as required by law. The offense, filed as Travis County cause number D1DC11-900293, is pending in Travis County District Court.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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Successor Liable for Seller’s Tax Liability Incurred after Business was Sold

In Hearing No. 48,186, the Texas Comptroller of Public Accounts, through successor liability, assessed mixed beverage tax owed by a business on the purchaser of that business. The liability arose when the Comptroller audited the company after it sold its business to the petitioner.

Texas tax law, in Tax Code Section 111.020, provides that if a person who is liable for tax sells the business or the stock of goods or quits the business, the successor shall withhold an amount of the purchase price sufficient to pay the tax liability. A purchaser who fails to do so is liable for the amount due up to the value of the purchase price.

To avoid successor liability, the purchaser may request from the Comptroller a certificate that no tax is due.

At the hearing, Comptroller staff presented as evidence of successor liability the sales contract between the previous club and the petitioner. The contract provided the petitioner receive all rights, title and ownership of the previous club’s physical assets. The assets included cash registers, televisions, tables and bar stools, DJ sound equipment, a microwave oven, office furniture and equipment, glassware and other items used to mix and serve drinks and cleaning equipment (mops, brooms, mop bucket and supplies). In addition, the assets included alcoholic beverages listed on the ending inventory for the Texas Alcoholic Beverage Commission (TABC).

The petitioner contended that it cannot be held liable as a successor unless it used the business name of the original club. The petitioner’s president testified that the petitioner had no intent to open and operate a new club as the original club. He stated that the petitioner did intend to buy everything identified in the contract, but after the contract was signed, he discovered the original club did not own all the assets and had rented the tables, bar stools and furniture.

He also testified that the inventory list was prepared for TABC‘s benefit and the petitioner never received the alcoholic beverages on the list. The TABC prohibited the sale because the petitioner did not have a liquor permit at that time. When the petitioner obtained a permit and moved onto the premises, according to the president, the only alcoholic beverages left were a couple of bottles of beer.

While there was no request for a Certificate of No Tax Due, the president claimed he called the Comptroller’s office and was told that the original club had no outstanding liabilities.

When determining whether a business has been sold, Rule 3.7(d), relating to successor liability, provides that the Comptroller examines the transaction to determine what the parties intended to buy and sell. The answer in each situation will depend on the type of business involved, and a sale can occur even if a few assets are transferred.

The Comptroller may assess the successor of a business within four years from either the date the seller sells the business or the date the Comptroller’s assessment is made against the seller, whichever occurs later. See Tax Code Sections 111.020(e) and 111.201. Based on this period of limitation, Comptroller’s Hearing No. 27,579 had previously held that a successor can be held liable for a predecessor’s audit liability even though the predecessor was audited after the business was sold.

The administrative law judge ruled that the contract and the testimony of the petitioner’s president established “without a doubt that petitioner intended to purchase the entire business…” The judge continued, “Despite not receiving all assets that were included in the contract, petitioner did in fact acquire every item that [predecessor] actually owned at the club location… The continuation of a similar business at the same location using the entire assets, even if they are few, purchased from the predecessor, even under a different name, is sufficient for petitioner to be the successor under Tax Code Section 111.020.”

The administrative law judge recommended that the successor liability imposed against the night club be upheld but the amount assessed be reduced to the purchase price of the business. The Comptroller concurred.

*Originally published in Tax Policy News; a monthly newsletter about Texas tax policy at http://www.window.state.tx.us/taxinfo/taxpnw/tpn2009/tpn906.html

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