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In State v. Elliott, 2006 WL 1222980 (Mo.Ct.App. May 9, 2006), the plaintiff challenged her tax assessment based on DOR's failure to apprise her of her "right to challenge the assessment" and DOR's failure to send her a final notification of its decision.
Summary of this case from Crum v. Missouri Director of RevenueOpinion
No. WD 65782
May 9, 2006
Appeal from the Circuit Court of Clay County, Honorable Janet L. Sutton, Judge.
Before Joseph M. Ellis, Presiding Judge, Harold L. Lowenstein, Judge and Paul M. Spinden, Judge.
Mina Elliott appeals from a judgment entered in the Circuit Court of Clay County ordering her to pay $5,712.85 in delinquent taxes, additions to tax, and interest. For the following reasons, we affirm the trial court's judgment.
For the tax years 1991 through 1995, Elliott did not file Missouri income tax returns or pay any income tax to the State of Missouri. In 1999, pursuant to § 143.611, the Director of Revenue estimated Elliott's tax liability for those years based upon federal income tax records and sent Elliott notices, via certified mail to her last known address, informing her of the amount of deficiency proposed to be assessed against her for each of the relevant tax years and informing her of her right to protest those assessments. Those notices were subsequently returned to the Director by the postal service as unclaimed. After Elliott failed to protest any of those assessments within sixty days from the date the proposed assessments were mailed to her, the amounts reflected in those proposed assessments were duly assessed against Elliott, and the Director issued notices to her demanding payment.
After Elliott failed to pay the amounts that had been assessed by the Director, on March 13, 2003, the Director filed a Petition for Delinquent Individual Income Tax in the Circuit Court of Clay County asking the court to enter judgment against Elliott for the amount of the assessments along with the interest and other additions allowed by statute. The case was tried on June 13, 2005. At the close of the Director's evidence, Elliott moved for dismissal, asserting that the Director's failure to provide her with actual notice of the proposed tax assessments and her right to appeal constituted a violation of her right to due process under the Fourteenth Amendment to the United States Constitution. After overruling Elliott's motion, the trial court entered judgment against Elliott for $5,712.85.
In her sole point on appeal, Elliott claims that the trial court erred in denying her motion to dismiss. Elliott contends that the lack of actual notice unconstitutionally deprived her of the opportunity to challenge the amounts assessed by the Director.
Section 143.611.2 provides that "[i]f [a] taxpayer fails to file an income tax return, the director of revenue shall estimate the taxpayer's income and the tax thereon from any available information and notify the taxpayer of the amount proposed to be assessed." Section 143.611.3 goes on to state that this notice "shall set forth the reason for the proposed assessment" and "shall be mailed by certified or registered mail to the taxpayer at his last known address." Pursuant to § 143.631, a taxpayer is allowed to file a written protest with the Director of Revenue challenging the assessment within sixty days of the mailing of the notice of deficiency. "In the event a protest is filed and a decision is rendered by the director adverse to the taxpayer, § 621.050.1 affords the taxpayer the right to appeal the director's decision to the Administrative Hearing Commission." State ex rel. Dir. of Revenue v. Anderson , 957 S.W.2d 800, 801 (Mo.App. S.D. 1997). Absent the timely filing of a protest with the Director, the notice of deficiency "constitute[s] a final assessment of the amount of tax specified together with interest, additions to tax, and penalties." § 143.621.
Elliott concedes that the Director's mailing of the notices via certified mail complied with the relevant statutory provisions. Elliott contends, however, that the provision of § 143.611.3 allowing for notice by certified or registered mail is unconstitutional to the extent that it allows the assessment to become final without the taxpayer receiving actual notice of the assessment or their right to challenge the assessment. Elliott argues that she was denied due process, as guaranteed by the Fourteenth Amendment to the United States Constitution and article I, § 10 of the Missouri Constitution, when the assessments became final despite the fact that she had no actual notice thereof.
Initially, we must determine whether this Court has jurisdiction to entertain Elliott's constitutional challenge. "The Missouri Supreme Court has exclusive jurisdiction over appeals involving the constitutional validity of a state statute." State v. Dillard , 158 S.W.3d 291, 302 (Mo.App.S.D. 2005). "The mere assertion that a statute is unconstitutional, however, does not deprive the court of appeals of jurisdiction unless the constitutional issue is real and substantial, and not merely colorable." Id. (internal quotation omitted). "In determining whether a constitutional claim is real and substantial, we make a preliminary inquiry as to whether it presents a contested matter of right that involves fair doubt and reasonable room for disagreement." McCormack v. Capital Elec. Constr. Co. , 159 S.W.3d 387, 404 (Mo.App.W.D. 2004). "If the initial inquiry discloses the claim is so legally or factually insubstantial as to be plainly without merit, the claim may be deemed merely colorable." Id. We conclude, based upon the reasoning set forth infra, that Elliott's constitutional claims are merely colorable and do not invoke the Supreme Court's exclusive jurisdiction.
"Challenges to the constitutionality of a statute are legal issues that are reviewed de novo." State v. Beine , 162 S.W.3d 483, 490 (Mo. banc 2005). "`A statute is presumed to be constitutional and will not be invalidated unless it clearly and undoubtedly violates some constitutional provision and palpably affronts fundamental law embodied in the constitution.'" Id. (quoting Board of Educ. of St. Louis v. State , 47 S.W.3d 366, 368-69 (Mo. banc 2001)).
"[T]he Due Process Clause of the Fourteenth Amendment prohibits the States from depriving a person of property without `due process of law.'" Dusenbery v. United States , 534 U.S. 161, 168, 122 S.Ct. 694, 699, 151 L.Ed.2d 597 (2002). "From these `cryptic and abstract words'", the United States Supreme Court has "determined that individuals whose property interests are at stake are entitled to `notice and an opportunity to be heard.'" Id. Consequently, "prior to an action which will affect an interest in . . . property protected by the Due Process Clause of the Fourteenth Amendment, a State must provide `notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.'" Mennonite Bd. of Missions v. Adams , 462 U.S. 791, 795, 103 S.Ct. 2706, 2709, 77 L.Ed.2d 180 (1983) (quoting Mullane v. Central Hanover Bank Trust Co. , 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950)).
Failure to provide adequate notice results in a violation of the affected individual's due process rights. Lambert v. Holbert , 172 S.W.3d 894, 898 (Mo.App.S.D. 2005). However, "due process does not necessarily require the best conceivable method of notice, but only notice reasonably calculated to reach the adverse party." Campbell v. Campbell , 780 S.W.2d 89, 92 (Mo.App.E.D. 1989). "The constitutionality of any method of service of notice `depends on the particular circumstances.'" Id. (quoting Tulsa Prof'l Collection Servs. Inc. v. Pope , 485 U.S. 478, 484, 108 S.Ct. 1340, 1344, 99 L.Ed.2d 565 (1988)).
As noted supra, the Director sent notice to Elliott of the various assessments by certified mail to Elliott's last known address as provided for in § 143.611.3. The United States Supreme Court has "repeatedly recognized that mail service is an inexpensive and efficient mechanism that is reasonably calculated to provide actual notice" and may be sufficient to satisfy the notice requirement of due process. Pope , 485 U.S. at 490, 491, 108 S.Ct. at 1347, 1348 (holding that publication was not sufficiently calculated to provide a known creditor of an estate with notice and stating that due process required that the creditor "be given `[n]otice by mail or other means as certain to ensure actual notice'"); see also Dusenbery , 534 U.S. at 172-73, 122 S.Ct. at 702 (holding that the FBI's use of a certified letter to notify a prisoner of forfeiture proceedings satisfied due process as it was reasonably calculated to get to the prisoner regardless of whether the prisoner ever actually received the letter); Adams , 462 U.S. at 799-800, 103 S.Ct. at 2712 (recommending "[n]otice by mail or other means as certain to ensure actual notice" after holding that notice by publication and posting was insufficient to provide adequate notice of a tax sale to a mortgagee of the affected property); Mullane , 339 U.S. at 314-15, 319, 70 S.Ct. at 657-58, 660 (suggesting mailed notice as a constitutional alternative where notice by publication was found unconstitutional in an action to settle the accounts of a common trust fund). The mail is considered dependable, and "ordinary mail notice may be constitutionally sufficient in some circumstances." Campbell , 780 S.W.2d at 92 (citing Mullane , 339 U.S. at 318, 70 S.Ct. at 659).
Elliott's claim that actual notice is always required to satisfy due process is clearly contrary to existing case law. Furthermore, Elliott has not identified anything about this case which would differentiate it from those cases in which notice by mail has been found sufficient or was recommended as a constitutional alternative to an unconstitutional form of notice, nor has Elliott cited to any case in which notice by certified mail has been held to be constitutionally insufficient.
Under all the circumstances, we find that notice by certified mail, as prescribed by the legislature, is more than reasonably calculated to apprise taxpayers of assessments proposed by the Director and to afford them an opportunity to present their objections thereto. Accordingly, the State's use of this means to notify Elliott of the proposed assessments and her right to challenge those assessments satisfied the notice requirement of due process. The trial court did not err in denying Elliott's motion to dismiss. Point denied.
Moreover, the State has argued, and the tax code appears to provide, that Elliott still has the ability to challenge the amount assessed by the Director by paying the amount assessed and filing a claim for a refund under § 143.801, which may be filed within two years from the time the tax is paid, and that Elliott, therefore, has not been deprived of due process because she has a post-deprivation remedy available to her. See § 143.801 ; Morse v. Internal Revenue Serv. , 635 F.2d 701, 703 (8th Cir. 1980).
The judgment is affirmed.
All concur.