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HomeMy WebLinkAbout94-0688` COMMONWEALTH OF PENNSYLVANIA DEPARTMENT OF REVENUE BUREAU OF INDIVIDUAL TAXES LNHERITANCE TAX INHERITANCE TAX DIVISION Po Box zeo6ol - - - RECORD ADJUSTMENT HARRISBURG PA 17128-0601 .-~ ~, ~ - ~~ ,~~ . SALLY J WINDER CU~1; '.~~., F~ 9974 MOLLY PITCHER HWY SHIPPENSBURG PA 17257 REV-1593 EX AFP (03-05) DATE 11-17-2008 ESTATE OF GARLING H S DATE OF DEATH 07-29-1994 FILE NUMBER 21 94-0688 COUNTY CUMBERLAND ACN 101 Amount Remitted MAKE CHECK PAYABLE AND REMIT PAYMENT T0: REGISTER OF WILLS CUMBERLAND CO COURT HOUSE CARLISLE, PA 17013 NOTE: To insure proper credit to your account, submit the upper portion of this form with your tax payment. CUT ALONG THIS LINE -! RETAIN LOWER PORTION FOR YOUR RECORDS ~ --------------------------------------------------------------------------------------------------------------------------------------- REV-1593 EX AFP C03-05~ ** INHERITANCE TAX RECORD ADJUSTMENT ** ESTATE OF GARLING H S FILE N0. 21 94-0688 ACN 101 DATE 11-17-2008 ADJUSTMENT BASED oN: PROTEST BOARD DECISION VALUE OF ESTATE: 1. Real Estate (Schedule A) C1) .00 2. Stocks and Bonds (Schedule B) C2) .00 3. Closely Held Stock/Partnership Interest (Schedule C) (3) 702, 000.00 4. Mortgages/Notes Receivable (Schedule D) (4) .00 5. Cash/Bank Deposits/Misc. Personal Property (Schedule E) (5) 192, 152.00 6. Jointly Owned Property (Schedule F) [6) .00 7. Transfers (Schedule G) C7) .00 8. Total Assets C8) 894, 152.00 DEDUCT IONS AND EXEMPTIONS: 9. Funeral Expenses/Administrative Costs/ Miscellaneous Expenses (Schedule H) (9) 7, 088.00 10. Debts/Mortgage Liabilities/Liens (Schedule I) C10) 14,517.35 11. Total Deductions (11) 21,605.35 12. Net Value of Tax Return (12) 872,546.65 13. Charitable/Governmental Bequests; Non-elected 9113 Trus ts (S chedule J) (13) .00 14. Net Value of Estate Subject to Tax (14) 872,546.65 TAX: 15. Amount of Line 14 at Spousal rate C15) 872,546.65X 03 = 26,176.40 16. Amount of Line 14 taxable at Lineal/Class A rate (16) .00 X 06 = .00 17. Amount of Line 14 at Sibling rate C17) . 00 X 00 = . 00 18. Amount of Line 14 taxable at Collateral/Class B rate (18) .00 X 15 = .00 19. Principal Tax Due C19) 26, 176.39 DATE I NUMBER I INTEREST/PEN PAID C-] I AMOUNT PAID INTEREST IS CHARGED THROUGH 12-02-2008 TOTAL TAX CREDIT .00 AT THE RATES APPLICABLE AS OUTLINED ON THE BALANCE OF TAX DUE 26,176.39 REVERSE SIDE OF THIS FORM INTEREST AND PEN. 25,828.56 TOTAL DUE 52,004.95 ~ IF PAID AFTER DATE INDICATED, SEE REVERSE C IF TOTAL DUE IS LESS THAN S1, NO PAYMENT IS REQUIRED. '~ FOR CALCULATION OF ADDITIONAL INTEREST. IF TOTAL DUE IS REFLECTED AS A "CREDIT" (CR), YOU MAY BE DUE A REFUND. SEE REVERSE SIDE OF THIS FORM FOR INSTRUCTIONS.] BOARD OF APPEALS P O Box 281021 COMMONWEALTH OF PENNSYLVANIA =_ HARRISBURG, PA 17128-1021 DEPARTMENT OF REVENUE - ' _ -. ' '. SALLY J WINDER ESQ IN RE ESTATE OF: 9974 MOLLY PITCHER HWY SHIPPENSBURG PA 17257 GARLING H SCOTT DOCKET NO.: 0503252 TAX TYPE: Inheritance APPEAL TYPE Protest FILE NUMBER: 2194-0688 ACN: 101 APPRAI SEMENT: 12/22/2004 PETITION FILED: 2/28/2005 EXAMINER: JEFFREY HOLLENBUSH Direct Dial: (717) 783-7891 Fax: (717) 787-7270. Email:jhollenbus@state.pa.us MAILING DATE: October 27, 2008 DECISION AND ORDER The original inheritance tax return as filed valued decedent's 44.44% shareholder interest in Valley Baking Company, Inc. at $27,692.00, the amount received by decedent's surviving spouse under the terms of an after-death Non-Competition Agreement with Stroehmann Bakeries, Inc. The return also valued decedent's 50% partnership interest in G & C Associates at a negative $75,646.00. On December 22, 2004, the Department issued an appraisement and assessment that valued decedent's interests in Valley Baking Company, Inc. and G & C Associates at $302,000.00 and $400,000.00 respectively. Additionally, the Department determined the estate was liable for the payment of tax on $170,600.00 due the decedent under a non- compete clause of the February 16, 1994 Asset Purchase Agreement between Valley Baking Company, Inc. and Martin's Famous Pastry Shoppe, Inc. Tax was also imposed on the payments received by decedent's spouse under the Non-Competition Agreement with Stroehmann Bakeries, Inc. GARLING H SCOTT BOARD DOCKET NO. 0503252 Page 2 of 4 Petitioner raises several objections to the assessment. First, Petitioner argues the value of decedent's interest in Valley Baking Company, Inc. was limited to the $~?7,692.00, received by decedent's surviving spouse under the terms of the after-death Agreement with Stroehmann Bakeries, Inc. Second, Petitioner contends the Department's valuation of G & C Associates fails to consider the partnership's obligation to pay Galen Asper $400,000.00 on an installment basis, beginning in 2002. Finally, Petitioner argues the assessed value of the receivable due the estate under the non-compete clause of the Agreement with Martin's Famous Pastry Shoppe, Inc. must be reduced to exclude payments received by the decedent prior to his death. A hearing was held at the Department of Revenue, Board of Appeals on November 15, 2006. Present on behalf of the estate was Barbara L Carling-Myers, decedent's wife, and John McCrea, Esquire. Hearing Officer Jeffrey Hollenbush represented the Board of Appeals. The Department's valuation of Valley Baking Company, Inc. was based on the corporation's 1994 U.S. Income Tax Return. That return reported the following: Accounts and Notes Receivable $611,143.00 Fixed Assets (Net) $6,055.00 Other Assets $206,356.00 Total Assets $823,554.00 Accrued Federal and State Taxes - $143,000.00 Equity $680,554.00 Decedent's 44.44% interest was therefore valued at $302,000.00 ($680,554.00 times 44.44%). In the appeal, Petitioner states the corporation's balance sheet does not demonstrate the reality that Valley Baking had less than nominal value after its sale of assets to Martin's Famous Pastry Shoppe. Petitioner contends that $356,143.0() of the GARLING H SCOTT BOARD DOCKET NO. 0503252 Page 3 of 4 accounts receivable should be written off as uncollectible, $45,000.00 of the notes receivable was payable to other individuals under the Stroehmann Agreement, and the $124,518.00 prepaid pension is not, on its face, a corporate asset. Petitioner also contends that there were additional Pennsylvania corporate tax liabilities. In the opinion of this Board, the corporation's December 31, 1994 balance sheet would only reflect assets remaining after the February 1994 sale of property to Martin's. Further, cash and receivables were specifically excluded from the sale under Section 1.1.2 of the Agreement. Petitioner has provided no evidence that any portion of the accounts receivable were uncollectible at decedent's death, or that the balance sheet failed to reflect other outstanding Pennsylvania corporate tax obligations. Petitioner has also submitted no evidence that the notes receivable of $255,000.00 included $45,000.00 payable to specific individuals under the Stroehmann Bakeries Non-Competition Agreement. Finally, while a pension plan belongs beneficially to the participants, any prepayment of funds remains an asset of the corporation. The Department's $302,000.00 valuation of decedent's interest in Valley Baking Company, Inc. must therefore be upheld. With respect to G & C Associates, the partners agreed to make monthly payments, commencing no later than June 11, 2002, to Galen and Jeannette Asper until a total payment of $400,000.00 has been made. In the notes to the partnership's December 31, 1994 financial statements, the present value of those payments was determined to be $65,763.00. The Department's valuation of G & C Associates was predominately based on the assets and liabilities reported on the partnership's December 31, 1994 financial statements. The partners' capital accounts on those statements totaled $213,849.00. Land, construction, property and equipment collectively valued at $1,879,014.00 on the ., GARLING H SCOTT BOARD DOCKET NO. 0503252 Page 4 of 4 financial statements was increased to $2,485,439.00 to reflect fair market value. Minor adjustments totaling $26,026.00 were also made for loan fees ($6,788.00) and an additional liability ($19,237.00). The Department's valuation recognized the $65,763.00 present value of the obligation to Galen and Jeannette Asper as a component of the $969,083.00 long-term debt. Absent additional argument, the Board must uphold the valuation of decedent's 50% partnership interest in G & C Associates at $400,000.00. Finally, Petitioner has provided no proof that any portion of the non-compete payments had been received prior to decedent's death, However, as $80,000.00 of those payments were payable over a 4-year period, the taxable "present value" of the payments should be reduced from $100,000.00 as determined by the Department, to $85,352.00. Accordingly, it is hereby Ordered that the protest is sustained-in-part. The Department is directed to reduce the value of the non-compete payments from $100,000.00 as assessed as item 2 on Schedule E, to $85,352.00. FOR THE BOARD OF APPEALS JOSEPH R. SLEEK, MEMBER ANY APPLICABLE NOTICE REFLECTING ANY CHANGES TO THE ACCOUNT PURSUANT TO THE BOARD'S DECISION AND ORDER MAY BE MAILED TO YOU BY THE APPROPRIATE BUREAU. ANY APPEAL FROM THIS DECISION MUST BE FILED WITH THE ORPHANS' COURT WITHIN SIXTY (60) DAYS OF RECEIPT OF THIS DECISION. IF YOU REQUIRE THIS INFORMATION IN AN ALTERNATE FORMAT UNDER THE PROVISIONS OF AMERICANS WITH DISABILITIES ACT OF 1990, PLEASE CALL (717) 783-3664, OR FOR SERVICES FOR TAXPAYERS WITH SPECIAL HEARING ,AND SPEAKING NEEDS: 1-800-447-3020 (TT ONLY). IN THE COURT OF COMMON PLEAS OF :CUMBERLAND COUNTY, PENN~,'I,VANI~ IN RE: ESTATE OF ~ cn ~~ - , , H. SCOTT GARLING : NO. ~ ~ '~b --° r ~l -~~ -~~ c~ r~ t~ ~ , ~ ~: - C7 r ~ . ~- ;T I ORPHANS COURT DIVISION = `~' =1~ -^ "~' ~ l '~-~j -' 'f' ~ ~ ,- ~.~i APPEAL FROM DECISION AND ORDER OF ~ t ~ - . _ BOARD OF APPEALS OF THE PENNSYLVANIA DEPARTMEI~' OF ~- , REVENUE . '~''' COMES NOW, Petitioner, Barbara L. Garling-Myers, by and through her attorney, Sally J. Winder, and files this appeal de novo from the Decision and Order of the Pennsylvania Department of Revenue, mailed October 27, 2008, for the following reasons: 1. The Board of Appeals erred in failing to find that decedent's interest in the Valley Baking Company ("VBC") corporation was limited to $27,692, the amount stated in decedent's original Pennsylvania inheritance tax return. 2. The Board of Appeals failed to devalue VBC accounts receivable, as shown on the 1994 corporate tax return, which accounts receivable had been uncollected for a time interval of between one and two years, to a nominal value due to their age and due to the lack of leverage to collect them, since VBC had ceased doing business at the beginning of 1994. 3. The Board of Appeals failed to include as liabilities of VBC federal and state tax obligations totaling approximately $500,000.00. 4. The Board of Appeals failed to exclude from the value placed upon VBC prepaid pension amounts, since said prepaid pension amounts were subject to equivalent claims by the pensioners to whom they were owed. ,~~ 5. The Board of Appeals failed to reduce the value of decedent's interest in VBC under the circumstance that decedent was a minority stockholder of common stock in the corporation. 6. T'he Board of Appeals failed to reduce decedent's interest in VBC in the situation where preferred stockholders of the corporation had priority claims to any of the net assets of the corporation to an extent which rendered decedent's interest as a holder of common stock to a nominal level. 7. The Board of Appeals erred in its failure to give consideration to the statement in the 1994 corporate tax return that the corporation did not have sufficient liquid assets to pay any portion of the corporate tax liability shown as due and owing in that return. 8. The Board of Appeals erred by including in decedent's estate as assets payments under the Martins Pastry Shoppe agreement and/or Stroehmann Bakeries agreement which he had received during his lifetime. 9. The Board of Appeals erred by including in decedent's estate as assets payments of $45,000.00 which, under the terms of the Stroehmann Bakeries agreement, were paid or payable to parties other than the decedent or VBC. 10. The Board of Appeals erred in failing to find that decedent's date of death partnership interest in G & C Associates ("G&C") had a negative value. 11. The Board of Appeals erred in failing to use the concept of liquidation value or dissolution value for G&C when it determined the value of decedent's interest in the partnership. 12. The Board of Appeals erred in failing to include as a G&C liability the full $400,000.00 amount of G&C's financial obligation to Asper since, in the event of 2 dissolution or liquidation of the partnership, that entire amount of $400,000.00 would have been due and owing. 13. The Boazd of Appeals erred in scheduling a hearing on Petitioner's protest and in its unreasonable delay in reaching a decision in Petitioner's case. Petitioner filed her protest in February 2005; no hearing was scheduled until November 2006. After the hearing in November 2006, the Boazd of Appeals delayed its decision almost two yeazs--- or until October 27, 2008. This conduct by the Boazd of Appeals should cause the forfeiture, during the period of unreasonable delay, of any penalties and interest owed on any ultimate inheritance tax liability. 14. Petitioner reserves the right to state additional reasons complained of on appeal in the event she discovers additional reasons during her prepazation of this appeal. Respectfully ;submitted, Sally J. ~nder Attorney for Petitioner, Bazbara L. Gazling-Myers P.O. Box 341 Newville, PA 17241 Telephone (717) 776-6656 3 ~ BOARD OF APPEALS P O Box 281021 HARRISBURG, PA 17128-1021 COMMONWEALTH OF PENNSYLVANIA DEPARTMENT OF REVENUE SALLY J WINDER ESQ 9974 MOLLY PITCHER HWY SHIPPENSBURG PA 17257 IN RE ESTATE OF: -. GARLING H SCOTT DOCKET NO. TAX TYPE: APPEAL TYPE FILE NUMBER: ACN: APPRAISEMENT: PETITION FILED: EXAMINER: MAILING DATE DECISION AND ORDER 0503252 Inheritance Protest 2194-0688 101 12/22/2004 2/28/2005 JEFFREY HOLLENBUSH Direct Dial: (717) 783-7891 Fax: (717)787-7270 Email:jhollenbus@state.pa.us October 27, 2008 The original inheritance tax return as filed valued decedent's 44.44% shareholder interest in Valley Baking Company, Inc. at $27,692.00, the amount received by decedent's surviving spouse under the terms of an after-death Non-Competition Agreement with Stroehmann Bakeries, Inc. The return also valued decedent's 50% partnership interest in G & C Associates at a negative $75,646.00. On December 22, 2004, the Department issued an appraisement and assessment that valued decedent's interests in Valley Baking Company, Inc. and G & C Associates at $302,000.00 and $400,000.00 respectively. Additionally, the Department determined the estate was liable for the payment of tax on $170,600.00 due the decedent under anon- compete clause of the February 16, 1994 Asset Purchase Agreement between Valley Baking Company, Inc. and Martin's Famous Pastry Shoppe, Inc. Tax was also imposed on the payments received by decedent's spouse under the Non-Competition Agreement with Stroehmann Bakeries, Inc. .' GARLING H SCOTT BOARD DOCKET NO. 0503252 Page 2 of 4 Petitioner raises several objections to the assessment. First, Petitioner argues the value of decedent's interest in Valley Baking Company, Inc. was limited to the $27,692.00, received by decedent's surviving spouse under the terms of the after-death Agreement with Stroehmann Bakeries, Inc. Second, Petitioner contends the Department's valuation of G & C Associates fails to consider the partnership's obligation to pay Galen Asper $400,000.00 on an installment basis, beginning in 2002. Finally, Petitioner argues the assessed value of the receivable due the estate under the non-compete clause of the Agreement with Martin's Famous Pastry Shoppe, Inc. must be reduced to exclude payments received by the decedent prior to his death. A hearing was held at the Department of Revenue, Board of Appeals on November 15, 2006. Present on behalf of the estate was Barbara L Carling-Myers, decedent's wife, and John McCrea, Esquire. Hearing Officer Jeffrey Hollenbush represented the Board of Appeals. The Department's valuation of Valley Baking Company, Inc. was based on the corporation's 1994 U.S. Income Tax Return. That return reported the following: Accounts and Notes Receivable $611,143.00 Fixed Assets (Net) $6,055.00 Other Assets $206,356.00 Total Assets $823,554.00 Accrued Federal and State Taxes - $143,000.00 Equity $680,554.00 Decedent's 44.44% interest was therefore valued at $302,000.00 ($680,554.00 times 44.44%). In the appeal, Petitioner states the corporation's balance sheet does not demonstrate the reality that Valley Baking had less than nominal value after its sale of assets to Martin's Famous Pastry Shoppe. Petitioner contends that $356,143.00 of the GARLING H SCOTT BOARD DOCKET NO. 0503252 Page 3 of 4 accounts receivable should be written off as uncollectible, $45,000.00 of the notes receivable was payable to other individuals under the Stroehmann Agreement, and the $124,518.00 prepaid pension is not, on its face, a corporate asset. Petitioner also contends that there were additional Pennsylvania corporate tax liabilities. In the opinion of this Board, the corporation's December 31, 1994 balance sheet would only reflect assets remaining after the February 1994 sale of property to Martin's. Further, cash and receivables were specifically excluded from the sale under Section 1.1.2 of the Agreement. Petitioner has provided no evidence that any portion of the accounts receivable were uncollectible at decedent's death, or that the balance sheet failed to reflect other outstanding Pennsylvania corporate tax obligations. Petitioner has also submitted no evidence that the notes receivable of $255,000.00 included $45,000.00 payable to specific individuals under the Stroehmann Bakeries Non-Competition Agreement. Finally, while a pension plan belongs beneficially to the participants, any prepayment of funds remains an asset of the corporation. The Department's $302,000.00 valuation of decedent's interest in Valley Baking Company, Inc. must therefore be upheld. With respect to G & C Associates, the partners agreed to make monthly payments, commencing no later than June 11, 2002, to Galen and Jeannette Asper until a total payment of $400,000.00 has been made. In the notes to the partnership's December 31, 1994 financial statements, the present value of those payments was determined to be $65,763.00. The Department's valuation of G & C Associates was predominately based on the assets and liabilities reported on the partnership's December 31, 1994 financial statements. The partners' capital accounts on those statements totaled $213,849.00. Land, construction, property and equipment collectively valued at $1,879,014.00 on the GARLING H SCOTT BOARD DOCKET NO. 0503252 Page 4 of 4 financial statements was increased to $2,485,439.00 to reflect fair market value. Minor adjustments totaling $26,026.00 were also made for loan fees ($6,788.00) and an additional liability ($19,237.00). The Department's valuation recognized the $65,763.00 present value of the obligation to Galen and Jeannette Asper as a component of the $969,083.00 long-term debt. Absent additional argument, the Board must uphold the valuation of decedent's 50% partnership interest in G & C Associates at $400,000.00. Finally, Petitioner has provided no proof that any portion of the non-compete payments had been received prior to decedent's death, However, as $80,000.00 of those payments were payable over a 4-year period, the taxable "present value" of the payments should be reduced from $100,000.00 as determined by the Department, to $85,352.00. Accordingly, it is hereby Ordered that the protest is sustained-in-part. The Department is directed to reduce the value of the non-compete payments from $100,000.00 as assessed as item 2 on Schedule E, to $85,352.00. FOR THE BOARD OF APPEALS JOSEPH R. SLEEK, MEMFiER ANY APPLICABLE ~lOTICE REFLECTING ANY CHANGES TO THE ACCOUNT PURSUANT TO THE BOARD'S DECISION AND ORDER MAY BE MAILED TO YOU BY THE APPROPRIATE BUREAU. ANY APPEAL FROM THIS DECISION MUST BE FILED WITH THE ORPHANS' COURT WITHIN SIXTY (60) DAYS OF RECEIPT OF THIS DECISION. IF YOU REQUIRE THIS INFORMATION IN AN ALTERNATE FORMAT UNDER THE PROVISIONS OF AMERICANS WITH DISABILITIES ACT OF 1990, PLEASE CALL (717) 783-3664, OR FOR SERVICES FOR TAXPAYERS WITH SPECIAL HEARING AND SPEAKING NEEDS: 1-800-447-3020 (TT ONLY). n ` t'V C7 7 ~ w IN THE COURT OF COMMON PLEAS OF ~~ %~ 'R ~ ~ ~~' CUMBERLAND COUNTY, PENNSYLVANIA _ ;°~~ i ~- -' '. , r x ~ c ~ ~.: IN RE: , ; Jta a ~ ~ _y r ESTATE OF H. SCOTT GARLING, ORPHANS' COURT DIVISION rr r- '`-'? DECEASED NO. 21 94-0688 ANSWER TO APPEAL FROM DECISION AND ORDER OF BOARD OF APPEALS OF THE PENNSYLVANIA DEPARTMENT OF REVENUE TO THE HONORABLE JUDGES OF SAID COURT: AND NOW, this 5th day of February, 2009, comes the Commonwealth of Pennsylvania, Department of Revenue, through its Office of Chief Counsel and by its Senior Counsel, Lora A. Kulick, and respectfully responds to this Petition as follows: 1. Paragraph one is denied. It contains a conclusion of law to which no responsive pleading is required under the Pa. R.C.P. 2. Paragraph two is admitted in part. It is admitted that the Board did not devalue VBC accounts receivable. Whether this action was proper is a conclusion of law to which no responsive pleading is required under the Pa. R.C.P. 3. Paragraph three is admitted in part. It is admitted that the Board did not include any liabilities that it deemed were not valid for valuation purposes. Whether this action was proper is a conclusion of law to which no responsive pleading is required under the Pa. R.C.P. ,~N' V 4. Paragraph four is admitted in part. It is admitted that the Board included pension amounts in its valuations. Whether this action was proper is a conclusion of law to which no responsive pleading is required under the Pa. R.C.P. 5. Paragraph five is admitted. Whether this action was proper is a conclusion of law to which no responsive pleading is required under the Pa. R.C.P. 6. Paragraph six is admitted. Whether this action was proper is a conclusion of law to which no responsive pleading is required under the Pa. R.C.P. 7. Paragraph seven is denied. It contains a conclusion of law to which no responsive pleading is required under the Pa. R.C.P. 8. Paragraph eight. is der_ied. It contains a conclusion of law to which no responsive pleading is .required under the Pa. R.C.P. 9. Paragraph nine is denied. It contains a conclusion of law to which no responsive pleading is required under the Pa. R.C.P. 10. Paragraph ten is denied. It contains a conclusion of law to which no responsive pleading is required under the Pa. R.C.P. 11. Paragraph eleven is denied. It contains a conclusion of law to which no responsive pleading is required under the Pa. R.C.P. 12. Paragraph twelve is denied. It contains a conclusion of law to which no responsive pleading is required under the Pa. Paragraph seven is denied. 13. Paragraph thirteen is denied. It contains a conclusion of law to which no responsive pleading is required under the Pa. R.C.P. 14. Paragraph fourteen is denied. It contains a conclusion of law to which no responsive pleading is required under the Pa. R.C.P. WHEREFORE, the Commonwealth of Pennsylvania, Department of Revenue respectfully requests that this Court deny the Appeal and sustain the Decision and Order of the Board of Appeals. Respectfully submitted by, Lora I ck Attorney for Respondent PA Department of Revenue Office of Chief Counsel P.O. Box 281061 Harrisburg, PA 17128-1061 Attorney I.D. No. 69436 COMMONWEALTH OF PENNSYLVANIA COUNTY OF DAUPHIN ss The undersigned, being duly sworn according to law, deposes and says that he is the Chief of the Inheritance Tax Division of the Bureau of Individual Taxes for the Commonwealth of Pennsylvania, Department of Revenue, that he is authorized to make this affidavit on its behalf, and that the averments of the foregoing are true and correct to the best of his knowledge, information and belief. aul Dibert Sworn to and Subscribed before me this 5~nday of FPb~ lU~,i~l,a 2009 YT ^ --~ ~~ ~~ ~ Notary u lic My Commission Expires: 1 ~- ~- ~'J~~ COMMONWEALTH OF PENNSYLVANIA Notarlel Seal Amy R. Wise, Notary Public Ciry of Harrisburg, Dauphin Courtly My Commission Expkas lbv. 30, 2010 Member, PenruyryanM Assodagon o! NOlatbs IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA IN RE: ESTATE OF H. SCOTT GARLING, ORPHANS' COURT DIVISION DECEASED NO. 21 94-0688 I hereby certify that I am this 5th day of February, 2009, serving a copy of the foregoing document upon the person and in the manner indicated below, which service satisfies the requirements of Pa. Orphans' Court Rule 5: SERVICE BY FIRST CLASS MAIL ADDRESSED AS FOLLOWS: Sally J. Winder, Esq. P.O. Box 341 Newville, PA 17242 ~~ Lora Kul Attorney or Respondent PA Department of Revenue Office of Chief Counsel P.O. Box 281061 Harrisburg, PA 17128-1061 Attorney I.D. No. 69436 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA IN RE: ESTATE OF H. SCOTT GARLING, _ ORPHANS' COURT DIVISION DECEASED NO. 21 94-0688 PRAECIPE FOR APPEARANCE To Glenda Farner--Strasbaugh, clerk of Orphans' Court: Please enter my appearance fcsi` the Commonwealth of Pennsylvania,. Department of_ Revenue, Respondent in the above-captioned matter. Date: February 5, 2009 ~: - ~ ' ~ ~ _ - ~ i ~ . ~ .._ i. A C'j < _.~ , u ;:~: lD uc~~: '_ ' i C] .. C..J .~ ` ~ .~ ti. ~ cr. O G N Lora A Ku ck Attorney for Respondent PA Department of Revenue Office of Chief Counsel P.O. Box 281061 Harrisburg, PA 17128-1061 Attorney I.D. No. 69436 V V IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA IN RE: ORPHANS' COURT DIVISION ESTATE OF H. SCOTT GARLING, DECEASED NO. 21 94-0688 CERTIFICATE OF SERVICE I hereby certify that I am this 5th day of February, 2009, serving a copy of the foregoing document upon the person and in the manner indicated below, which service satisfies the requirements of Pa. Orphans' Court Rule 5: SERVICE BY FIRST CLASS MAIL ADDRESSED AS FOLLOWS: Sally J. Winder, Esq P.O. Box 341 Newville, PA 17242 c°; -- :,, ~_ _ ~z ~ -~~ , L ._ ~ _ L!_~~1 . ~ lD Y.r~_.. w'~• ~ - M t ~ ~~ ~ -' . ~r_ ~. ].. ~ ~ o [) Lor A. k Attorney for Respondent PA Department of Revenue Office of Chief Counsel P.O. Box 281061 Harrisburg, PA 17128-1061 Attorney I.D. No. 69436 IN RE: ESTATE OF H. SCOTT GARLING, DECEASED IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA N0.21-94-0688 ORDER OF COURT AND NOW, this day of February, 2009, the PA Department of Revenue having filed an answer to the appeal filed in this case, IT IS ORDERED that a de novo hearing will be scheduled before this judge at the reques arty. ~.~ By the C6urt,~ Sally J. Winder, Esquire For Petitioner, Barbara L. Carling-Myers Lora A. Kulick, Esquire For Respondent, PA Department of Revenue sal Edgar B. Bayley, r~~ ~ ~ --"z7 ~ t ''' C 7 ~ 7 'gin 1 -~.1 ~ -;-~ ~ _ + ~v ~ r ~ v p -J ORPHANS' COURT DIVISION COURT OF COMMON PLEAS OF In Re: H. SCOTT GARLING, DECEASED CUMBERLAND COUNTY PENNSYLVANIA NO. 21-94-0688 CERTIFICATE OF SERVICE OF ORDER ORDER DATE: JUDGE'S INITIALS: TIME STAMP DATE: IN RE: ORDER OF COURT SERVICE TO: SALLY J WINDER LORA A KULICK METHOD OF MAILING: ® LISPS ^ RRR ^ HAND DELIVERED ^ OTHER MAILED: 2/9/09 ENVELOPES PROVIDF;D BY: ^ PETITIONER ® JUDGE ^ CLERK OF ORPHANS COURT ecvvTr~' ~rn• METHOD OF MAILING: ^ LISPS ^ RRR ^ HAND DELIVERED ^ OTHER MAILED: ENVELOPES PKOVIDI?D BY: ^ PETITIONER ^ JUDGE ^ CLERK OF ORPHANS COURT ~~. - Deputy Clerk of Orphans' Court ,,. Pennsylvania ~ BUREAU OF INDIVIDUAL TAXES DEPARTMENT OF REVENUE INHERITANCE TAX DIVISION PD BOX 280601 REV-1165 IT DOCEXEC (12-10) HARRISBURG PA 17128-0601 SALLY J WINDER P 0 BOX NOTICE OF ASSESSMENT NEWVI L L E PA 17241 TAX AMNESTY NONPARTICIPATION PENALTY FILE NUMBER :............................ 2194-0688 ESTATE NAME ............................ H S GARLING NOTICE DATE :............................. December 17, 2010 ASSESSED PENALTY DUE:........$2,723.23 Inquiries: 717-787-8327 Special Speaking/Hearing Needs Hotline: 1-800-447-3020 Appeal Due Date: February 15, 2011 If due date is on a weekend, petition may be filed the next business day. BASIS OF ASSESSMENT TAX AMNESTY NONPARTICIPATION PENALTY The account identified above was notified of the opportunity to participate in Pennsylvania's Tax Amnesty program, which ran from April 26 to June 18, 2010. During the Tax Amnesty program, the Department of Revenue waived all penalties and half the accrued interest for anyone who filed and paid state taxes delinquent as of June 30, 2009. In accordance with Act 48 of 2009, any taxpayer who failed to take advantage of this limited opportunity is subject to a 5 percent nonparticipation penalty. Department records indicate this taxpayer did not participate in the 2010 Tax Amnesty program or the taxpayer's tax amnesty application was denied. Therefore, the 5 percent nonparticipation penalty applies to all amnesty-eligible periods and was calculated on the balance of remaining tax, penalty and/or interest. This assessment may be appealed by petitioning the Board of Appeals. However, the board will only consider petitions contesting the 5 percent nonparticipation penalty assessment, because the appeal period(s) expired for the overdue tax, interest and/or other penalties that serve as the basis of this assessment. See reverse for appeals information. The assessed penalty due includes only the 2010 Tax Amnesty 5 percent nonparticipation penalty. To make payment, call 717-787-8327 for the current balance, then make check payable to REGISTER OF WILLS, AGENT. Include the file number on the check, provide a copy of this assessment notice along with the check and mail payment to: REGISTER OF WILLS 1 COURTHOUSE SQUARE n ,w., ~~~~ CARLISLE PA 17013 ~O `-- ; r_ t ~ ~.'".w. ~ -qv~ ``~ ~ ~ • ~ 1 Y f J ~ ~ ~ ~ .- '~ '; Cf ~ rr~~ ~ /' V J ~ ~ y'y V"d { ~ . t l.. 1 y~ •~ {~..` ^qy GENERAL APPEAL INFORMATION An appeal may be filed electronically at www.boardofagpeals.state.pa.us or in writing using a petition form (REV-65) and appeal schedule (REV-39). Forms are available online at www.revenue.state.pa.us or by calling 1-888-728-2937. Each Petition must contain the following: 1. Name and Address of Taxpayer 2. File Number 3. Notice Date 4. Estate Name 5. Assessed Penalty Due (call 717-787-8327 for current amount due) Each Petition must be signed and include an affidavit or affirmation that the facts contained are true and correct. If filing electronically, refer to the "signature" tab on the Board of Appeals online petition form. If filing an appeal by mail, send to: PA DEPARTMENT OF REVENUE BOARD OF APPEALS PO BOX 281021 HARRISBURG, PA 17128-1021 An appeal is considered to be timely if: (a) It is electronically submitted by 11:59 p.m. Eastern Time on or before the appeal due date; or (b) It is submitted in writing and bears a U.S. Postal Service postmark on or before the appeal due date. The Board of Appeals will hold hearings upon petitions as necessary, and a taxpayer will be notified of the time and place of any hearings. Questions to the Board of Appeals may be directed to 717-783-3664. PETITION FOR REASSESSMENT Any taxpayer against whom an assessment is made may petition for a record adjustment electronically or in writing within 60 days of the assessment notice date. Petitions must set forth in reasonable detail the grounds upon which the taxpayer claims the assessment is erroneous or unlawful. The department may require the filing of a bond or other security from anyone petitioning for reassessment. If required, a bond must be issued by a surety company authorized to do business in Pennsylvania and approved by the Insurance Commissioner. FILING OF LIEN The department must receive full payment or an appeal petition in the allotted time or a lien may be filed against the taxpayer for the assessed liability. PAYMENT OF ACCOUNT: The assessed penalty due includes only the 2010 Tax Amnesty 5 percent nonparticipation penalty. To make payment, call 717-787-8327 for the current balance, then make check payable to REGISTER OF WILLS, AGENT. Include the file number on the check, provide a copy of this assessment notice along with the check and mail payment to the appropriate County Register of Wills. OTHER CHARGES • Per Act 40 of 2005, any case referred to a collection agency may be subject to additional fees, including but not limited to attorney's fees and collection fees up to 39 percent of the liability not paid before referral. Other options for voicing objection include appealing to the Orphans' Court or filing election to have the matter determined at the audit of the account of the personal representative. FILE NUMBER :............................ 2194-0688 CALCULATION DETAIL: 2010 TAX AMNESTY NONPARTICIPATION PENALTY ESTATE NAME H S GARLING TAX TYPE: INHERITANCE TAX ACN Liability NPP Penalty ACN Liability NPP Penalty ACN Liability NPP Penalty 101 54,464.60 2,723.23 Total 2010 Tax Amnest Non artici ation Penalt $2,723.23 NOTE: Liability includes tax, interest and/or penalties. NPP Penalty is the 2010 Tax Amnesty 5 percent nonparticipation penalty authorized by Act 48 of 2009. For the current payoff amount call the BUREAU OF INDIVIDUAL TAXES at 717-787-8327.