Grand Liquor Co. v. Department of Revenue

MR. JUSTICE UNDERWOOD,

also dissenting:

It seems to me the court has ignored the clearly expressed intent and meaning of section 4 of the Retailers’ Occupation Tax Act (Ill. Rev. Stat. 1973, ch. 120, par. 443). That section provides that the corrected return “shall be prima facie correct and shall be prima facie evidence of the correctness of the amount of tax due ***. Such reproduced copy [of the Department’s record relating to the corrected return] shall without further proof, be admitted into evidence *** and shall be prima facie proof of the correctness of the amount of tax due ***.” This case, where the taxpayer has, despite continued assurances to the contrary, failed to produce any books or records over a period of 14 months and four hearings, is an example of the difficulties faced by the Department in determining the correct tax in cases where taxpayers deliberately frustrate any attempt to correct what the Department believes to be either erroneous or intentionally falsified returns.

The statute clearly states that the Department’s record and the corrected return, without further proof shall be admitted into evidence and constitute prima facie proof of the amount of tax due. There is no requirement that a corrected return be based upon information which is admissible into evidence (Du Page Liquor Store, Inc. v. McKibbin (1943), 383 Ill. 276, 280), and the taxpayer has the burden of producing evidence to overcome the prima facie case (Fillichio v. Department of Revenue (1958), 15 Ill. 2d 327, 333; Novicki v. Department of Finance (1940), 373 Ill. 342, 345). The Department is not required to produce its records upon which a corrected return is based where the taxpayer presents no evidence to overcome the prima facie correctness of the return. (Tatz v. Department of Finance (1945), 391 Ill. 131, 134-35.) A corrected return based on “information received from a reliable source” establishes a prima facie case for the Department, and “[i]t is clear from the Statute that the Department was not obligated to produce the person who prepared the corrections of returns for cross-examination. Once the corrections of returns *** were admitted into evidence at the hearing, the Department had established its prima facie case.” Rentra Liquor Dealers, Inc. v. Department of Revenue (1973), 9 Ill. App. 3d 1063, 1066, 1068-69.

Despite this consistent precedent that a corrected return is deemed to be prima facie proof of the Department’s case, the majority opinion now holds that a corrected return based on information received from a computer printout is not prima facie evidence unless a proper foundation has been laid for it. This, it seems to me, is simply not consistent with the statutory direction that the corrected return shall be admissible and constitute prima facie evidence of the tax due “without further proof.”

The court’s opinion states, apparently in an effort to justify the result, that prior to the advent of computer use, auditors conducted personal investigations and were available for cross-examination at the hearing. There is, of course, no such statutory requirement, even though the practice may be a desirable one; and this record indicates that the investigations which were attempted were fruitless because the taxpayer’s books and records were never made available to the auditor. His visits to the business premises of the taxpayer were unsuccessful, and his telephone calls equally so.

A corrected return can at best only be an estimate where the taxpayer, as in this case, refuses to cooperate. Until this opinion, the Department established a prima facie case when it introduced a copy of its record and corrected return. In the absence of constitutional prohibitions (and none are argued here) which invalidate application of this statutory procedure to computer printouts, this court should not amend that statute to require a different procedure. The effect of this decision, it seems to me, will be to shift the focus of the hearing from determining the correct tax to determining the propriety of the Department’s preparation of the corrected return.

I would reverse the judgment of the appellate court and affirm the circuit court of Cook County, which upheld the Department’s assessment.