[Cite as Rambacher v. Testa, 2014-Ohio-1488.]


                            IN THE COURT OF APPEALS OF OHIO
                               FOURTH APPELLATE DISTRICT
                                    LAWRENCE COUNTY

FRANCES L. RAMBACHER,                           :   Case No. 13CA14

        Appellant-Appellant,                    :

v.                                              :   DECISION AND
                                                    JUDGMENT ENTRY
JOSEPH W. TESTA,                                :
TAX COMMISSIONER OF OHIO,
                                                :   RELEASED: 03/27/14
        Appellee-Appellee.
                                               :
                                           APPEARANCES:

Richard F. Bentley, Wolfe & Bentley, L.L.P., Ironton, Ohio, for appellant.

Michael DeWine, Ohio Attorney General, and Melissa W. Baldwin, Assistant Attorney
General, Columbus, Ohio, for appellee.

Harsha, J.
        {¶1}    Frances L. Rambacher appeals from a decision of the Board of Tax

Appeals (“BTA”) that affirmed the Tax Commissioner of Ohio's assessment of taxes,

interest, and penalties of $1,097.47 against her for taxes due in 2006.

        {¶2}    Initially, the commissioner argues, this case was rendered moot because

Mrs. Rambacher’s husband cashed a refund check for the overpayment of taxes that

had been improperly credited to his liability. However, there is no evidence that Mrs.

Rambacher cashed the check or had access to or control of these proceeds. And the

mere fact that her husband cashed the check did not affect her liability for her assessed

taxes, so the case is not moot.

        {¶3}    On the merits of her first, second, and third assignments of error, the

BTA’s determination that the commissioner properly assessed taxes, interest, and
Lawrence App. No. 13CA14                                                                   2


penalties to Mrs. Rambacher for her 2006 taxes is neither reasonable nor lawful. The

Ohio Department of Taxation failed to allocate the joint estimated tax payments

submitted by the Rambachers for their 2006 taxes in accordance with their specified

allocation. By not following its own declared procedure, the tax department erroneously

failed to credit Mrs. Rambacher with the payments allocated by her and her husband,

resulting in the department erroneously determining that she owed taxes, interest, and

penalties for the 2006 tax year.

       {¶4}   Because the BTA’s decision is unreasonable and unlawful, we sustain

Mrs. Rambacher’s first, second, and third assignments of error. We reverse the

decision of the BTA with instructions that Mrs. Rambacher be credited with the amount

of the joint estimated payments the Rambachers allocated to her 2006 income taxes,

resulting in the refund she seeks, with statutory interest. Mrs. Rambacher’s remaining

assignments of error are rendered moot.

                                         I. FACTS

       {¶5}   For tax year 2006 the Rambachers paid $1,400 in joint estimated income

taxes to the Ohio Department of Taxation. On the payment voucher the Rambachers

requested that the tax department allocate $910 of their payments to Mrs. Rambacher’s

2006 taxes and the remaining $490 to Mr. Rambacher’s 2006 taxes. The Rambachers

later submitted their individual tax returns for 2006 as “married filing separately.”

Consistent with their prior allocation of the joint estimated taxes paid, Mrs. Rambacher’s

return indicated a credit of $38 ($872 in taxes-$910 in taxes paid) to be applied to her

2007 taxes and Mr. Rambacher’s return indicated a credit of $21 ($469 in taxes-$490 in

taxes paid) to be applied to his 2007 taxes.
Lawrence App. No. 13CA14                                                                    3


       {¶6}   The tax department ignored the Rambachers’ requested allocation and

instead credited Mrs. Rambacher with only $10 of the $910 she and her husband

requested be allocated for her taxes. The tax department credited the remaining $900

to Mr. Rambacher, resulting in the issuance to him of a $900 refund check, which he

endorsed and deposited. According to the commissioner, the tax department’s failure to

apply the Rambachers’ tax payments as they instructed was due to its computer

system’s inability to “read” the notations by the Rambachers on their payment vouchers

and tax returns.

       {¶7}   The commissioner assessed Mrs. Rambacher $1,076.95 in taxes, interest,

and penalties due for 2006. She objected to the assessment because the tax

department had failed to credit her with the full $910 amount in payments that the

Rambachers requested. The commissioner ultimately overruled Mrs. Rambacher’s

objection based on his determination that she “failed to provide any other information in

support of adjustment” and “failed to demonstrate error in the assessment.” The

commissioner affirmed a final assessment of $1,097.47, including $862 in unpaid taxes,

interest, and penalties against Mrs. Rambacher for the 2006 tax year.

       {¶8}   Mrs. Rambacher appealed the commissioner’s final determination to the

BTA, claiming that the state failed to give her credit for the $910 estimated tax payment.

She filed a motion for a “finding in full” for her for the 2006 tax year, noting that the tax

department had released a lien on the Rambachers’ real property that had been placed

on their property to collect on the tax assessment. The BTA denied the motion,

construed it to be a waiver of the scheduled hearing, and treated the motion as her

merit brief. When Mrs. Rambacher did not appear for the previously scheduled hearing,
Lawrence App. No. 13CA14                                                               4


the commissioner stood on the record. The BTA affirmed the commissioner’s

determination based on its finding that Mrs. Rambacher “failed to meet her burden of

demonstrating the error in the commissioner’s determination.”

      {¶9}   Mrs. Rambacher appeals from the BTA’s decision.

                           II. ASSIGNMENTS OF ERROR

      {¶10} Mrs. Rambacher assigns the following errors for our review:

      1. THE BOARD OF TAX APPEALS’ END [sic] TO THE PREJUDICE OF
      APPELLANT IN DENYING THAT SPOUSES PAYING JOINT
      ESTIMATED TAX MAY AGREE HOW TO ALLOCATE THAT AMOUNT
      PAID WHEN FILING SEPARATE INCOME TAX RETURNS.

      2. THE BOARD OF TAX APPEALS ERRED TO THE PREJUDICE OF
      APPELLANT THAT THE APPELLANT FAILED TO PROVIDE
      INFORMATION TO DISPUTE THE AMOUNT ASSESSED.

      3. THE BOARD OF TAX APPEALS ERRED TO THE PREJUDICE OF
      APPELLANT THAT THE APPELLANT FAILS TO PROVIDE
      INFORMATION TO DISPUTE HER CONTENTION THAT $910.00 HAD
      PREVIOUSLY BEEN PAID.

      4. THE BOARD OF TAX APPEALS ERRED TO THE PREJUDICE OF
      APPELLANT THAT THE APPELLANT WAS HARMED BY THE LATE
      AND UNTIMELY FILING OF THE TRANSCRIPT RECORD IN
      VIOLATION OF O.A.C. §5717-1-09(A).

      5. THE BOARD OF TAX APPEALS ERRED TO THE PREJUDICE OF
      APPELLANT THAT THE BOARD CONSIDERED APPELLANT HAVING
      WAIVED THE HEARING BY IT’S DECISION OF JUNE 4, 2013 IN WHICH
      THE TRANSCRIPT WAS NOT FILED UNTIL JUNE 19, 2013, WHICH
      APPELLANT WAS NOT ABLE TO RESPOND IN VIOLATION OF DUE
      PROCESS.

      6. THE BOARD OF TAX APPEALS ERRED TO THE PREJUDICE OF
      APPELLANT IN THE BOARD NOT CONSIDERING APPELLANT’S
      MOTION FOR RECONSIDERATION AND THE ADDITIONAL EVIDENCE
      OF THE LIEN RELEASE FILED BY THE OHIO DEPARTMENT OF
      TAXATION, AS APPELLANT DID NOT RECEIVE THE TRANSCRIPT
      UNTIL AUGUST 9, 2013, DISCOVERNG THAT THE LIEN RELEASE
      WAS NOT PART OF THE TRANSCRIPT.
Lawrence App. No. 13CA14                                                                   5


                               III. STANDARD OF REVIEW

        {¶11} Under R.C. 5717.04, an appeal from a BTA decision “shall be by appeal

to the supreme court or the court of appeals for the county in which the property is

situate or in which the taxpayer resides.” The court reviews the BTA’s decision to

determine whether it is reasonable and lawful. See Gesler v. Worthington Income Tax

Bd. of Appeals, 138 Ohio St.3d 76, 2013-Ohio-4986, 3 N.E.3d 1177, ¶ 10; Remy v.

Limbach, 4th Dist. Pickaway Nos. 88 CA 5, 88 CA 6, and 88 CA 7, 1989 WL 100112, *6

(Aug. 24, 1989); R.C. 5717.04 (“If upon hearing and consideration of such record and

evidence the court decides that the decision of the board appealed from is reasonable

and lawful it shall affirm the same, but if the court decides that such decision of the

board is unreasonable or unlawful, the court shall reverse and vacate the decision or

modify it and enter final judgment in accordance with such modification”).

        {¶12} “We will uphold the BTA’s determination of fact if the record contains

reliable and probative evidence supporting its determination.” Gesler at ¶ 10, citing

Satullo v. Wilkins, 111 Ohio St.3d 399, 2006-Ohio-5856, 856 N.E.2d 954, ¶ 14. In

addition, we review the BTA’s resolution of a question of law de novo, and we will affirm

its decision only if it correctly applies the law. Gesler at ¶ 10, citing HIN, L.L.C. v.

Cuyahoga Cty. Bd. of Revision, 124 Ohio St.3d 481, 2010-Ohio-687, 923 N.E.2d 1144,

¶ 13.

                                 IV. LAW AND ANALYSIS

                                        A. Mootness

        {¶13} The commissioner initially argues that this appeal should be dismissed as

moot because the Rambachers “cashed the check issued by the Department that
Lawrence App. No. 13CA14                                                                    6


represented a refund of the overpaid estimated income taxes, and accordingly,

foreclosed the possibility of obtaining the relief sought.”

       {¶14} A “ ‘case is moot when the issues presented are no longer “live” or the

parties lack a legally cognizable interest in the outcome.’ ” Los Angeles Cty. v. Davis,

440 U.S. 625, 631, 99 S.Ct. 1379, 59 L.Ed.2d 642 (1979), quoting Powell v.

McCormack, 395 U.S. 486, 496, 89 S.Ct. 1944, 23 L.Ed.2d 491 (1969). “It is not the

duty of the court to answer moot questions, and when pending proceedings * * *, an

event occurs, without the fault of either party, which renders it impossible for the court to

grant any relief, it will dismiss the petition * * *.” Miner v. Witt, 82 Ohio St. 237, 92 N.E.

21 (1910), syllabus; see also Tschantz v. Ferguson, 57 Ohio St.3d 131, 133, 566

N.E.2d 655 (1991) (“Ohio courts have long exercised judicial restraint in cases which

are not actual controversies. No actual controversy exists where a case has been

rendered moot by an outside event”). “Conversely, if an actual controversy exists

because it is possible for a court to grant the requested relief, the case is not moot, and

a consideration of the merits is warranted.” State ex rel. Gaylor v. Goodenow, 125 Ohio

St.3d 407, 2010-Ohio-1844, 928 N.E.2d 728, ¶ 11; State v. Consilio, 114 Ohio St.3d

295, 2007-Ohio-4163, 871 N.E.2d 1167, ¶ 7.

       {¶15} This case is not moot. Although the tax lien that the tax department

placed on the Rambachers’ property to collect the unpaid taxes, interest, and penalties

has been released, the department has not vacated the tax assessment that Mrs.

Rambacher is challenging in this appeal. Nor did Mrs. Rambacher voluntarily pay the

taxes assessed during the pendency of her appeals. Compare Swetland Co. v. Veatt,
Lawrence App. No. 13CA14                                                               7


139 Ohio St. 6, 22, 37 N.E.2d 601 (1941) (taxpayer’s payment of taxes in full was

voluntary, which rendered moot the matter before the county board of revision).

      {¶16} Moreover, there is no evidence in the record or even attached to the

commissioner’s brief on appeal that supports the state’s claim that Mrs. Rambacher

cashed the refund check made out to her husband or that she has any control over the

proceeds of the check that her husband deposited. See Bellamy v. Bellamy, 4th Dist.

Athens No. 10CA45, 2012-Ohio-2780, ¶ 7, citing State ex rel. Cincinnati Enquirer v.

Dupuis, 98 Ohio St.3d 126, 2002-Ohio-7041, ¶ 8 (appellate court may consider

extrinsic evidence outside the record to determine if case is moot). The check attached

to the commissioner’s brief indicates that he alone endorsed the check. (Aee Brief, Ex.

3) Therefore, there is nothing to support the commissioner’s claim that vacating the tax

assessment against Mrs. Rambacher will unjustly enrich her. Thus we conclude, the

merits of this appeal are properly before us.

                  B. Failure to Allocate Joint Estimated Tax Payments

      {¶17} In Mrs. Rambacher’s first, second, and third assignments of error, she

asserts that the BTA erred in denying that spouses paying joint estimated taxes may

allocate the amount to be paid on subsequently filed separate income tax returns, and

in finding that Mrs. Rambacher failed to provide information to support her appeal of the

tax commissioner’s determination. Because these assignments of error are interrelated,

we consider them jointly.

      {¶18} Under R.C. 5747.09(B), “[e]very taxpayer shall make a declaration of

estimated taxes for the current taxable year, in the form that the tax commissioner shall

prescribe, if the amount payable as estimated taxes, less the amount to be withheld
Lawrence App. No. 13CA14                                                                  8


from the taxpayer’s compensation, is more than five hundred dollars.” “Taxpayers filing

joint returns pursuant to [R.C. 5747.08] shall file joint declarations of estimated taxes.”

Id.

        {¶19} R.C. 5747.09 does not specify how joint estimated tax payments are to be

allocated between spouses when they file separate tax returns, i.e., electing the tax

status of “married filing separately.”

        {¶20} The Internal Revenue Service recognizes that spouses can allocate their

payments as they desire for federal income tax purposes. IRS Pub. 505 (Rev. Feb.

2006), Separate Returns (“If you made joint estimated tax payments, you must decide

how to divide the payments between your returns. One of you can claim all of the

estimated tax paid and the other none, or you can divide it in any other way you agree

on”).

        {¶21} The Ohio Department of Taxation has similarly recognized that it will apply

the joint estimated tax payments in the amount requested by the spouses to their

separate tax returns:

        To address married taxpayers who remitted joint estimate payment
        vouchers but subsequently filed their tax returns utilizing the “married filing
        separately” status, ODT will apply the previous year credit carry forward
        and estimated payments to the first return posted through the
        department’s computer system. Routinely, a taxpayer counts on the
        previous year credit carry forward as the first quarter estimated payment
        for the subsequent tax year. Because of this assumption, the previous
        year credit carry forward will always be the first payment applied to the
        first return processed through the ODT system. This process will continue
        with available estimated payments up to the amount requested on the
        estimated payment line of the first return posted to the system.

        If there are funds remaining that were not used to satisfy the amount
        requested on the estimated payment line of the first IT-1040 or the SD-100
        return to pass through the ODT system, any remaining amounts will be
Lawrence App. No. 13CA14                                                                9


       credited against the second spouse’s “married filing separately” or
       “married filing jointly” return.

(Emphasis added.) IT 2006-01 (March 2006)

       {¶22} The department claims that it failed to allocate the estimated payment in

the fashion requested by the Rambachers because its automated voucher system could

not recognize their notations on the preprinted form. This amounts to a concession that

the department failed to follow its own procedures under IT 2006-01. In spite of this

implicit concession, the commissioner claims that any error was rendered moot by Mr.

Rambacher’s cashing of the refund check. But as previously discussed, this case is not

moot. Moreover, the department could seek to recover the sum erroneously refunded

to Mr. Rambacher for the 2006 tax year.

       {¶23} The BTA erred in determining that Mrs. Rambacher failed to provide

sufficient information to support her appeal of the tax commissioner’s assessment. The

record before the BTA included the Rambachers’ tax payment vouchers and tax returns,

which included their request that the tax department allocate $910 of their $1,400 joint

estimated tax payment to Mrs. Rambacher’s return. This information is all that was

needed to support her claim.

       {¶24} Therefore, the BTA’s decision affirming the commissioner’s determination

assessing $1,097.47 in taxes, interest, and penalties against Mrs. Rambacher for the

2006 tax year is neither reasonable nor lawful. Her first, second, and third assignments

of error are sustained.

                          C. Remaining Assignments of Error

       {¶25} In light of our disposition of Mrs. Rambacher’s first, second, and third

assignments of error, her fourth, fifth, and sixth assignments of error, which challenge
Lawrence App. No. 13CA14                                                                  10


the commissioner’s failure to timely file a transcript of the record of the proceedings

before him in the BTA and the BTA’s denial of her request for reconsideration, are

rendered moot. App.R. 12(A)(1)(c).

                                    V. CONCLUSION

       {¶26} Therefore, having sustained Mrs. Rambacher’s first, second, and third

assignments of error, we reverse the decision and order of the BTA and instruct the

department to issue the refund she seeks, together with statutory interest.

                                                            JUDGMENT ACCORDINGLY.
Lawrence App. No. 13CA14                                                                11


                                  JUDGMENT ENTRY


    It is ordered that the DECISION AND ORDER IS REVERSED and that the
CAUSE IS REMANDED. Appellee shall pay the costs.

      The Court finds there were reasonable grounds for this appeal.

      It is ordered that a special mandate issue out of this Court directing the Ohio
Board of Tax Appeals to carry this judgment into execution.

       Any stay previously granted by this Court is hereby terminated as of the date of
this entry.

      A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.

Abele, P.J. & Hoover, J.: Concur in Judgment and Opinion.

                                  For the Court


                                  BY: ________________________________
                                      William H. Harsha, Judge


                                NOTICE TO COUNSEL


       Pursuant to Local Rule No. 14, this document constitutes a final judgment
entry and the time period for further appeal commences from the date of filing
with the clerk.
