REBUTAL Final Draft July 21 2011

7/28/2019 REBUTAL Final Draft July 21 2011

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West Virginia Department of Tax & RevenueAttn: Craig Griffith1001 Lee St. EastCharleston, WV 25301

July 22, 2011

To Whom It May Concern:

In response to the results of the level one grievance hearing I am filing an appeal to leveltwo. My rebuttal is regarding the remaining two points of the reprimand and my additionalpoints included in the grievance as filed. Mr. Stiles did remove point one regarding theearly arrival. However, I disagree with Mr. Stiles decision to uphold the additional two

points of the reprimand and dismiss my contributing factor points as red herrings. I have

attached a full complete copy of Mr. Stiles letter for your review. (See attachment A)

(2) Not having in your possession the proper documentation regarding your

assigned account.

Mr. Stiles: The Grievant avers that he was not instructed regarding the documents that hewould be expected to bring to a business revocation hearing. Stiles goes on to cite an e-mail I sent my Supervisor, Kim Silvester, requesting a list of everything I needed to takewith me to the hearing.

See attachment B (Excerpt from Stiles Decision)

Mr. Stiles is making the assumption that because Kim Silvester said, I would just take thefile w/you, that there was a drawer in my office that contained a file that had a draft of

each contact, payment plan set up, etc that I had with this Taxpayer. The fact is, that is nothow all cases are handled now. With the implementation of a new 22 million dollar plussoftware system called GenTax, we have been encouraged to enter all such transactionsinto the computer so that anyone authorized to access the system and having a need toknow the status of a certain account could do so. When GenTax was first implemented,there was a gigantic effort to convert all account information from the old AccountsReceivable System. This meant that our computers were now the case files for a taxpayerand open to everyone with access to GenTax. The Revenue Agent IIs at North Central

Regional Office were instructed by Mike Coutz to go through our files and correctaddresses, show what level of contact that we had made with the Taxpayer, none were tobe listed as initial, etc. Generally speaking, we were to bring them up to date.

Consequently, a lot of the old paper files were purged. Mike Coutz participated in theshredding of old case files by transporting a least 4 very large boxes of case files, (thecontents of two large 4-drawer filing cabinets and one 2-drawer filing cabinet) toCharleston to be shredded.


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Things that can be known about an account by casually observing the taxpayers profilepage are:

Current balances of each tax type Bad checks Indicators Liens Indicators Levies Indicators Payment plans Indicators Holds Indicators Payment Plan Indicators Notices such as 10-day letters, revocations, and non renewal Indicators Account notes from Taxpayer correspondence, liens recorded or released, Notes

added by different Tax department employees.

Attachments of letters or other documents received or sent regarding the Taxpayerand his or her tax accounts.

Returns filed and paid Any returns or payments missing or misapplied. Additional payments on past due and delinquent taxes Collection activities such as levies sent and monies collected from such ventures.

Prior to the GenTax System multiple people would have parts of a taxpayers file meaningno one particular person had a complete file. Taxpayers with specialty taxes such as IFTA,Excise, and Tobacco were handled by those respective units prior to GenTax. Field agentsdid not work these particular tax cases. Now with GenTax anytime someone adds a note orattaches a document anyone that accesses the taxpayers account can view everythingregardless of who added it. This makes it easier to see all types of taxes. However, some of

the specialty taxes are still handled by the corresponding units. One of the benefits ofGenTax was that everyone had access to the taxpayers file. There was a great effort toattach everything to the taxpayers account in GenTax to become paperless.

Mr. Stiles: Additionally, the Grievant asserts that he never received training in how toprepare for a business revocation hearing.

The respondent, Mike Coutz argues that I have been trained, and Mr. Stiles agreed because Iattended the Compliance Division Annual Meeting, October 14, 2009 October 16, 2009.Mike Coutz presented a printed Agenda showing that one of the topics was Business

Revocations, and that the employees of the Compliance Department were given actualnotice of the Divisions procedures and policies regarding the conduct of a business

revocation hearing. This is the only proof of training Mike Coutz presented.

The thing that is left out of this argument is that, when asked, the gentleman that gave thispresentation said that he prepared for and spoke for only 30 minutes. To my knowledge noother training has been conducted as a refresher course for current employees or for anynew employees since that meeting in October of 2009.


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It can be substantiated that the most egregious action the Compliance Division can takeagainst a business owner is to prevail at a revocation hearing. When we take a businesslicense we take the owners livelihood. We take the owners investment. If the business was

to be his retirement, it is gone. The list goes on and on. Considering the damage anddestruction a successful business revocation can cause a family it is perplexing that MikeCoutz, would submit that 30 minutes of training is adequate.

A Revocation Hearing is a legal procedure that involves an:

OTA Judge: Education; 4 years under graduate school 3 years Law School. Attorney/s: Education; 4 years under graduate school, 3 years Law School. Revenue Agent II: Education: A 4 year under graduate degree, one 30-minute

presentation at an annual meeting.

(3) Mr. Stiles:Respondent, Mike Coutz alleges that Grievant, Hudson Yates gavemisleading testimony under oath at a judicial hearing before the West Virginia Office of TaxAppeals. Specifically, it is alleged that the Grievant stated that the Taxpayer had defaultedon three payment plans into which he or she had entered with the Tax Department, whenin fact no such plans existed.

The above statement is not what Mr. Coutz alleged in my letter of Reprimand.

Mike Coutz: Testifying under oath as to having three signed payment agreements withnone completed in GenTax or prepared manually. The key word is SIGNED.Judge Piper was interested in signed payment plans. Not even the Tax Payer used the wordsigned.:

The transcript of the OTA hearing indicates that it was State Tax Attorney Danielle Boydwho testified that there were three signed payment agreements.

Danielle Boyd has access to the same computer information as supervisors, agents, andCompliance Division Directors/ Assistant Directors. Although all of the above wereinvolved in the preparation of this case in some capacity, it appears that the informationavailable was misinterpreted. I do not know how much training Danielle Boyd has had inGenTax, but because Revenue Agents have to report each month how many payment plansthey have written to their supervisors. It is a given that supervisors can tell when apayment plan is in GenTax. These reports go to Mike Coutz who also knows where to lookfor a payment plan. Mike Coutz is the person in Compliance that handles all revocationhearings and is the liaison between OTA, Compliance Legal and the Supervisors. Mike Coutz


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is also the person in Compliance that approves conditional payment plans for Letters ofGood Standing. These letters are issued to multitudes of taxpayers on a yearly basis. Mostare issued to obtain an alcoholic beverage license, which was the case with this particulartaxpayer. These letters are issued to the Taxpayer by the Tax Department stating they arein good standing with the Tax Department as well as Workers Compensation and The

Unemployment Insurance Commission. Mike Coutz approves each conditional letter. It isonly approved if certain conditions are met, such as a payment arrangement. This Taxpayerhas received such a letter annually for the past three years, all approved by Mike Coutz. Hisissuance of such letters indicates he has approved, along with the taxpayer, of thearrangements made, whether written or otherwise noted on the taxpayers account.

When Danielle Boyd ask me if there 3 payment plans I said yes because in the five yearsthat I have been with the Tax Department it has been Accepted Practice that if a

taxpayers liability would not fit the parameters of GenTax we could accept regularpayments. Anyone with access to GenTax would be able to see notes regarding paymentplans three times by three different people. All three times Mike Coutz approved a

conditional Letter of Good Standing. This letter is conditional based upon the Taxpayerentering into a payment agreement. If Mike Coutz approved these good standing letterswere the conditions not verified? His tacit silence on the verification indicates his approval.Mike Coutz obviously looked over the account carefully to make sure a payment plan wasin play. Had that payment plan been written he could have viewed a copy and read theparticulars. In this case there was no written payment plan. Mike Coutz three timesapproved a letter of good standing and did not find a written payment plan in the taxpayersaccount.

If a Taxpayer regularly, month after month, sends to the Tax Department $1,000.00 permonth and the Tax Department retains that $1,000.00 and credits his account as $1,000

paid, any reasonable person, when asked, would call it a payment plan.

Compliance has been silent as to what we are to call such payments and to my knowledge;no one has complained that they are listed as payments in the computer. Also we havenever been instructed to return the payment. Even Compliance Attorney Jan Mudrinich atthe OTA Hearing said that we accept any payment.

Mr. Stiles: In his defense, the Grievant raised allegations of disparate treatment and ahostile work environment. He writes, We fail to see how the Grievant can claim a hostile

work environment when the testimony shows that he works alone in a satellite office.Furthermore, the incidents that the Grievant points to as evidence of a hostile work

environment occurred more than two years before the events that led to this to thisgrievance. Therefore, we find no merit in the Grievants claim of a hostile workenvironment.

Mr. Stiles response to the hostile working environment being without merit is inaccurate.

Mr. Stiles fails to see that disparate treatment does not have to be in person. Harassmentcan also occur via telephone conversation, emails, and yes, physical confrontation. Duringthat time every time Mike Coutz would call me and he would already have an irritated tone


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and demeanor towards me before I even responded to crux of the phone call. Events thathappened beginning two years ago are directly related to the manifestation of thisdisciplinary procedure. Issues and incidents raised during the level 1 hearing are notexhaustive of hostile actions toward me by Mr. Coutz. I made no complaint two years agofor fear of retribution considering Mike Coutz was the Assistant Director of the Compliance

Division. The perceived cost to press the issue was greater than cost to remain silent forfear of further harassment. Just because I remained silenton this matter doesnt meanothers have as well. On several occasions when Mike Coutz chastised me for a perceivederror my supervisor intervened to explain that the action I was taking had been suggestedor approved by said supervisor.

The disparate treatment has been occurring from the fist day I met Mike Coutz andcontinues to this day. I have no idea why it began almost immediately. Mr. Coutz hasavoided and taken an instant dislike to me from the beginning. There was a time MikeCoutz was making regular visits to the North Central Regional Office in Clarksburg, WV.Prior to this I had a great friend and coworker in Connie James. When I was at the

Clarksburg office Connie James and I routinely went out to lunch together. Connie Jamesand I would talk nearly every morning and through out the day. Anytime she had aquestion regarding GenTax or anything else she would call me and I would try my best tohelp her. While he was visiting he would join Connie and I at lunch. This abruptly stopped.I was no longer asked to join this regular lunch outing. Mike Coutz and Connie James,however, did continue this lunch outing on a regular basis alone. At this same time ConnieJames abruptly stopped talking to me and calling me for help. I can only conclude that MikeCoutz had said or done something to poison Connie James against me. Roger Shaw, theother agent in the office was a good friend as well, during this same time he became colderand more distant.

I was only left with one friend in the office, Janet Swinler. She treated me as an equal. MikeCoutz went so far as to attempt to poison her against me by calling her shortly after therevocation hearing at the heart of this proceeding to tell her he was going to fire HudsonYates. This occurred well before I received my official letter of reprimand. He also asked

her, Janet Swinler, to talk to me not my current Supervisor, Kim Silvester. Janet Swinlerspoke to Kim Silvester and relayed to me that Kim stated, its certainly not imminentregarding my termination.

I was stunned to learn that Mr. Coutz testified that his visit to my office in Elkins onFebruary 3, 2010 that this was my verbal warning for poor job performance. Mike Coutztold me that he was visiting every office and meeting with every agent to discuss their high

risk cases and action that have and should be taken. My Supervisor, Kim Silvester was alsopresent at that time.

I spoke to Kim Silvester at 1:30pm on June 24th, 2011 about a payment plan on anothertaxpayer. During this same conversation I asked her if she remembered when she was herewith Mike Coutz discussing my cases, referencing the date of February 3, 2010, and herresponse was yes. I continued asking if she was aware thatthis was a disciplinary visit fora verbal warning on poor job performance. She responded with no. She also continued


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with that she wasnt aware and it was never mentioned of it being a disciplinary visit. I ask,

if this visit was as serious as a verbal warning, as Mike Coutz claims, for poor jobperformance, should my direct supervisor be aware of what is happening?

I even made a note after they had left my office regarding the visit. I had felt extremely

nervous with Mike Coutz here. It was so tense that after he had left I experienced a panicattack for the first time. I didnt know what was happening until I spoke with a doctor. I

later phoned Kim Silvester when she returned to her office in Clarksburg to talk about thisvisit. She relayed to me that Mike Coutz was pleased with my progress with my high risk,that I had made a dent and to keep working on them. Again, I ask, If this was a review forpoor job performance, why would he make such a statement regarding my work. Thatstatement is an indication that I was doing my job to his satisfaction.

Kim Silvester also testified at the Level 1 hearing that I was doing an adequate job andwould rate me as such on job performance. She also stated, when asked if I had doneeverything she asked me to do, her response was yes.

Additionally, immediately following the hearing Mike Coutz was enraged at me and wasyelling at me that it was my fault the hearing was dismissed. That I screwed the pooch

from beginning on this one. This was said in front of Danielle Boyd and Jan Mudrinich aswe were riding down the elevator with the taxpayer and walking back from the Office ofTax Appeals to the Revenue Center. Mike Coutz immediately blamed me, me alone, for thehearing being withdrawn. I cannot explain to you how mortified I was being publiclyhumiliated in front Danielle Boyd and Jan Mudrinich as well as the brief ride on theelevator with the taxpayer.

When I arrived in Charleston at 10am that day and the first words out of Mike Coutzsmouth was, What are you doing here at 10am for a 2pm show cause hearing I, at that

point, knew it was going to be a challenging day. This is just the most recent example ofhow Mike Coutz addresses me. I have never heard him speak to anyone else in that tone.After I had met Danielle Boyd to discuss the case for 20 minutes and she made no mentionor request for documents, of which I was more than willing to provide on the spot from theTaxpayer file in GenTax as that was my reason for arriving early. I had a very uneasy feelingfor the direction of the hearing. Im not sure what I could have done as a witness. I left it in

the hands of the attorney, in good faith, that she was the professional and moreexperienced than I in court.

Mr. Stiles: The Grievant raises another red herring issue in his Statement of Grievance,concerning his supervisors having printed the Grievants name on an Offer in Compromise

form for a taxpayer, indicating that the Grievant had recommended acceptance of the offer.Testimony indicated that these offers must ultimately be approved by the TaxCommissioner, and that the Revenue Agents recommendation is not binding in any way.

We fail to see any harm to the Grievant arising from his name being entered on thedocument without his knowledge or approval. No attempt was made to forge the Grievants


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signature- his name was printed in block letters that in no way resembled his distinctivesignature- and the appearance of his name on the document in no way committed him toany action. It appears that the purpose was simply to indicate who the Revenue Agent wason that case. The Grievant failed to show what relevance, if any, this issue had to the actsfor which he was being reprimanded.

This is certainly not a red herring issue as Mr. Stiles stated. It is directly related to histreatment towards me from the beginning. It concerns me greatly that Mike Coutz feelscomfortable applying anyones name to a legally binding document. Mike Coutz made no

effort to obtain my signature. I had no opportunity to sign my own name to thesedocuments. It is also my understanding that Mr. Coutz has affixed no one elses signature to

a document. Mr. Stiles also states that these offers are ultimately approved by the TaxCommissioner and a Revenue Agents recommendation is not binding. That said, MikeCoutz affixing my name to this document was completely unnecessary. Whatever MikeCoutzs intent was isnt the issue. The issue is when someone unfamiliar with my signature

viewing this documentand reading the section that starts with We recommend that my

name appearing on that line is interpreted as a signature. Im sure if you asked anyonewho signed this document? that I would be included along with those that actually signed.

It is my contention that any reasonable person would interpret my name as a signature,regardless of it being printed in block letters. Additionally, if you look closer you will see afew of the letters are jointed together. I know I would interpret it as a signature because Ihave friends that actually sign their checks by printing their names. The bank accepts thisas a signature as does the merchant accepting the check as payment.

It could be successfully argued that an Offer In Compromise is the Compliance Divisionsdocument that has the greatest potential to receive outside scrutiny and get the attention

of a Legislative Auditor.

An Offer In Compromise is a legal and binding agreement between a Tax Payer and theWest Virginia State Tax Department that states that the tax department is willing to acceptan amount other that what is actually owed.

While it is true that an OIC cannot legally be granted without the signature of the TaxCommissioner, and his/her signature is the only one necessary,the persons who composed this document had good reason to begin the signature sectionwith We recommend ... The two signatures that follow are Tax Division Employee andUnit Manager. (Please see attachment C) These people are Compliance Departmentemployees that with the signing of their name they are declaring that they have read this

document and agree that with the information given, that it should go forward to the LegalDepartment for signature. The criterion that we use in making this decision is what is inthe best interest of the State of West Virginia.

Mr. Stiles:the appearance of his name on the document in no way committed him to anyaction. It appears that the purpose was simply to indicate who was the Revenue Agent onthat case.


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I submit that who prepared the document is irrelevant. Which Revenue Agent is assignedto the area in which the Taxpayer lives is irrelevant. When Mr. Coutz affixed my name tothat document he was falsely giving the appearance that:

1) That at some point that document was in my possession; The truth is that I never saw

this document before it was accepted by the Tax Commissioners Agent, Jeff Oakes.

2) That I had read that document; The truth is that I never saw this document before it wasaccepted by the Tax Commissioners Agent, Jeff Oakes

3) That if the facts contained in that document were true, I believed that the accepting ofthis offer was in the best interest of the State of West Virginia. The truth is, I would nothave approved this OIC. I do not believe that the taxpayer owed this money. I believed thetaxpayer, like many who had gone before him, should have been allowed to file amendedreturns and any money we collected through a wage levy should have been applied to hisPersonal Income Tax liability.

Mr. Stiles: No attempt was made to forge the Grievants signature- his name was printed inblock letters that in no way resembled his distinctive signature- and the appearance of hisname on the document in no way committed him to any action. It appears that the purposewas simply to indicate who was the Revenue Agent on that case. The Grievant failed toshow what relevance, if any, this issue had to the acts for which he was beingreprimanded.

If I am to believe Mr. Stiles finding that Mike Coutz made no attempt to forge my name,then his defense statement should have included the answers to the following questions.

Why after affixing my name to this document did he not include by Mike Coutz? This, aseveryone knows, is the accepted way to attach a signature when the signatory is notavailable.

Why did Mike Coutz not call me to tell me that he had signed my name?

Why, when Kim Silvester learned that Mike Coutz signed my name, did she alert me of hisunprecedented action? As time went on Kim told me there were two other times that Mr.Coutz signed my name. (Please see attachment C)

Why, when I posted a comment in GenTax that it was not my signature on the OIC attached

to the account did the Compliance Division Secretary put the explanation for the signing ofmy name to the OIC and not Mike Coutz? Please do not take my last question as a criticismof the secretary. I have nothing but admiration, praise and thanks for all the wonderfulhelp I have received from her. It was Mike Coutz that owed the explanation and he shouldhave been the one to put it in writing.


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I would be interested to know that whoever signed for the legal department and Jeff Oakesfor the tax commissioner would have signed the document had they known my signaturehas been forged?

Additionally, after protesting and making it clear that I do not appreciate my name being

forged to a document Mike Coutz, on May 13, 2011 signed my name again to two additionalOffers In Compromise. This illustrates the blatant disrespect Mike Coutz has had toward mefrom day one. No attempt was made to obtain my signatures on these documents either.He was so bold as to sign my name again after I made my objections known and after thereprimand was sent to me.

Mr. Stiles: The Grievant failed to show what relevance, if any, this issue had to the acts forwhich he was being reprimanded.

The relevance is that to the best of my knowledge no other Revenue Agent II has had theirname signed to a document that they had voiced opposition to. My supervisor knew my

reservations as to whether or not the taxpayer was in business when the estimated liabilitywas accrued. Kim said that when she told Mr. Coutz of my concerns that he said he was notgiving back the money we had received in a wage levy and that the money was not to betransferred to pay personal income tax liability.

Within 15 days of the first incident of my signature being applied to an Offer andCompromise came the OTA Hearing. Mike Coutz, made no attempt to explain why we couldhave payment plans that were not in writing on this account, a fact that he definitely knewbecause for 3 consecutive years he, personally, had approved a Conditional Letter of GoodStanding that was conditioned on the fact that a payment plan was in place. The procedureis that when he is called by someone in the unit that issues these letters, he checks the

account to see if all returns have been filed and most importantly, if there is an acceptablepayment plan in place to meet the conditions of the Good Standing. Three times Mike

Coutz found no written and signed payment plan and three times Mike Coutz blatantlyviolated Compliance policy by awarding a conditional letter of good standing.

Another 10 days later, after the OTA hearing, on May 9, 2011 MikeCoutz called JanetSwinler, Revenue Agent II, in Morgantown and said that he was going to Fire Hudson

Yates because I had lied under oath. He told her that I had testified that I had 3 signed

payment plans. Mr. Coutz did not tell the truth as the transcript of the OTA hearing proved.Two days later on May 11, 2011 at 4:48pm Janet spoke to Kim Silvester when shementioned that my firing certainly isnt imminent.

It was the States Attorney that swore under oath that we had 3 signed payment plans. Thekey word is signed. Mike Coutz had to be aware that the payment plans were not signed. Ifthe payment plans were signed, Mike Coutz would have found them in the computer allthree years that he checked before he approved a Conditional Letter of Good Standing.There were no signed payment plans. This account is one that was based Accepted

Practice. Mike Coutz was fully aware of the written policy and yet he still approved theConditional Letters of Good Standing.


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Below is a timeline to show the correlation of events.

March 10, 2011- My name was forged to the first Offer and Compromise

March 24, 2011- The document mentioned above was attached to the taxpayers accountin GenTax.

March 29, 2011-I added the note to the account that this wasnt my signature

April 13, 2011-Paula Junkins adds a note that Mike Coutz applied my name and it wasntmeant to be interpreted as a signature.

April 28, 2011- The revocation hearing was conducted that prompted this reprimand.

May 11, 2011- Mike Coutz prepares and sends me via certified mail my letter of

reprimand.

May 13, 2011- Mike Coutz adds my signature to two more offers and compromise.

May 19, 2011- I received the letter of reprimand.

Respectfully,

J. Hudson Yates

REBUTAL Final Draft July 21 2011

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