Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 465.1900


465.1900 Validity of Waiver of Limitation. An auditor who originally spoke to the taxpayer was referred to the taxpayer's accountant. Later, when the auditor presented the waiver of limitation document to the accountant, he asked the accountant whether or not the accountant had the authority (i.e., a power of attorney) to sign the waiver on the taxpayer's behalf. The accountant indicated that he did. The waiver of limitation document states, in part, that "Signatory if not a corporate officer, partner, or owner certifies under penalty of perjury that he holds a power of attorney to execute this document." In addition to the above certification on the waiver form, the accountant signs the taxpayer's monthly sales and use tax returns as "taxpayer's controller." Furthermore, in the taxpayer's correspondence with the Board concerning a problem on a sales and use tax return, the letter was signed by the accountant as "C.P.A. Controller."

Under the facts described, the taxpayer is now estopped from denying the authority of the accountant to sign the waiver of limitation form. If a third person reasonably believes an agent to possess the power to bind his principal and the agent has been held out to the third person by the principal as empowered to transact the principal's business, the principal cannot later claim the authority was not conferred against the third parties affected thereby. In this instance, the accountant as taxpayer's agent was held out as person who had authority to deal with the Board regarding the audit. Additionally, he has consistently been held out as a corporate officer (the controller). Finally, the waiver form was signed after the accountant indicated he had the authority to do so. 4/5/83.