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2012 MINUTES OF THE STATE BOARD OF EQUALIZATION 195

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2012 MINUTES OF THE STATE BOARD OF EQUALIZATION 195
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
195
Tuesday, October 23, 2012
The Board met at its offices at 5901 Green Valley Circle, Culver City, at
9:40 a.m., with Mr. Horton, Chairman, Ms. Steel, Vice Chairwoman, Ms. Yee and Mr. Runner
present, Ms. Mandel present on behalf of Mr. Chiang in accordance with Government Code
section 7.9.
CORPORATE FRANCHISE AND PERSONAL INCOME TAXES HEARINGS
Gerald J. Marcil and Carol L. Marcil, 458832
2001, $307,466.00 Tax, $14,591.81 Post-Amnesty Penalty
For Appellants:
Gerald J. Marcil, Taxpayer
Layton L. Pace, Attorney
For Franchise Tax Board:
David Gemmingen, Tax Counsel
Michael Cornez, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issue:
Whether appellants’ limited partnership satisfied the requirements for a “likekind” exchange pursuant to Internal Revenue Code (IRC) section 1031.
Respondent’s Exhibit: Miscellaneous Documents (Exhibit 10.1)
Action:
Upon motion of Ms. Yee, seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board submitted the
appeal for decision.
Exhibits to these minutes are incorporated by reference.
Thomas L. Cantor and Cheryl A. Cantor, 597487
2009, $51,503.00 Claim for Refund
For Appellants:
Thomas L. Cantor, Taxpayer
Melody S. Thornton, Representative
For Franchise Tax Board:
Eric Yadao, Tax Counsel
Karen Smith, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issue:
Whether appellants have demonstrated that they are entitled to a refund of the
underpayment of estimated tax penalty.
Action:
Upon motion of Ms. Yee, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board submitted the
appeal for decision.
JK Group, LLC, 448306
2001, $10,254.00 Claim for Refund
2002, $9,914.00 Claim for Refund
2003, $9,278.00 Claim for Refund
2004, $7,977.00 Claim for Refund
2005, $7,337.00 Claim for Refund
For Appellant:
James I. Kozen, Taxpayer
Edwin P. Antolin, Attorney
For Franchise Tax Board:
Todd Watkins, Tax Counsel
Michael Cornez, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
196
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Tuesday, October 23, 2012
Issues:
Whether the appellant operated the Burger King restaurant businesses during the
taxable years 2001 through 2005, and therefore is obligated to pay LLC fees based upon the total
income generated from those businesses.
Whether the proposed assessment of the LLC fees is unconstitutional.
Whether the refund amounts at issue are properly calculated.
Appellant’s Exhibit:
Miscellaneous Documents (Exhibit 10.2)
Action:
Upon motion of Ms. Yee, seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board submitted the
appeal for decision.
The Board recessed at 12:27 p.m. and reconvened at 1:50 p.m. with Mr. Horton,
Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel present.
SALES AND USE TAX APPEALS HEARING
Mordehay Rabinowiz, 489446 (AC)
7-1-03 to 6-30-08, $26,390.83 Tax, $6,621.22 Fraud Penalty
For Petitioner:
Mordehay Rabinowiz, Taxpayer
Niel Ruben, Representative
Leron Rabinowiz, Witness
For Sales and Use Tax Department:
Scott Lambert, Hearing Representative
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether adjustments are warranted to the amount of unreported taxable sales.
Whether adjustments are warranted to the allowance for exempt sales of food.
Whether adjustments are warranted to the disallowed deduction for sales tax
included in reported total sales.
Whether the Department has established fraud by clear and convincing evidence.
Action:
Upon motion of Ms. Yee, seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be submitted for decision.
The Board recessed at 2:46 p.m. and reconvened at 2:56 p.m. with Mr. Horton,
Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel present.
LEGAL APPEALS MATTERS, CONSENT
With respect to the Legal Appeals Matters Consent Agenda, upon a single
motion of Ms. Yee, seconded by Ms. Steel and unanimously carried, Mr. Horton, Ms. Steel,
Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board made the following orders:
Mica Industries, Inc., 352527 (EA)
10-1-01 to 3-31-05, $0.00 Tax, $0.00 Negligence Penalty
Action:
Redetermine as recommended by the Appeals Division.
Ibrahim Fayez Saloum, 533106 (EH)
9-1-06 to 6-30-09, $33,094.56 Tax, $3,309.46 Negligence Penalty
Action:
Redetermine as recommended by the Appeals Division.
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
197
Tuesday, October 23, 2012
Luis Gerardo Mendivelso Torres, 522897 (EA)
4-1-06 to 6-30-09, $14,996.46 Tax
Action:
Redetermine as recommended by the Appeals Division.
PAD, 460686 (EH)
10-1-04 to 10-23-06, $36,646.14 Tax, $0.00 Negligence Penalty
Action:
Redetermine as recommended by the Appeals Division.
Dolce Enoteca, LLC, 532495 (AS)
1-1-07 to 9-30-09, $41,239.57 Tax, $4,123.96 Negligence Penalty
Action:
Redetermine as recommended by the Appeals Division.
Luis Alfredo Miranda and Eva Guardado, 528936 (AC)
7-1-06 to 6-30-09, $47,569.61 Tax, $4,756.94 Negligence Penalty
Action:
Redetermine as recommended by the Appeals Division.
The Entertainment Group (TEG), Inc., 533444 (AA)
7-1-05 to 6-30-08, $144,934.35 Tax, $14,675.50 Finality Penalty
Action:
Redetermine as recommended by the Appeals Division.
Behzad Bandari, 518636, 607169 (AR)
4-1-05 to 10-13-05, $7,943.00 Tax, $794.30 Finality Penalty
4-1-05 to 10-13-05, $13,614 Claim for Refund
Action:
Redetermine as recommended by the Appeals Division.
Guillermina Ahumada and Jose A. Ahumada, 425152 (AR)
7-1-03 to 6-30-06, $0.00 Tax, $5,730.70 Negligence Penalty
Action:
Redetermine as recommended by the Appeals Division.
West Bay Motors Incorporated, 552181 (AS)
4-1-04 to 3-31-07, $18,507.84 Tax
Action:
Redetermine as recommended by the Appeals Division.
Thomas Edward Kinder, 546324, 546328 (AS)
7-1-07 to 6-30-08, $1,881.00 Tax, $188.10 Failure to File Penalty
7-28-06 to 6-30-07, $645.00 Tax, $64.50 Failure to File Penalty
Action:
Redetermine as recommended by the Appeals Division.
Armen Hovhannisyan, 389682 (ET)
8-22-05 to 12-31-05, $109,098.00 Tax, $10,909.80 Negligence Penalty
Action:
Redetermine as recommended by the Appeals Division.
Atco Enterprises, Inc., 359307, 359854 (ET)
6-1-02 to 12-31-03, $36,262 Unreported Distribution of Tobacco Products
1-1-04 to 12-31-04, $25,850 Unreported Distribution of Tobacco Products
Action:
Redetermine as recommended by the Appeals Division.
Dhanoa, Inc., 624561 (ET)
May 24, 2012 Seizure Date, $387.00 Approximate Value
Action:
Determined that staff properly seized the tobacco products.
198
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Tuesday, October 23, 2012
CORPORATE FRANCHISE AND PERSONAL INCOME TAX MATTERS, CONSENT
(Motion expunged on October 24, 2012.)
SALES AND USE TAX MATTERS, REDETERMINATIONS, RELIEF OF PENALTIES
AND DENIALS OF CLAIMS FOR REFUND, CONSENT
With respect to the Sales and Use Tax Matters, Redeterminations, Relief of
Penalties and Denials of Claims for Refund, Consent Agenda, upon a single motion of Ms. Steel,
seconded by Ms. Yee and unanimously carried, Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and
Ms. Mandel voting yes, the Board made the following orders:
Orange County Plastering Co., Inc., 329383 (EA)
10-1-02 to 9-30-02, $310,755.56
Action:
Approve the redetermination as recommended by staff.
St. Francis Medical Center, 585711 (AA)
7-1-06 to 6-30-09, $276,896.93
Action:
Approve the redetermination as recommended by staff.
Jacobson, David Enterprise, Inc., 572115 (EH)
1-1-07 to 12-31-09, $124,367.96
Action:
Approve the redetermination as recommended by staff.
Alpha Beta Company, 623588 (AA)
2-26-12 to 3-24-12, $105,000.00
Action:
Approve the relief of penalty as recommended by staff.
Tractor Supply Company, 592483 (OH)
4-1-06 to 3-31-09, $408,276.00
Action:
Approve the denial of claim for refund as recommended by staff.
Medcal Sales, LLC, 577725 (EH)
1-1-10 to 9-30-10, $116,015.00
Action:
Approve the denial of claim for refund as recommended by staff.
Boral Stone Products, LLC, 539352 (JH)
4-1-07 to 12-31-09, $75,189.41
Action:
Approve the denial of claim for refund as recommended by staff.
SALES AND USE TAX MATTERS, CREDITS, CANCELLATIONS AND REFUNDS,
CONSENT
With respect to the Sales and Use Tax Matters, Credits, Cancellations and
Refunds, Consent Agenda, upon a single motion of Ms. Steel, seconded by Ms. Yee and
unanimously carried, Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes,
the Board made the following orders:
Marty James Orosco, 624120 (CH)
10-1-03 to 12-31-07, $1,357,402.37
Action:
Approve the credit and cancellation as recommended by staff.
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
199
Tuesday, October 23, 2012
Mikial Singh Nijjar, 624113 (CH)
10-1-03 to 12-31-07, $1,339,261.60
Action:
Approve the credit and cancellation as recommended by staff.
SCP Distributors, LLC, 620956 (OH)
1-1-07 to 12-31-09, $174,150.81
Action:
Approve the credit and cancellation as recommended by staff.
Superior Auto-Mission Hills, LLC, 621426 (AC)
1-1-09 to 2-24-09, $324,109.24
Action:
Approve the credit and cancellation as recommended by staff.
Manchester Resorts, L.P., 599651 (FH)
7-1-11 to 9-30-11, $150,925.00
Action:
Approve the refund as recommended by staff.
Chevrolet Motor Division, 613937 (OH)
9-1-11 to 5-4-12, $1,048,707.25
Action:
Approve the refund as recommended by staff.
Mercedes-Benz USA, LLC, 612935 (KH)
1-27-12, $2,729,960.54
Action:
Approve the refund as recommended by staff.
Insurance Company of the West, 531594 (FH)
1-1-07 to 12-31-09, $351,075.68
Action:
Approve the refund as recommended by staff.
BMW of North America, 614384 (OH)
3-29-12 to 6-13-12, $1,443,767.39
Action:
Approve the refund as recommended by staff.
Elgin Laib, Jr., 609925 (EA)
1-1-02 to 9-30-02, $278,823.71
Action:
Approve the refund as recommended by staff.
Caridianbct, Inc., 513661 (OH)
7-1-06 to 3-31-09, $140,041.47
Action:
Approve the refund as recommended by staff.
Save Mart Supermarkets, 614175 (KH)
3-30-09 to 9-26-10, $120,955.10
Action:
Approve the refund as recommended by staff.
Boral Stone Products, LLC, 539352 (JH)
4-1-07 to 12-31-09, $113,582.56
Action:
Approve the refund as recommended by staff.
Home Acceptance Corporation, 557531 (EA)
4-1-09 to 12-31-10, $ 328,269.44
Action:
Approve the refund as recommended by staff.
200
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Tuesday, October 23, 2012
SPECIAL TAXES MATTERS, REDETERMINATIONS AND RELIEF OF PENALTIES,
CONSENT
With respect to the Special Taxes Matters, Redeterminations and Relief of
Penalties, Consent Agenda, upon a single motion of Ms. Steel, seconded by Ms. Yee and
unanimously carried, Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not
participating in accordance with Government Code section 87105 in Verizon Business Network
Services, Inc., 437657; Ms. Mandel not participating in accordance with Government Code
section 7.9 in Molina Healthcare of CA Partner Plan, Inc., 604897 (ET); MillerCoors, LLC,
613558 (ET); Vitol, Inc., 620434 (MT); and, Aetna Life Insurance Co., 624675 (ET); the Board
made the following orders:
Verizon Business Network Services, Inc., 437657 (ET)
10-1-03 to 12-31-05, $936,980.79
Action:
Approve the redetermination as recommended by staff. Ms. Mandel not
participating in accordance with Government Code section 87105.
Molina Healthcare of CA Partner Plan, Inc., 604897 (ET)
4-1-10 to 6-30-10, $111,921.60
Action:
Approve the relief of penalty as recommended by staff. Ms. Mandel not
participating in accordance with Government Code section 7.9.
MillerCoors, LLC, 613558 (ET)
3-1-12 to 3-31-12, $218,993.10
Action:
Approve the relief of penalty as recommended by staff. Ms. Mandel not
participating in accordance with Government Code section 7.9.
Vitol, Inc., 620434 (MT)
8-1-11 to 8-31-11, $162,107.63
Action:
Approve the relief of penalty as recommended by staff. Ms. Mandel not
participating in accordance with Government Code section 7.9.
Aetna Life Insurance Co., 624675 (ET)
10-1-11 to 12-31-11, $1,013,471.90
Action:
Approve the relief of penalty as recommended by staff. Ms. Mandel not
participating in accordance with Government Code section 7.9.
SPECIAL TAXES MATTERS, CREDITS, CANCELLATIONS AND REFUNDS,
CONSENT
With respect to the Special Taxes Matters, Credits, Cancellations and Refunds,
Consent Agenda, upon a single motion of Ms. Yee, seconded by Ms. Steel and unanimously
carried, Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating
in accordance with Government Code section 7.9, the Board made the following orders:
Haycock Petroleum Company, 466750 (MT)
4-1-03 to 12-31-05, $871,068.62
Action:
Approve the credit and cancellation as recommended by staff.
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
201
Tuesday, October 23, 2012
The Wine Group, LLC, 550312, 552965, 557368 (ET)
6-1-10 to 6-30-10, $496,244.16
Action:
Approve the refund as recommended by staff.
LEGAL APPEALS MATTER, ADJUDICATORY
Frangi’s Restaurant, Inc., 433581 (AS)
1-1-98 to 9-30-06, $177,036.72 Tax, $191,613.21 Fraud Penalty, $79,477.77 Amnesty Double
Fraud Penalty
Considered by the Board: January 31, 2012
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Action:
Upon motion of Ms. Mandel, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition for rehearing be granted.
Ms. Mandel requested staff to talk with the taxpayer’s representative to clarify
staff’s assertions.
TAX PROGRAM NONAPPEARANCE MATTERS NOT SUBJECT TO CONTRIBUTION
DISCLOSURE STATUTE
OFFER-IN-COMPROMISE RECOMMENDATIONS
Action:
Upon motion of Ms. Yee, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board approved the
Offer in Compromise Recommendations of Bruce Terrance Busby; Kathleen Ann Busby; Atwill,
L.L.C.; Stephen Williams Churchill; Karen P. Kukkonen; Fountains Plus Garden Center, Inc.;
Barbara Renae McWherter; Michael Timothy Scott, Jr.; Floyd Thorne; Wionics Technologies,
Inc.; and, Tommy Vaughn Woods; as recommended by staff.
CHIEF COUNSEL MATTERS
RULEMAKING
Adoption of Emergency Regulations – Lumber Products Assessment
Robert Tucker, CEA, Legal Administration/Tax and Fee Programs Division,
Legal Department, and Stephen Smith, Tax Counsel IV, Legal Administration/Tax and Fee
Programs Division, Legal Department, made introductory remarks regarding staff’s request for
Board authorization to promulgate an emergency regulation to implement the provisions of
AB 1492 (Chapter 289, Stats of 2012) (Exhibit 10.3).
Speakers:
Mandy Lee, Director, Government Affairs, California Retailers Association
Gerry Charron, Software Development Manager, Stock Building Supply
Ken Dunham, Executive Director, West Coast Lumber & Building Material
Association
Craig Evans, Vice President, Learned Lumber
David Bischel, President, California Forestry Association
202
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Tuesday, October 23, 2012
Action:
Ms. Yee moved to adopt the emergency regulation Lumber Products Assessment
as recommended by staff and direct staff to commence rulemaking by publishing the regulation
and notice to comment. The motion was seconded by Ms. Mandel but no vote was taken.
Upon motion of Ms. Yee, seconded by Ms. Mandel and duly carried, Mr. Horton,
Ms. Yee and Ms. Mandel voting yes, Mr. Runner voting no, Ms. Steel abstaining, the Board
adopted the emergency regulation Lumber Products Assessment as recommended by staff.
Upon motion of Ms. Yee, seconded by Ms. Mandel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board directed staff
to begin the rulemaking process and referred the matter to the Business Tax Committee.
ADMINISTRATIVE SESSION
ADMINISTRATIVE MATTERS, CONSENT
The Board deferred consideration of the following matter to a later date in this
meeting: Board resolution to Regina Evans-Jarrett.
With respect to the Administrative Matters, Consent Agenda, upon a single
motion of Mr. Runner, seconded by Ms. Yee and unanimously carried, Mr. Horton, Ms. Steel,
Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board made the following orders:
Action:
Adopt the Emergency Telephone Users Surcharge Rate of 0.50 percent for
calendar year 2013 as recommended by staff and publish the rate in these Board meeting minutes
(Exhibit 10.4).
Action:
Approve the 2013 Board Workload Plan as recommended by staff (Exhibit 10.5).
OTHER ADMINISTRATIVE MATTERS
Executive Director’s Report
Eric Steen, CROS Project Director, provided a report regarding the progress on
the CROS project to replace BOE’s two current tax legacy technology systems.
Property and Special Taxes Deputy Director’s Report
David Gau, Deputy Director, Property and Special Taxes Department, provided
an update regarding the Fire Prevention Fee Program (Exhibit 10.6).
Administration Deputy Director’s Report
Liz Houser, Deputy Director, Administration Department, reported that there are
no updates on the Governor’s 2012/13 Budget at this time.
Liz Houser, Deputy Director, Administration Department, made introductory
remarks regarding two 2012/13 Legislative Budget Change Proposals (BCPs) (Exhibit 10.7).
Ms. Houser introduced BCP No. 7: AB 1492 Lumber Products Assessment,
which requests the necessary resources for additional costs to implement the new lumber products
assessment (Exhibit 10.8).
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
203
Tuesday, October 23, 2012
Action:
Upon motion of Ms. Yee, seconded by Ms. Mandel and duly carried, Mr. Horton,
Ms. Yee and Ms. Mandel voting yes, Ms. Steel and Mr. Runner voting no, the Board approved
BCP No. 7: AB 1492 Lumber Products Assessment, as recommended by staff.
Ms. Houser introduced BCP No. 8: AB 2323 Publication of Board Opinions,
which requests the necessary resources to implement the provisions of Assembly Bill 2323.
Ms. Houser introduced Randy Ferris, Chief Counsel, who discussed the Board’s options in
response to the Department of Finance’s actions with regard to this proposal (Exhibit 10.9).
Action:
Upon motion of Ms. Yee, seconded by Mr. Runner and duly carried, Mr. Horton,
Ms. Yee, Mr. Runner and Ms. Mandel voting yes, Ms. Steel voting no, the Board approved
BCP No. 8: AB 2323 Publication of Board Opinions, as recommended by staff, and directed staff
to appeal the decision of the Deportment of Finance on this matter.
ANNOUNCEMENT OF CLOSED SESSION
The Board recessed at 5:07 p.m. and reconvened immediately in closed session
with Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel present.
CLOSED SESSION
The Board met to discuss settlements (Rev. & Tax. Code §§ 6901, 7093.5,
30459.1 and 50156.11) and personnel matters (Gov. Code § 11126(a)).
The Board recessed at 5:40 p.m. and reconvened immediately in open session
with Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel present.
Mr. Horton announced the appointment of Michele Pielsticker to the position of
Chief, Legislative and Research Division.
FINAL ACTION ON CORPORATE FRANCHISE AND PERSONAL INCOME TAXES
HEARINGS HELD OCTOBER 23, 2012
Gerald J. Marcil and Carol L. Marcil, 458832
Final Action: Ms. Mandel moved to reverse the action of the Franchise Tax Board. The motion
was seconded by Ms. Steel but no vote was taken.
The Board deferred consideration of the matter to the next day.
Thomas L. Cantor and Cheryl A. Cantor, 597487
Final Action: Upon motion of Ms. Mandel, seconded by Ms. Yee and duly carried, Mr. Horton,
Ms. Yee, Mr. Runner and Ms. Mandel voting yes, Ms. Steel voting no, the Board sustained the
action of the Franchise Tax Board.
204
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Tuesday, October 23, 2012
JK Group, LLC, 448306
Final Action: Mr. Runner moved to reverse the action of the Franchise Tax Board. The motion
was seconded by Ms. Steel but failed to carry, Ms. Steel and Mr. Runner voting yes, Mr. Horton,
Ms. Yee and Ms. Mandel voting no.
Upon motion of Ms. Yee, seconded by Ms. Mandel and duly carried, Mr. Horton,
Ms. Yee and Ms. Mandel voting yes, Ms. Steel and Mr. Runner voting no, the Board sustained
the action of the Franchise Tax Board.
FINAL ACTION ON SALES AND USE TAX APPEALS HEARING HELD
OCTOBER 23, 2012
Mordehay Rabinowiz, 489446 (AC)
Final Action: Mr. Runner moved to remove the fraud penalty and reduce the taxable food ratio
from 75 percent to 25 percent. The motion was seconded by Ms. Steel but failed to carry,
Ms. Steel and Mr. Runner voting yes, Mr. Horton, Ms. Yee and Ms. Mandel voting no.
Upon motion of Ms. Yee, seconded by Ms. Mandel and duly carried, Mr. Horton,
Ms. Yee and Ms. Mandel voting yes, Ms. Steel and Mr. Runner voting no, the Board ordered that
the petition be redetermined as recommended by the Appeals Division.
The Board recessed at 6:12 p.m.
The foregoing minutes are adopted by the Board on May 22, 2013.
Note: The following matters were removed from the calendar prior to the meeting: Shin P. Yang
and Connie L. Deng, 589501; Bret A. Curtis and Yecenia M. Curtis, 594236; Sean Brunske,
597425; Cha Radiology Associate, 595850; Deanna Robinson Interiors, Inc., 519485 (EA); LifeCare Home Health and Medical Supplies, Inc., 495335 (AS); and, Stainless Fixtures, Inc., 505327
(AP).
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
205
Wednesday, October 24, 2012
The Board met at its offices at 5901 Green Valley Circle, Culver City, at
9:35 a.m., with Mr. Horton, Chairman, Ms. Steel, Vice Chairwoman, Ms. Yee and Mr. Runner
present, Ms. Mandel present on behalf of Mr. Chiang in accordance with Government Code
section 7.9.
SALES AND USE TAX APPEALS HEARINGS
Macradij Sarkis Yacoubian, 508838 (AC)
5-1-05 to 3-31-08, $ 89,450.83 Tax, $8,945.09 Negligence Penalty
For Petitioner:
Macradij Yacoubian, Taxpayer
For Sales and Use Tax Department:
Scott Lambert, Hearing Representative
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether adjustments are warranted to unreported taxable sales.
Whether petitioner was negligent.
Action:
Mr. Runner moved that the petition be submitted for decision, granting the
petitioner 30 days to file supporting documents, the Department 30 days to respond, and the
Appeals Division 30 days thereafter to review the parties’ submissions and provide its
recommendation to the Board. Ms. Yee made a substitute motion that the petition be submitted
for decision. The substitute motion was seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes.
Café 976, LLC, 479006, 504670 (FH)
10-1-99 to 12-31-02, $23,183.43 Tax, $2,288.76 Finality Penalty, $2,288.76 Amnesty Double
Finality Penalty, $2,650.28 Amnesty Interest Penalty
For Taxpayer/Claimant:
Anne Dierickx, Taxpayer
For Sales and Use Tax Department:
Marc Alviso, Hearing Representative
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether adjustments are warranted to the disallowed claimed exempt food sales.
Whether the Notice of Determination dated November 14, 2008, for the period
July 1, 2001, through December 31, 2002, was timely issued.
Whether taxpayer has established a basis for relief of the finality penalty.
Whether taxpayer has established a basis for relief of the amnesty penalties.
Action:
Upon motion of Ms. Yee, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be submitted for decision.
Miguel Orejel and Magdalena Orejel, 529908 (AA)
4-1-06 to 3-31-09, $0.00 Tax, $3,122.87 Negligence Penalty
For Petitioners:
Miguel Orejel, Taxpayer
Joyce Rebhun, Representative
For Sales and Use Tax Department:
Marc Alviso, Hearing Representative
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issue:
Whether petitioner was negligent.
Action:
Upon motion of Ms. Yee, seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be submitted for decision.
206
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Wednesday, October 24, 2012
The Board recessed at 11:54 a.m. and reconvened at 12:02 p.m. with Mr. Horton,
Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel present.
Melika, Inc., 549416 (AS)
4-1-05 to 3-31-08, $183,221.23 Tax, $18,322.13 Negligence Penalty
For Petitioner:
Joyce Rebhun, Representative
For Sales and Use Tax Department:
Scott Lambert, Hearing Representative
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
1: Whether additional adjustments to the audited amount of unreported taxable
sales are warranted.
Whether petitioner was negligent.
Action:
Upon motion of Ms. Yee, seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be submitted for decision.
The Board recessed at 12:17 p.m. and reconvened at 1:39 p.m. with Mr. Horton,
Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel present.
CORPORATE FRANCHISE AND PERSONAL INCOME TAX MATTERS, CONSENT
With respect to the Corporate Franchise and Personal Income Tax Matters
Consent Agenda, upon motion of Ms. Steel, seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
its previous motion of October 23, 2012 be expunged.
The Board deferred consideration of the following matter: RMDI Corporation,
594848.
With respect to the Corporate Franchise and Personal Income Tax Matters
Consent Agenda, upon a single motion of Ms. Steel, seconded by Mr. Runner and unanimously
carried, Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board made
the following orders:
Howard B. Han and Seung W. Han, 577081
2006, $78,376.00 Tax
Action:
Sustain the action of the Franchise Tax Board.
Yoshio Aoki, 553610
2006, $717.00 Assessment
Action:
Modify the action of the Franchise Tax Board.
Mary Ann Ault, 534656
2007, $13,895.00 Assessment, $3,497.25 Late Filing Penalty
Action:
Sustain the action with concession by the Franchise Tax Board.
Cornerstone Real Estate Fund A, LLC, 574006
2008, $2,308.16 Claim for Refund
Action:
Sustain the action of the Franchise Tax Board.
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
207
Wednesday, October 24, 2012
Gervase F. Eline III, 567681
2009, $384.28 Claim for Refund
Action:
Sustain the action of the Franchise Tax Board.
Cristiana Ferrari, 551247
2000, $11,738.00 Assessment, $4,695.20 Accuracy Related Penalty, $2,216.65 Amnesty Penalty
Action:
Sustain the action of the Franchise Tax Board.
Danny L. Gantt and Marilyn J. Gantt, 560555
2006, $132.00 Tax
Action:
Sustain the action of the Franchise Tax Board.
James A. Gregoline, 557786
2007, $9,070.00 Tax, $2,267.50 Late Filing Penalty, $2,267.50 Demand Penalty
Action:
Sustain the action of the Franchise Tax Board and impose a $2,500.00 frivolous
appeal penalty.
Ricardo Hinestroza, 553528
2003, $2,638.00 Tax
2004, $7,316.00 Tax, $1,463.20 Accuracy-Related Penalty
2005, $10,211.00 Tax, $2,042.20 Accuracy-Related Penalty
Action:
Sustain the action of the Franchise Tax Board.
Mark E. Holm, 576514
2008, $513.00 Tax, $128.25 Late Filing Penalty, $128.25 Demand Penalty
Action:
Sustain the action of the Franchise Tax Board and impose a $2,500.00 frivolous
appeal penalty.
Jennifer Hu, 571278
2008, $1,210.00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
Sheila Kennedy, 530951
2007, $791.00 Tax, $197.75 Late Filing Penalty, $239.75 Demand Penalty
Action:
Sustain the action of the Franchise Tax Board and imposed a $750.00 frivolous
appeal penalty.
William Kwok, 571820
2008, $1,811.00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
Rebecca Martz, 573096
2007, $409.00 Assessment
Action:
Sustain the action of the Franchise Tax Board.
Barbara Olstad, 573721
2009, $121.28 Claim for Refund
Action:
Sustain the action of the Franchise Tax Board.
RMDI Corporation, 594848
2008, $65,484.00 Claim for Refund
Action:
The Board took no action.
208
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Wednesday, October 24, 2012
Douglas Samski, 559019
2008, $1,131.00, $282.75 Late Filing Penalty, $282.75 Demand Penalty
Action:
Sustain the action of the Franchise Tax Board and impose a $$2,500.00 frivolous
appeal penalty.
Vittaria.com, Inc., 563333
2008, $800.00 Tax, $200.00 Late Filing Penalty, $200.00 Demand Penalty
Action:
Sustain the action of the Franchise Tax Board.
Ronald P. Cox and Chen Li, 537134
2005, $1,358.00 Assessment
Action:
Deny the petition for rehearing.
Angela Real, 536331
2006, $130.00 Assessment
Action:
Deny the petition for rehearing.
SALES AND USE TAX APPEALS HEARINGS
Jose E. Sanchez, 489568, 505671(EA)
10-1-05 to 9-30-08, $59,616.77 Tax, $0.00 Fraud Penalty
For Taxpayer/Claimant:
Jose Sanchez, Taxpayer
Carlos E. Chait, Representative
For Sales and Use Tax Department:
Kevin Smith, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether adjustments are warranted to the disallowed claimed exempt sales of
food.
Whether adjustments are warranted to the disallowed claimed tax-included
deductions.
Whether taxpayer is entitled to relief because he received erroneous oral advice
from the Board.
Action:
Upon motion of Ms. Yee, seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be submitted for decision.
Heidi Rachael Mendez, Edgardo Mendez and Rachel Mendez, 495816 (FH)
7-1-06 to 9-30-07, $3,806.00 Claim for Refund
For Claimants:
Edgardo Mendez, Taxpayer
For Sales and Use Tax Department:
Lawrence Mendel, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issue:
Whether claimant has established that the sales at issue were nontaxable sales for
resale.
Action:
Upon motion of Ms. Yee, seconded by Ms. Mandel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the claim be submitted for decision.
The Board recessed at 3:00 p.m. and reconvened at 3:30 p.m. with Mr. Horton,
Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel present.
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
209
Wednesday, October 24, 2012
FINAL ACTION ON CORPORATE FRANCHISE AND PERSONAL INCOME TAXES
HEARING HELD OCTOBER 23, 2012
Gerald J. Marcil and Carol L. Marcil, 458832 (continued)
Final Action: Upon motion of Ms. Mandel, seconded by Ms. Steel and duly carried, Ms. Steel,
Ms. Yee, Mr. Runner and Ms. Mandel voting yes, Mr. Horton voting no, the Board reversed the
action of the Franchise Tax Board.
FINAL ACTION ON SALES AND USE TAX APPEALS HEARINGS HELD
OCTOBER 24, 2012
Macradij Sarkis Yacoubian, 508838 (AC)
Final Action: Ms. Mandel moved that the petition be submitted for decision, granting the
petitioner 30 days to file supporting documents, the Department 30 days to respond, and the
Appeals Division 30 days thereafter to review the parties’ submissions and provide its
recommendation to the Board. The motion was seconded by Ms. Yee. Ms. Steel made a substitute
motion to reduce the deficiency by 15 percent to reflect the potential credits and remove the
negligence penalty. The substitute motion was seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes.
Café 976, LLC, 479006, 504670 (FH)
Final Action: Upon motion of Ms. Steel, seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
taxable sales ratio be adjusted to 45 percent for the third and fourth quarters of 2001 and
55 percent for 2002.
Miguel Orejel and Magdalena Orejel, 529908 (AA)
Final Action: Upon motion of Ms. Yee, seconded by Ms. Mandel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be redetermined as recommended by the Appeals Division.
Melika, Inc., 549416 (AS)
Final Action: Upon motion of Ms. Mandel, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be redetermined as recommended by the Appeals Division.
Club Red Square, LLC, 510332 (AC)
10-1-05 to 6-30-08, $70,032.69 Tax, $8,227.35 Negligence Penalty, $7,667.35 Finality Penalty
For Taxpayer:
Waived Appearance
For Sales and Use Tax Department:
Scott Lambert, Hearing Representative
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether adjustments are warranted to the unreported taxable sales.
Whether adjustments are warranted to the disallowed claimed deductions.
Whether taxpayer was negligent.
210
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Wednesday, October 24, 2012
Action:
Upon motion of Ms. Yee, seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be redetermined as recommended by the Appeals Division. The Board directed staff
to inform the taxpayer of the Offer in Compromise program and of payment options.
The Board further reaffirmed its direction to staff to inform taxpayers of the
Offer in Compromise program and of payment options as a general practice.
Nabil W. Waniss, 491575 (EA)
10-1-05 to 6-4-08, $17,550.20 Tax, $3,813.39 Negligence Penalty
For Petitioner:
Waived Appearance
For Sales and Use Tax Department:
Scott Lambert, Hearing Representative
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether adjustments are warranted to the amount of unreported taxable sales of
auto parts.
Whether an adjustment should be made for unclaimed state diesel fuel tax.
Whether petitioner was negligent.
Action:
Upon motion of Ms. Yee, seconded by Ms. Mandel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be redetermined as recommended by the Appeals Division.
Jose E. Sanchez, 489568, 505671(EA)
Final Action: Upon motion of Ms. Yee, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be redetermined as recommended by the Appeals Division.
Heidi Rachael Mendez, Edgardo Mendez and Rachel Mendez, 495816 (FH)
Final Action: Upon motion of Ms. Mandel, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the claim be denied as recommended by the Appeals Division.
The Board recessed at 4:01 p.m.
The foregoing minutes are adopted by the Board on May 22, 2013.
Note: The following matters were removed from the calendar prior to the meeting: Anwer Ali
Jadhavji, 202563 (AC); Jerry Pena, 478061 (EH); Craig Robert Hansen, 518238 (EH); Salim
Ramzan Ali Jivani and Farida Salim Jivani, 513980 (KH); Salim Ramzan Ali Jivani and Farida
Salim Jivani, 513982 (KH); Salim Ramzan Ali Jivani and Farida Salim Jivani, 513983 (KH);
and, Salim Ramzan Ali Jivani and Farida Salim Jivani, 513984 (KH).
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
211
Thursday, October 25, 2012
The Board met at its offices at 5901 Green Valley Circle, Culver City, at
9:35 a.m., with Mr. Horton, Chairman, Ms. Steel, Vice Chairwoman, Ms. Yee and Mr. Runner
present, Ms. Mandel present on behalf of Mr. Chiang in accordance with Government Code
section 7.9.
SALES AND USE TAX APPEALS HEARINGS
Mohamad Marwan Nafeh, 326425, 515731(AP)
3-1-01 to 12-31-03, $36,480.20 Tax, $12,837.13 Penalties
7-1-05 to 3-31-08, $30,973.47 Tax, $3,097.35 Negligence Penalty
For Petitioner:
Mohamad Nafeh, Taxpayer
Abdul J. Muhammad, Representative
For Sales and Use Tax Department:
Scott Lambert, Hearing Representative
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether further adjustments are warranted.
Whether petitioner has established that adjustments are warranted to the
unreported taxable cigarette rebates from manufacturers.
Whether petitioner was negligent.
Action:
Upon motion of Ms. Yee, seconded by Ms. Mandel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be submitted for decision.
Rebhya Abdeljawad, 553035 (EH)
4-1-07 to 12-31-08, $30,867.18 Tax, $3,086.75 Negligence Penalty
For Petitioner:
Rebhya Abdeljawad, Taxpayer
For Sales and Use Tax Department:
Scott Lambert, Hearing Representative
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether adjustments are warranted to the audited understatements of taxable
measure.
Whether petitioner was negligent.
Action:
Upon motion of Ms. Yee, seconded by Ms. Mandel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be submitted for decision.
Mr. Horton directed the Department to inform the taxpayer of her options.
Anderson Audio Visual-East Bay, LLC, 511892 (CH)
4-1-05 to 3-31-08, $42,703.07 Tax
For Petitioner/Claimant:
Alan Durant, Representative
Joseph Matranga, Representative
Shane Parkes, Representative
For Sales and Use Tax Department:
Kevin Smith, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issue:
Whether petitioner should be relieved from the tax due on freight charges
because its failure to report the tax was the result of its reasonable reliance on written advice from
the Board.
212
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Thursday, October 25, 2012
Action:
Upon motion of Ms. Yee, seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be submitted for decision.
Yin Mei Liang, 492980 (EA)
4-1-05 to 12-31-07, $6,184.12 Tax, $378.15 Negligence Penalty, $240.25 Failure to File Penalty
For Petitioner:
Yin Mei Liang, Taxpayer
For Sales and Use Tax Department:
Marc Alviso Hearing Representative
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether adjustments are warranted to the audited understatement of reported
taxable sales.
Whether petitioner was negligent.
Whether relief of the failure-to-file penalty is warranted.
Action:
Upon motion of Ms. Yee, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be submitted for decision.
The Board recessed at 12:07 p.m. and reconvened at 12:30 p.m. with Mr. Horton,
Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel present.
SPECIAL TAXES APPEALS HEARING
Ashraf Alfonose Youssef, 358704 (ET)
For Petitioner:
Ashraf Alfonose Youssef, Taxpayer
For Property and Special Taxes Department:
Pamela Mash, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Action:
Upon motion of Mr. Horton and unanimously carried, Mr. Horton, Ms. Steel,
Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board granted the taxpayer’s postponement
request and ordered that the hearing be postponed to December 18, 2012 in Sacramento as agreed
upon by the taxpayer, and directed staff to arrange an interpreter for that hearing.
ADMINISTRATIVE SESSION
ADMINISTRATIVE MATTERS, CONSENT
The Board deferred consideration of the following matter to the next Board
Meeting: Board resolution to Regina Evans-Jarrett.
FINAL ACTION ON SALES AND USE TAX APPEALS HEARINGS HELD
OCTOBER 25, 2012
Baron L. Jones, 523682 (EH)
7-1-05 to 6-30-08, $115,999.49 Tax, $11,599.93 Negligence Penalty
For Petitioner:
Waived Appearance
For Sales and Use Tax Department:
Scott Lambert, Hearing Representative
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
213
Thursday, October 25, 2012
Issues:
warranted.
Whether adjustments to the audited understatement of taxable sales are
Whether petitioner was negligent.
Action:
Upon motion of Ms. Yee, seconded by Ms. Mandel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be redetermined as recommended by the Appeals Division.
Joaquin E. Hernandez, 523684 (AA)
4-1-06 to 3-31-09, $51,767.98 Tax, $5,277.66 Negligence Penalty
For Petitioner:
No Appearance
For Sales and Use Tax Department:
Scott Lambert, Hearing Representative
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether adjustments are warranted to the audited understatement of reported
taxable sales.
Whether petitioner was negligent.
David Levine, Tax Counsel IV, Appeals Division, Legal Department, advised of
the revised recommendation of the Appeals Division to reduce unreported taxable sales and some
of the unreported taxable consumption, total reduction to the measure of $6,470.
Action:
Upon motion of Ms. Yee, seconded by Ms. Mandel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be redetermined in accordance with the revised recommendation of the Appeals
Division.
Stephen H. McCorkle and Jennifer L. McCorkle, 486206 (UT)
3-29-05, $4,561.00 Tax, $0.00 Failure to File Penalty
For Petitioners:
Waived Appearance
For Sales and Use Tax Department:
Lawrence Mendel, Tax Counsel
Contribution Disclosures pursuant to Government Code section 15626: None were disclosed.
Issues:
Whether petitioners’ acquisition of an additional 50 percent interest in a vessel is
subject to use tax.
Whether petitioners’ use tax liability was discharged in their bankruptcy filing.
Action:
Upon motion of Ms. Mandel, seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be redetermined as recommended by the Appeals Division.
Rebhya Abdeljawad, 553035 (EH)
Final Action: Upon motion of Ms. Steel, seconded by Mr. Runner and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the negligence penalty be deleted, and that the petition otherwise be redetermined as
recommended by the Appeals Division.
Mohamad Marwan Nafeh, 326425, 515731(AP)
Final Action: Upon motion of Ms. Yee, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be redetermined as recommended by the Appeals Division.
214
2012 MINUTES OF THE STATE BOARD OF EQUALIZATION
Thursday, October 25, 2012
Anderson Audio Visual-East Bay, LLC, 511892 (CH)
Final Action: Ms. Steel moved that the petition be granted. The motion we seconded by
Mr. Runner. Ms. Steel withdrew her motion.
Ms. Steel moved that the decision on the petition be held in abeyance pending
regulatory decision on the issue of whether Revenue and Taxation Code section 6596, subdivision
(a), should limit relief to the person who actually received the written advice from the Board or
that person’s legal or statutory successor in certain circumstances such as this case. The motion
was seconded by Mr. Runner but failed to carry, Ms. Steel and Mr. Runner voting yes,
Mr. Horton, Ms. Yee and Ms. Mandel voting no.
Upon motion of Mr. Runner, seconded by Ms. Yee and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board referred the
issue of whether Revenue and Taxation Code section 6596, subdivision (a), should limit relief to
the person who actually received the written advice from the Board or that person’s legal or
statutory successor in certain circumstances such as this case, to the Business Tax Committee.
Upon motion of Ms. Mandel, seconded by Ms. Yee and duly carried, Mr. Horton,
Ms. Yee and Ms. Mandel voting yes, Ms. Steel and Mr. Runner voting no, the Board ordered that
the petition be redetermined as recommended by the Appeals Division.
Yin Mei Liang, 492980 (EA)
David Levine, Tax Counsel IV, Appeals Division, Legal Department, advised of
the revised recommendation of the Appeals Division to reduce the deficiency by 50 percent and
sustain the penalties.
Final Action: Upon motion of Ms. Yee, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board ordered that
the petition be redetermined in accordance with the revised recommendation of the Appeals
Division.
The Board adjourned at 1:16 p.m.
The foregoing minutes are adopted by the Board on May 22, 2013.
Note: The following matters were removed from the calendar prior to the meeting: Richard Festo
Bwogi, 514577 (AS); Tim Finnell, Inc., 521823, 577253 (EH); Gordon W. Kelley, 475764 (AC);
Terry D. Eaves, 475767 (AC); Nirvair Corporation, 529714 (EA); Ibrahim Said Mekhail,
445466, 473541 (AA); Ibrahim Said Mekhail, 473538 (AP); Ibrahim Said Mekhail, 445467,
473537 (AA); Ibrahim Said Mekhail, 473539 (AS); Ibrahim Said Mekhail, 445468, 473540 (AA);
Ibrahim Said Mekhail, 475481 (AP); Ibrahim Said Mekhail, 475476, 524559 (AS); and, Ibrahim
Said Mekhail, 475478, 524544 (AS).
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