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Approved 2001 Minutes - Wednesday, March 7, 2001

Wednesday March 7, 2001

The Board met at its offices at 5901 Green Valley Circle, Culver City, at 9:00 a.m. with Vice Chairman Chiang, Mr. Klehs and Mr. Andal present.

FRANCHISE AND INCOME TAX MATTERS, ADJUDICATORY

Ginger L. & David A. Farrand, 53635
1989, $67,080.00 Assessment, $16,770.00 Penalty, Delinquent Return
$ 3,354.00 Penalty, Negligence
Submitted for Decision: January 24, 2001
Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.
Action: Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Chiang, Mr. Klehs and Mr. Andal voting yes, Mr. Parrish and Dr. Connell absent, the Board adopted a decision modifying the action of the Franchise Tax Board.

Innovations Consulting International, Inc., 47685
1996, $1,725.06 Assessment, $2,944.52 Penalty
Submitted for Decision: May 26, 2000
Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.
Action: Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Chiang, Mr. Klehs and Mr. Andal voting yes, Mr. Parrish and Dr. Connell absent, the Board adopted a decision sustaining the action of the Franchise Tax Board.

Larry D. & Janet Russell, 42093
1991, $185,354.00 Assessment
1992, $ 9,804.00 Assessment
1993, $ 60,084.00 Assessment
Submitted for Decision: December 14, 2000
Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.
Action: Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Chiang, Mr. Klehs and Mr. Andal voting yes, Mr. Parrish and Dr. Connell absent, the Board adopted a decision sustaining the action of the Franchise Tax Board.

LEGAL APPEALS MATTERS, CONSENT

The Board deferred the following matters: Redriders, Inc., SR AA 14-693813; 29657, Charles L. & Evelyn M. Harmon SR EH 23-833110; 33961, Anytime, Inc., SR EA 97-035092; 52821, BBSC, LLC, SR AB 97-190631; 40882.

With respect to the Legal Appeals Matters, Consent Agenda, upon a single motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Chiang, Mr. Klehs and Mr. Andal voting yes, Mr. Parrish and Dr. Connell absent, the Board made the following orders:

Bambi D. Breakstone, SR AC 11-670592; 89000016170
1-1-94 to 12-31-97, $25.58 Tax
Action: Redetermine as recommended by Appeals Section.

Sebooh Sarkissian (Deceased), SR AS 11-763717; 89000025930
4-1-94 to 3-31-97, $104,150.01 Tax, $00.00 Penalty
Action: Redetermine as recommended by Appeals Section.

Redriders, Inc., SR AA 14-693813; 29657
1-1-95 to 9-30-98, $2,230.47 Tax
Action: The Board took no action.

Hall Mart Foods, Inc., SR ARH 22-671883; 89000363080
10-1-94 to 8-31-96, $9,200.19 Tax
Action: Redetermine as recommended by Appeals Section.

Charles L. & Evelyn M. Harmon SR EH 23-8331100, 33961
1-1-96 to 12-31-98, $11,881.84 Tax, $1,246.86 Penalty, Negligence
Action: The Board took no action.

Elizabeth Stearns & Andrew Gray, SR EH 23-838718; 89000424050
1-1-93 to 12-31-95, $6,681.20 Tax
Action: Redetermine as recommended by Appeals Section.

Jesse James Douglas, SR EH 23-881466; 89000434450
7-1-94 to 6-30-97, $3,317.59 Tax, $00.00 Penalty
Action: Redetermine as recommended by Appeals Section.

Kline & Associates, Inc., SR FHB 25-827992; 89000577620
1-1-90 to 6-30-91, $44,852.62 Tax
Action: Redetermine as recommended by Appeals Section.

Fortune Commercial Corporation, SY FH 25-885797; 89000610290, -280
1-1-95 to 3-31-98, $15,475.98 Tax
Action: Redetermine as recommended by Appeals Section.

San Fernando Marble/Granite, Inc., SN AC 52-002880; 89000963570
1-1-94 to 3-31-95, $00.00 Tax, $00.00 Penalty
Action: Redetermine as recommended by Appeals Section.

Ihtshami Nabi & Nazma Ata Sheikh, SR AS 97-012481, 89002035010
1-29-92 to 2-24-97, $00.00 Tax, $1,832.63 Penalty, Negligence
Action: Redetermine as recommended by Appeals Section.

Anytime, Inc., SR EA 97-035092; 52821
12-10-92 to 12-31-97; $216,247.72 Tax, $00.00 Penalty, Negligence
Action: The Board took no action.

BBSC, LLC, SR AB 97-190631; 40882
12-30-97 to 6-26-98, $27,675.25 Tax
Action: The Board took no action.

U.S. Wholesale Club, SR FH 99-168587; 89002131030
10-1-92 to 9-30-95, $234,615.63 Tax, $23,461.57 Penalty, Negligence
Action: Redetermine as recommended by Appeals Section.

Chris Howard, SR EH 99-295525; 89002187560
10-1-93 to 12-31-95, $1,356.24 Tax
Action: Redetermine as recommended by Appeals Section.

Sharon Sacks Production, Inc., SR AC 99-686388; 89002358720, -710
7-1-95 to 6-30-98, $00.00 Tax
Action: Deny the claim for refund; otherwise redetermine as recommended by Appeals Section.

Brian Eugene Daley & Tamra Lyn Daley, SR EH 99-700428, 15133
4-1-95 to 6-30-98, $9,320.31 Tax, $00.00 Penalty, Negligence
Action: Redetermine as recommended by Appeals Section.

Caztechs, Inc., SR KH 97-260690; 89002080950
1-1-97 to 6-7-98, $5,340.00 Tax, $00.00 Penalty
Action: Redetermine as recommended by Appeals Section.

Mine Reclamation Corporation, SU EHC 97-533573, 42896
1-1-92 to 6-30-92, $0.00 Tax, $0.00 Penalty
Action: Redetermine as recommended by Appeals Section.

Norris L. Haight, SS EAA 99-653703; 89002345600
4-1-95 to 12-31-95, $00.00 Tax
SS EAA 24-915618; 89000490230, -240
1-1-95 to 3-31-95, $00.00 Tax
Action: Redetermine as recommended by Appeals Section.

Massachusetts Mutual Life Insurance Company, IT ET 34-000115; 89000895080
1986 - 1990, $84,973.51 Tax
Action: Redetermine as recommended by Appeals Section.

American General Life Insurance Company, IT ET 34-001625; 89000899260
1989 - 1992, $ 352,830.15 Tax
IT ET 34-001625; 89000899250
1993 - 1996, $1,125,785.00 Claim for Refund
Action: Redetermine as recommended by Appeals Section

Manhattan Reinsurance Company, IT ET 34-009007; 58843
1980 - 1987, $3,306,640.00 Tax
Action: Redetermine as recommended by Appeals Section.

Ali S. Salch & Kalid Ibrahime Salch, SR AA 14-730965; 89000121130, -140
1-1-92 to 12-31-93, $210,347.00
1-1-94 to 12-31-64, $ 81,300.00
Ali S. Salch, SR AA 99-671545; 89002352720, -730
1-1-95 to 12-31-97, $629,000.00
1-1-98 to 12-31-98, $ 11,900.00
Action: Deny the petition for rehearing.
Balwant Rai Birla & Sudesh Birla, CP ET 50-001677; 89000959600
1-1-90 to 1-11-93, $12,683.26 Tax, $1,268.33 Penalty, Failure to File
CR ET 02-001247; 89000005140
5-8-88 to 1-11-93, $641.32 Tax, $64.10 Penalty, Failure to File
Balwant Birla, Sudesh Birla, & Nuts & Spice Company
CP ET 50-000881; 89000959530
1-12-93 to 11-17-95, $15,068.21 Tax, $1,506.82 Penalty, Failure to File
CR ET 02-001177; 89000005070
1-12-93 to 11-17-95, $44,885.02 Tax, $4,488.61 Penalty, Failure to File
Action: Deny the petition for rehearing.

Abdul Samad Noori, SR EH 99-461439; 89002265970
1-1-95 to 12-31-97, $5,478.70 Tax
Action: Deny the petition for rehearing.

Raymondo Saldana Davila & Francisco Moreno, SR AR 99-750113; 89002381450
4-1-95 to 12-31-97, $73,054.27 Tax, $18,327.40 Penalty, Fraud
Action: Deny the petition for rehearing.

HOMEOWNER AND RENTER PROPERTY TAX ASSISTANCE MATTERS, CONSENT

With respect to the Homeowner and Renter Property Tax Assistance Matters, Consent Agenda, upon a single motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Chiang, Mr. Klehs and Mr. Andal voting yes, Mr. Parrish and Dr. Connell absent, the Board made the following orders:

Dora D. Baier, 75848
1999, $1.00 or more Claim for Credit
Action: Sustain the action of the Franchise Tax Board.

Roberta Cobb, 58050
1999, $240.00 Claim for Credit
Action: Sustain the action of the Franchise Tax Board.

Chinying Fan, 60034
1997, $1.00 or more Claim for Credit
Action: Sustain the action of the Franchise Tax Board.

Charles Reed, 63326
1999, $1.00 or more Claim for Credit
Action: Sustain the action of the Franchise Tax Board.

SALES AND USE TAX MATTERS, REDETERMINATIONS, RELIEF OF PENALTY AND DENIALS OF CLAIMS FOR REFUNDS, CONSENT

With respect to the Sales and Use Tax Matters, Redeterminations, Relief of Penalty and Denials of Claims for Refunds, Consent Agenda, upon a single motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs and Mr. Andal voting yes, Dr. Connell absent, the Board made the following orders:

Southern California Graphics Corporation, SR AS 018-099312; 89000226970
1-1-92 to 12-31-94, $136,112.48
Action: Redetermine as recommended by staff.

Direct Media Inc., SC OHB 030-697784; 89000881320
1-1-88 to 12-31-95, $368,818.66
Action: Redetermine as recommended by staff.

Universal Computer Systems, Inc., SC OHC 030-702106; 53563
10-1-95 to 9-30-98, $136,818.83
Action: Redetermine as recommended by staff.

The Olen Companies Inc., SB G UT 082-656664; 89001141680
8-11-95, $85,250.00
Action: Redetermine as recommended by staff.

Mark L. Schmaltz, et al., SP H UT 082-678242; 98222
8-21-97, $121,687.50
Action: Redetermine as recommended by staff.

Pacific Aircorp 23171 Inc., SP H UT 084-011868; 93447
8-6-99, $4,207,500.00
Action: Redetermine as recommended by staff.

Pacific Gas & Electric Company, SR Z BH 098-001535; 89002085420
1-1-94 to 12-31-96, $1,619,462.64
Action: Redetermine as recommended by staff.

Port of Oakland, SR CH 021-604469; 103612
4-1-96 to 3-31-99, $126,598.27
Action: Grant relief from penalty as recommended by staff

Chase Manhattan Auto Finance Corporation, SR S OHB 030-661212; 103570
8-1-00 to 8-31-00, $94,451.88
Action: Grant relief from penalty as recommended by staff

The Mead Corporation, SR Y OHA 030-672863; 103643
1-1-97 to 7-31-98, $58,701.08
Action: Grant relief from penalty as recommended by staff

Glencore Ltd., SG OHB 077-001440; 103256
4-1-99 to 4-30-99, $159,490.43
Action: Grant relief from penalty as recommended by staff.

Ingram Micro Inc., SR EA 099-349669; 102032
7-1-00 to 9-30-00, $147,182.70
Action: Grant relief from penalty as recommended by staff.

Ford Credit Titling Trust, SR S OHA 099-582314; 103443
1-1-00 to 3-31-00, $574,640.60
Action: Grant relief from penalty as recommended by staff.

Nth Generation Computing Inc., SR FHB 025-914742; 53162
7-1-99 to 9-30-99, $55,481.00
Action: Deny claim for refund as recommended by staff.

Metrocall Inc., SR Y OHB 030-674435; 89000851560
7-1-93 to 12-31-93, $86,199.36
Action: Deny claim for refund as recommended by staff.

Promotional Media, Inc., SR EA 024-647151; 102914
4-1-97 to 3-31-00, $52,798.20
Action: Deny 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 Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs and Mr. Andal voting yes, Dr. Connell absent, Mr. Chiang not participating in Joseph E. Seagram & Sons Inc., SR Z OHB 030-605977; 89681 and Peoplesoft USA, Inc., SR Y CHA 097-184924; 57886, the Board made the following orders:

The Gap Stores Inc., SR Y BHA 019-616408; 103225
4-1-00 to 6-30-00, $144,500.00
Action: Approve credit and cancellation as recommended by staff.

Dental/Medical Diagnostic Systems Inc., SR AC 097-217179; 103257
10-1-96 to 6-30-98, $92,577.20
Action: Approve credit and cancellation as recommended by staff.

Anita Louise Lerman, SR AS 013-874146; 89000096650
1-1-96 to 6-30-00, $120,697.74
Action: Approve refund as recommended by staff.

Bellflower Unified School District, SR AA 016-077326; 94324
10-1-99 to 6-30-00, $70,460.19
Action: Approve refund as recommended by staff.

Magna Machinery Company, Inc., SR CHA 021-785796; 87580
1-1-00 to 3-31-00, $153,570.31
Action: Approve refund as recommended by staff.

Brook Furniture Rental Inc., SR Y CHB 021-848475; 89268
4-1-00 to 6-30-00, $101,781.01
Action: Approve refund as recommended by staff.

Promotional Media Inc., SR EA 024-647151; 102243
4-1-97 to 3-31-00, $348,469.06
Action: Approve refund as recommended by staff.

Toshiba Machine Company America, SR S OHA 024-688878; 87579
4-1-99 to 6-30-99, $148,071.79
Action: Approve refund as recommended by staff.

ACS Systems Inc., SR EA 024-844501; 37484
7-1-96 to 3-31-00, $760,175.83
Action: Approve refund as recommended by staff.

ROHR Inc., SR Y OHB 025-626931; 87832
1-1-98 to 9-30-99, $571,452.12
Action: Approve refund as recommended by staff.

Terry Grimes Graphic Center - Sacramento, Inc., SR Y KH 28-656689, 36925
1-1-97 to 12-31-99, $65,291.41
Action: Approve refund as recommended by staff.

Square D Company, SR Z OHA 030-601230; 100292
1-1-95 to 12-31-98, $366,116.49
Action: Approve refund as recommended by staff.

Joseph E. Seagram & Sons Inc., SR Z OHB 030-605977; 89681
4-1-97 to 9-30-00, $953,257.25
Action: Approve refund as recommended by staff. Mr. Chiang not participating.

Jagenberg Inc., SC OHB 030-657945; 93681
10-1-99 to 12-31-99, $57,365.66
Action: Approve refund as recommended by staff.

Avcom Technologies, Inc., SR Y GH 030-662940; 87568
1-1-98 to 12-31-99, $778,920.89
Action: Approve refund as recommended by staff.

BK Entertainment Inc., SR OHA 030-668029; 88740
1-1-00 to 6-30-00, $188,222.87
Action: Approve refund as recommended by staff.

ICX Corporation, SR S OHA 030-685365; 87577
4-1-00 to 6-30-00, $123,822.42
Action: Approve refund as recommended by staff.
Admiralty Services International, SB G UT 082-664501; 82411
8-8-96, $111,270.68
Action: Approve refund as recommended by staff.

Peoplesoft USA, Inc., SR Y CHA 097-184924; 57886
4-1-98 to 6-30-98, $871,363.57
Action: Approve refund as recommended by staff. Mr. Chiang not participating.

Trench Unlimited, SC OH 097-308589; 88750
7-1-98 to 3-31-00, $164,473.25
Action: Approve refund as recommended by staff.

Romacorp Inc., SR Y OHA 097-312763; 100575
3-27-00 to 6-25-00, $51,424.87
Action: Approve refund as recommended by staff.

Petco Animal Supplies, Inc., SR Y FH 099-111912; 83127
4-1-97 to 3-31-00, $483,236.19
Action: Approve refund as recommended by staff.

Moran Foods Inc., SR Y OHA 099-956837; 98658
7-1-97 to 6-30-00, $274,963.94
Action: Approve refund as recommended by staff.

Cybeq Nano Technologies, Inc., SR GH 099-991660; 57889
10-1-97 to 12-31-99, $340,857.00
Action: Approve refund as recommended by staff.

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 Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs and Mr. Andal voting yes, Dr. Connell absent, the Board made the following orders:

Jaco Oil Company, MD MT 007-001085; 18630
1-12-98 to 1-5-99, $69,302.10
Action: Approve the refund as recommended by staff.

ANNOUNCEMENT OF CLOSED SESSION

The Board went immediately into closed session with Mr. Parrish, Mr. Chiang, Mr. Klehs and Mr. Andal present.

CLOSED SESSION

The Board met to discuss pending litigation and personnel matters.

The Board recessed at 9:10 a.m. and reconvened at 9:15 a.m. in open session with Mr. Parrish, Mr. Chiang, Mr. Klehs and Mr. Andal present, Ms. Mandel present on behalf of Dr. Connell in accordance with Government Section 7.9.

FRANCHISE AND INCOME TAX MATTERS, CONSENT

The Board deferred consideration of the following matters: 890 Village Green, a California Limited Partnership, 5857; Wesley S. & Kimberly Brown, 7580; Roy W. & Pamela M. Kindelberger, 4295; Sanjay Narayan, 7953; Carl B. Stone, 49601 and Novacap, Inc., 99R-0172; 89002467070.

With respect to the Franchise & Income Tax Matters, Consent Agenda, upon a single motion of Mr. Klehs, seconded by Mr. Parrish and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board made the following orders:

890 Village Green, a California Limited Partnership, 58572
1995, $1,509.00 Claim for Refund
1996, $1,123.00 Claim for Refund
1997, $ 883.00 Claim for Refund
1998, $ 800.00 Claim for Refund
Action: The Board took no action.

Frank & Jennifer Aimaro, 54997
1995, $3,129.00 Assessment
Action: Sustain the action of the Franchise Tax Board.

John R. Barton, 62075
1984, $ 108.00 Assessment, $ 136.90 Penalty
1985, $1,172.00 Assessment, $1,335.80 Penalty
1986, $9,463.00 Assessment, $9,905.53 Penalty
1987, $5,552.00 Assessment, $5,326.39 Penalty
1988, $4,931.00 Assessment, $2,712.05 Penalty
1989, $5,177.00 Assessment, $2,847.35 Penalty
Action: Sustain the action of the Franchise Tax Board.

Walter E. Bass, 98R-0852, 89002459540
1992, $7,778.00 Claim for Refund
Action: Sustain the action of the Franchise Tax Board.

Steve Black, 60037
1996, $1,004.00 Assessment, $251.00 Penalty, Failure to File
Action: Sustain the action of the Franchise Tax Board.

Raymond M. & Lory A. Bowen, 55015
1994, $19,390.06 Claim for Refund
Action: Sustain the action of the Franchise Tax Board.

Randy Brooks, 75800
1991, $2,683.00 Assessment
Action: Sustain the action of the Franchise Tax Board.

Harry & Lillian D. Brown, 59750
1996, $282.00 Assessment
Action: Sustain the action of the Franchise Tax Board.

Wesley S. & Kimberly Brown, 75801
1996, $343.00 Assessment
Action: The Board took no action.

Edgar D. Burtrum, 50328
1996, $2,794.00 Assessment
Action: Sustain the action of the Franchise Tax Board.

Ladonna Chandler, 57864
1995, $3,998.00 Assessment, $799.00 Penalty
Action: Reverse with regards to the accuracy-related penalty; otherwise sustain the action of the Franchise Tax Board.

Luann S. & Max J. Crandall, 83820
1996, $147.75 Assessment
Action: Sustain the action of the Franchise Tax Board.

Estrellita D. & Federico A. Dancel, 75809
1997, $1.00 or more Claim for Refund
Action: Sustain the action of the Franchise Tax Board.

Gregory Davison, 57157
1996, $279.00 Assessment
Action: Sustain the action of the Franchise Tax Board.

Keith R. DeOrio, 41984
1997, $10,580.00 Assessment, $2,645.00 Penalty, Failure to File
Action: Sustain the modified action of the Franchise Tax Board and impose a $750.00 frivolous appeal penalty.

Lawrence F. & Clara Drucker, 56451
1995, $351.00 Assessment
Action: Sustain the action of the Franchise Tax Board.

Michael J. Flynn, 77240
1996, $19,787.50 Assessment
Action: Sustain the action of the Franchise Tax Board.

Rick Greenburg, 57648
1996, $96.00 Assessment
Action: Sustain the action of the Franchise Tax Board.

Robert H. Hale, 62134
1997, $6,847.00 Assessment, $1,711.75 Penalty, Delinquent
Action: Sustain the action of the Franchise Tax Board and impose a $750 a frivolous appeal penalty.

Roy W. & Pamela M. Kindelberger, 42953
1995, $2,156.00 Assessment
Action: The Board took no action.

David A. Littlefield, 49682
1995, $1,108.00 Assessment, $217.75 Penalty, Late Filing
Action: Sustain the action of the Franchise Tax Board.

Arthur L. Luke, 61407
1996, $707.00 Assessment
Action: Sustain the action of the Franchise Tax Board.

Kandasamy & Usha Manoharan, 76197
1996, $499.00 Assessment
Action: Sustain the modified action of the Franchise Tax Board.

Dolores McConnell, 52978
1998, $1,022.00 Assessment
Action: Sustain the action of the Franchise Tax Board.

Michael J. Mitchell, 48794
1997, $1.00 or more Claim for Refund
Action: Sustain the action of the Franchise Tax Board.

Jeffrey R. Morgan, 58774
1996, $154.00 Assessment
Action: Sustain the action of the Franchise Tax Board.

Harold A. Morris, 58782
1996, $352.00 Assessment
Action: Sustain the action of the Franchise Tax Board.

Sanjay Narayan, 79538
1996, $1,054.00 Assessment
Action: The Board took no action.

Irvin R. & Dorothy M. Orr, 61400
1995, $370.00 Claim for Refund
Action: Sustain the action of the Franchise Tax Board.

Sharon Saunders, 49429
1997, $1,400.00 Assessment, $350.00 Penalty, Delinquent
$461.25 Penalty, Demand
Action: Sustain the action of the Franchise Tax Board and impose a $750.00 frivolous appeal penalty.

Joseph A. & Andrea M. Sotomayor, 42966
1995, $225.00 Assessment
Action: Sustain the action of the Franchise Tax Board.

Tyrone Stallworth, 78070
1995, $1,078.00 Assessment
1996, $1,135.00 Assessment
Action: Sustain the action of the Franchise Tax Board.

Carl B. Stone, 49601
1987, $1.00 or more Claim for Refund
Action: The Board took no action.

Berton West, 53312
1993, $495.00 Claim for Refund
Action: Sustain the action of the Franchise Tax Board.

James Krage, 29226
1994, $743.00 Assessment, $185.75 Penalty, Delinquent
$392.50 Penalty, Demand
Action: Deny the petition for rehearing.

Novacap, Inc., 99R-0172; 89002467070
1992, $1,244.15 Claim for Refund
Action: The Board took no action.

Joann & Jack D. Pine, 97A-1158; 89002467270
1991, $118,529.00 Assessment, $53,338.05 Penalty
1992, $ 279.00 Assessment, $ 69.75 Penalty
Action: Deny the petition for rehearing.

Eric A. Rowley, 33384
1997, $332.00 Assessment, $100.00 Penalty, Delinquent
$ 83.00 Penalty, Demand
Action: Deny the petition for rehearing.

Darwin D. Tesch, 89002460760
1996, $3,750.00 Assessment, $937.50 Penalty, Late Filing
$937.50 Penalty, Demand
$750.00 Penalty, Frivolous Appeal
Action: Deny the petition for rehearing.

Ali Vazirabadi, 37450
1997, $999.58 Claim for Refund
Action: Deny the petition for rehearing.

David & Dena Williams, 33741
1996, $91,130.00 Assessment, $22,782.50 Penalty, Delinquency
$ 5,000.00 Penalty, Frivolous Appeal
Action: Deny the petition for rehearing.

FRANCHISE AND INCOME TAXES APPEALS HEARINGS

Theodore E. Gildred, 63545
1991, $93,720.00 Assessment
For Appellant: Glenn Bystrom, CPA
Michelle Chang, Manager
Theodore E. Gildred, Appellant
For Franchise Tax Board: Jean Cramer, Tax Counsel
Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.
Issue: Whether a pass-through capital loss from an "S" corporation was properly recognized in 1991, or 1992.
Appellant's Exhibit: Lomas Group Accounts (Exhibit 3.1)
Respondent's Exhibit: Revenue Rule, Corporate Liquidations (Exhibit 3.2)
Action: Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, Mr. Chiang not participating, the Board ordered that the appeal be granted.

Exhibits to these minutes are incorporated by reference.
Marvin & Barbara Davis, 89002467060
1989, $405,043.00 Assessment
1990, $456,745.00 Assessment
For Appellant: Charles P. Rettig, Attorney
George DeRoy, Attorney
For Franchise Tax Board: Bruce Langston, Tax Counsel
Contribution Disclosures pursuant to Government Code Section 15626: A disqualifying contribution to Mr. Klehs was disclosed. No other contributions were disclosed.
Issues: Whether respondent's proposed assessments are barred by the statute of limitations.
Whether appellants may deduct attorney's fees in the year paid, when the litigation to which the fees relate involves income which was taxable in years prior to appellants' becoming California residents.
Whether appellants may deduct personal attorney's fees incurred in conjunction with certain partnership and corporate related litigation as expenses incurred in furtherance of a trade or business (and thus deductible 100 percent against gross income) or whether the fees must be deducted as itemized deductions (subject to the 2 percent of adjusted gross income floor).
Whether appellants may deduct sums allegedly embezzled from an "S" corporation of which they were shareholders, as a personal theft loss.
Whether appellants may deduct interest paid of account of a federal tax deficiency.
Appellant's Exhibit: Declaration of Barbara Davis (Exhibit 3.3)
Action: Upon motion of Ms. Mandel, seconded by Mr. Chiang and unanimously carried, Mr. Parrish, Mr. Chiang and Ms. Mandel voting yes, Mr. Klehs and Mr. Andal absent, the Board ordered that the appeal be submitted for decision.

Max Brenner, 57861
1991, $80,233.00 Assessment
For Appellant: No Appearance
For Franchise Tax Board: Renel Sapiandante, Tax Counsel
Action: The Board took no action.
The Board recessed at 9:55 a.m. and reconvened at 10:10 a.m. with Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel present.

Shawn N. & Tina T. Huynh, 61420
1995, $44,380.00 Assessment, $8,876.00 Penalty
Calvin T. Lam, 61413
1995, $46,847.00 Assessment, $9,369.40 Penalty
For Appellant: Elliott R. Spieser, Attorney
For Franchise Tax Board: Ed Kline, Tax Counsel
Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.
Issues: Whether appellants have proven that distributions made to them as shareholders of a corporation that converted from "S" status to "C" status were actually loan repayments, rather than taxable distributions.
Whether appellants have shown that the accuracy-related penalties were erroneously imposed.
Appellant's Exhibit: Miscellaneous Exhibits (Exhibit 3.4)

Mr. Spieser stated for the record that the Appellant conceded as to the issue of assessment.

Action: Upon motion of Mr. Chiang, seconded by Mr. Andal and duly carried,
Mr. Parrish, Mr. Chiang and Mr. Andal voting yes, Mr. Klehs voting no, Ms. Mandel abstaining, the Board ordered that the appeal be granted with respect to the accuracy-related penalties.

James & Jeannette Radney, 99A-0025, 89002465520
1992, $28,411.00 Assessment
For Appellant: No Appearance
For Franchise Tax Board: Jean Cramer, Tax Counsel
Action: The Board took no action.

Gerald H. & Elizabeth A. Beaulaurier, 99A-0012; 89002466420
1984, $3,298.00 Assessment
1985, $4,108.00 Assessment
Lothar & Eveline Schmidt, 99R-0022; 89002465680
1983, $1,078.71 Claim for Refund
1984, $2,191.91 Claim for Refund
1985, $3,555.23 Claim for Refund
1986, $1,669.30 Claim for Refund
Clarence E. & Joan M. Bonner, 99N-0013; 89002466520
1984, $3,438.09 Claim for Refund
1985, $5,389.00 Assessment
Howard & Helen Fox, 99R-0032; 89002467610
1983, $4,288.85 Claim for Refund
1984, $5,704.57 Claim for Refund
1985, $4,362.60 Claim for Refund
For Appellant: Appearance Waived
For Franchise Tax Board: John Penfield, Tax Counsel
Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.
Issue: Whether appellants have shown that their respective claims for refund are not barred by the applicable statute of limitations.
Action: Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board sustained the action of the Franchise Tax Board.

Irwin & Shirley Lachman, 32939
1991, $182,781.00 Assessment, $36,556.20 Penalty
For Appellant: Walter Weiss, Attorney
Vickie L. Gill, SRA
Irwin Lachman, Appellant
For Franchise Tax Board: Bradley Heller, Tax Counsel
Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.
Issues: Have appellants shown that respondent improperly calculated the basis of property sold in 1991.
Have appellants shown that respondent improperly disallowed the deduction of expenses for the development of land known as Latigo Ranch.
Have appellants shown that respondent improperly imposed an accuracy-related penalty for the substantial understatement of tax liability.
Appellant's Exhibit: Declaration of Irwin Lachman (Exhbit 3.5)
Miscellaneous Documents (Exhibit 3.6)
Action: Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the land value be accepted at $60,000.00.
Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the appeal be submitted for decision, granting the Appellant 30 days to submit additional documentation, the Franchise Tax Board 30 days to review and respond to the documentation and the Appeals Section 30 days thereafter to bring a final recommendation back to the Board.

SENIOR CITIZENS HOMEOWNER AND RENTER ASSISTANCE HEARING

Vita McNair, 79958
1997, $183.34 Claim for Credit
For Appellant: No Appearance
For Franchise Tax Board: Jean Cramer, Tax Counsel
Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.
Issue: Whether respondent properly denied appellant's claim for property tax assistance.
Action: Upon motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the action of the Franchise Tax Board be modified.

BUSINESS TAXES APPEALS HEARINGS

Anthony's Food Service, SR AB 12-723170; 89000051360
7-1-94 to 6-30-97, $41,690.54 Tax, $4,169.07 Penalty, Negligence
For Petitioner: Ronald Furnari, President
Harvey Joffe, CPA
For Sales and Use Tax Department: Kevin Hanks, Hearing Representative
Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.
Issues: Whether the evidence establishes that a larger allowance for non-sale items included in the bank deposits is warranted.
Whether a larger allowance for exempt food sales is warranted.
Whether relief from the negligence penalty is warranted.
Action: Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the allowance for exempt food sales be increased.

Michael Doria, SR AC 13-825281; 89000084350
1-1-95 to 6-30-98, $33,613.81 Tax, $3,361.40 Penalty, Negligence
For Petitioner: Patrick J. Leone, CPA
Michael Doria
For Sales and Use Tax Department: Kevin Hanks, Hearing Representative
Contribution Disclosures pursuant to Government Code Section 15626: No disqualifying contributions were disclosed.
Issues: Whether audited taxable sales were established in accordance with the facts.
Whether relief from the negligence penalty is warranted.
Action: Upon motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the petition be submitted for decision.

David Harbison & Luis Solorzano, SR AB 14-763674-010; 89000127520
1-1-95 to 12-31-97, $4,479.34 Tax
For Petitioner: Patrick J. Leone, CPA
For Sales and Use Tax Department: Kevin Hanks, Hearing Representative
Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.
Issues: Whether three sales to a certain company should be deleted from the test of claimed sales for resale.
Alternatively, whether those sales should be reduced to account for lump-sum billings.
Action: Upon motion of Mr. Andal, seconded by Mr. Parrish and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Andal and Ms. Mandel voting yes, Mr. Klehs absent, the Board ordered that the 25% taxable rule in Regulation 1540 be applied to invoices of Panther Software and Auto Shade.
Upon motion of Mr. Andal, seconded by Mr. Parrish and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Andal and Ms. Mandel voting yes, Mr. Klehs absent, the Board ordered that the invoice of Infocus be allowed as a sale for resale.
Upon motion of Mr. Andal, seconded by Mr. Parrish and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Andal and Ms. Mandel voting yes, Mr. Klehs absent, the Board ordered that the remainder of the petition be redetermined as to the revised recommendation of the Appeals Section.

Mr. Klehs stated for the record he would have voted with the majority regarding the petition of David Harbison & Luis Solorzano, SR AB 14-763674-010; 89000127520.

Jaqueline A. & Garo Tutunjian, SR EH 23-879167; 89000433960
10-1-92 to 12-31-95, $39,287.95 Tax, $4,203.97 Penalty, Negligence
For Petitioner: No Appearance
For Sales and Use Tax Department: Kevin Hanks, Hearing Representative
Action: The Board took no action.

UCAR Composites, Inc., SR EAA 24-882239; 52793
1-1-96 to 12-31-98, $231,370.85 Tax
For Petitioner: William Kansky, Vice President
For Sales and Use Tax Department: Carla Caruso, Counsel
Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.
Issues: Whether the evidence shows that the disallowed sales were in fact valid sales for resale.
Whether relief from the interest is warranted.
Action: Upon motion of Mr. Andal, seconded by Ms. Mandel and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Andal and Ms. Mandel voting yes, Mr. Klehs absent, the Board ordered that the petition be submitted for decision.

Union Oil Company of California, SZ EAA 98-001147; 89002085070
1-1-90 to 12-31-92, $498,031.02 Claim for Refund
For Petitioner: No Appearance
For Sales and Use Tax Department: Jeffery Graybill, Counsel
Action: The Board took no action.

The Board recessed at 12:05 p.m. and reconvened at 1:35 p.m. with Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel present.

Thuhoa Thi Nguyen, SR ARH 97-017205; 36605
7-1-93 to 6-30-96, $5,200.00 Successor Liability
For Petitioner: Thu Hoa Thi Nguyen
Mau Thanh Vu
For Sales and Use Tax Department: Jeffery Graybill, Counsel
Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.
Issue: Whether petitioner is liable as a successor for the sales tax liability of the predecessor.
Action: Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the petition be submitted for decision.

Cecil Tse-Hsing Hsu, SR AC 99-278927; 89002180500
5-15-93 to 3-31-97, $166,699.38 Tax, $41,674.86 Penalty, Fraud
For Petitioner: Cecil Tse-Hsing Hue
For Sales and Use Tax Department: Kevin Hanks, Hearing Representative
Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.
Issues: Whether the understatement of taxable sales is excessive because it includes certain non-sale items (loans) and nontaxable sales for resale.
Whether relief from the fraud penalty is warranted.
Action: Upon motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the petition be submitted for decision.

Eid Adeeb Asmar, SY AA 99-309139; 89002193710
7-1-94 to 6-30-97, $162,524.86 Tax, $16,252.21 Penalty, Negligence
For Petitioner: No Appearance
For Sales and Use Tax Department: Carla Caruso, Counsel
Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.
Issues: Whether the evidence shows that the disallowed sales for resale were in fact valid sales for resale.
Whether relief from the negligence penalty is warranted.
Action: Upon motion of Mr. Andal, seconded by Mr. Chiang and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the petition be redetermined as recommended by the Appeals Section.

Mohamed A. Mandour, SR EH 99-651810; 16292
3-1-95 to 12-31-97, $17,816.01 Tax, $00.00 Penalty, Negligence
For Petitioner: No Appearance
For Sales and Use Tax Department: Kevin Hanks, Hearing Representative
Action: The Board took no action.

Juan A. & Martha G. Soria, TK MT 44-009050; 26648, 26649
10-1-93 to 9-30-95, $5,545.18 Tax, $00.00 Penalty
7-1-97 to 12-31-98, $14,158.95 Tax, $00.00 Penalty
For Petitioner: Juan A. Soria
Thomas Cano, Attorney
For Sales and Use Tax Department: Janet Vining, Counsel
Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.
Issues: Whether petitioners are liable for payment of the Underground Storage Tank Maintenance Fee.
Whether the Department calculated the Underground Storage Tank Maintenance Fee properly.
Action: Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the petition be redetermined as recommended by the Appeals Section. The Board directed staff to acquire copies of the Sales and Use Tax returns from the tenant for the periods of which the amounts due were estimated and to reconcile the actual return information with the redetermined amounts.

Nadia Hassan Ebrahim, TK MT 44-039128; 32344
6-1-95 to 12-31-98, $15,448.69 Fee, $1,544.88 Penalty, Failure to File
For Petitioner: No Appearance
For Sales and Use Tax Department: Janet Vining, Counsel
Action: The Board took no action.

John P. Wright & Bryan Keith Kest, SR AS 99-991064; 89002456160
4-1-97 to 6-30-97, $11,137.50 Tax, $1,113.75 Penalty, Failure to File
For Petitioner: No Appearance
For Sales and Use Tax Department: Carla Caruso, Counsel
Action: The Board took no action.

B & D Litho, Inc., SC OH 30-690550; 89000871770
7-1-93 to 6-30-96, $2,332.85 Tax
For Petitioner: Steven Gaynor
For Sales and Use Tax Department: Warren Astleford, Counsel
Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.
Issues: Whether petitioner's activities in this state are sufficient for petitioner to be considered "engaged in business" in this state for purposes of Revenue and Taxation Code section 6203.
Whether petitioner is responsible for collecting the use tax on transactions where petitioner made sales for resale to out-of-state retailers who are not engaged in business in the state and at the instruction of the out-of-state retailers arranged for the property to be shipped by common carrier to the end users in this state.
Action: Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the petition be redetermined as recommended by the Appeals Section. The Board directed staff to reconcile information on a list of accounts to ensure appropriate adjustments have been made for use tax paid.
Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered the Appeals Section to prepare a memorandum opinion.

Juan L., Estela M. & Manuel Bustamante, SR AC 13-870285; 55385
4-1-88 to 6-30-91
For Petitioner: No Appearance
For Sales and Use Tax Department: Warren L. Astleford, Counsel
Contribution Disclosures pursuant to Government Code Section 1526. No contributions were disclosed.
Action: The Board took no action.

Avery Petroleum Company, SR EA 99-370464; 89002221300
7-1-94 to 6-30-97, $28,949.48 Tax, $00.00 Penalty, Negligence
For Petitioner: No Appearance
For Sales and Use Tax Department: Kevin Hanks, Hearing Representative
Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.
Issues: Whether the evidence establishes that the purchase segregation test results in an excessive ratio of taxable to total merchandise purchases.
Whether the evidence establishes that the shelf test markup is excessive.
Action: Upon motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the petition be redetermined as recommended by the Appeals Section.

FINAL ACTION ON APPEALS HEARD MARCH 7, 2001

Mr. Andal moved to redetermine the petition of Michael Doria, SR AC 13-825281; 89000084350. The motion was seconded by Mr. Klehs but failed to carry. Mr. Klehs and Mr. Andal voting yes, Mr. Parrish and Mr. Chiang voting no, Ms. Mandel abstaining. The Board deferred consideration of this matter.

Upon motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the petition of UCAR Composites, Inc., SR EAA 24-882239; 52793, be redetermined as recommended by the Appeals Section.

Upon motion of Mr. Klehs, seconded by Mr. Andal and unanimously carried, Mr. Parrish, Mr. Chiang, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, the Board ordered that the petition of Thu Hoa Thi Nguyen, SR ARH 97-017205; 36605, be redetermined as recommended by the Appeals Section.

Mr. Klehs moved that the petition of Cecil Tse-Hsing Hsu, SR AC 99-278927; 89002180500, be redetermined. The motion was seconded by Mr. Andal. No vote was taken. Mr. Parrish made a substitute motion to reduce the fraud penalty to negligence. The motion failed for lack of a second.

Upon motion of Mr. Chiang, seconded by Mr. Parrish and duly carried, Mr. Parrish, Mr. Chiang and Ms. Mandel voting yes, Mr. Klehs and Mr. Andal voting no, the Board ordered that the petition be submitted for decision, granting the petitioner 30 days to submit additional documentation and the Appeals Section 30 days to bring the matter back to the Board for a final recommendation.

BUSINESS TAXES APPEALS HEARINGS

Yon Hee Oh, SR AP 99-689496, 89002359990
1-1-95 to 12-31-97
For Petitioner: No Appearance
For Sales and Use Tax Department: Kevin Hanks, Hearing Representative
Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.
Action: Upon motion of Mr. Andal, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Andal and Ms. Mandel voting yes, Mr. Chiang not participating, the Board ordered the petition be redetermined as recommended by the Appeals Section.

The Board adjourned at 3:35 p.m.

The foregoing minutes are adopted by the Board on May 31, 2001.