Approved 2000 Minutes - Wednesday October 4, 2000

The Board met at the San Diego County Administration Building at 1600 Pacific Highway, Room 310, San Diego, at 9:00 a.m. with Vice Chairman Parrish, Mr. Klehs and Mr. Chiang present, and Ms. Mandel present on behalf of Dr. Connell in accordance with Government Code Section 7.9.

FINAL ACTION ON PETITIONS HEARD OCTOBER 3, 2000

Upon motion of Mr. Klehs, seconded by Mr. Chiang and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the petition of LEARAF, Inc., SR BH 19-720223-010; 89000273570, be redetermined as recommended by the Appeals Section.

 

Upon motion of Mr. Chiang and seconded by Mr. Parrish and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the petition of Joanne Flowers, SR EH 25-868858-010; 89000600230, be granted.

 

Upon motion of Mr. Klehs, seconded by Mr. Chiang and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the petition of David Ronald Ramirez dba Coast Fund Raising, SR FH 14-775082-010; 89000129980, be redetermined as recommended by the Appeals Section.

BUSINESS TAXES APPEALS HEARINGS

Richard L. Bellon, SY FH 25-847775-010; 89000587660

1-1-93 to 12-31-95, $15,680.42 Tax

For Petitioner: No Appearance
For Sales and Use Tax Department: Sharon Jarvis, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issue:Whether petitioner's taxable gross receipts from his "to go" "combination" sale of a cold sandwich, chips, and a carbonated beverage consist of the full advertised lump price or only the retail selling price of the carbonated beverage.

Action: Upon motion of Mr. Klehs, seconded by Mr. Chiang and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the petition be redetermined as recommended by the Appeals Section.

FINAL ACTION ON PETITIONS HEARD OCTOBER 3, 2000

The Board submitted the petition of Issa T. and Muna R. Salomi, SR FH 25-927443-010; 89000635060, pending the adoption of the October 31, 2000, Business Taxes Committee minutes, regarding the cigarette buydown issue.

 

Upon motion of Mr. Klehs, seconded by Ms. Mandel and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the petition of Cornett Taping Corporation, SY EH 97-021247-010; 89002037860, be redetermined to reduce the measure of tax by the new documentation presented at the hearing and redetermine the remainder.

 

Upon motion of Mr. Klehs, seconded by Mr. Chiang and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the petition of Alfonso Hernandez, SR AS 18-665740-010; 89000234330, be redetermined as recommended by the Appeals Section.

Upon motion of Ms. Mandel, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the petition of James Edward Pettey, SR FH 99-006782-003; 89002101980, be redetermined as recommended by the Appeals Section.

Upon motion of Mr. Klehs, seconded by Mr. Chiang and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the petition of Commercial Press, Inc., SR FH 25-684555-010; 89000527080, be redetermined as revised by the Appeals Section.

 

Upon motion of Mr. Chiang, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the petition of Interactive, Inc., SY FH 25-669490-010; 89000523650, be redetermined as recommended by the Appeals Section.

 

Upon motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the petition of Mirage Auto Sales, SR FH 99-363501-010; 19564, be redetermined as recommended by the Appeals Section.

FRANCHISE AND INCOME TAXES HEARINGS

Steven R. Brickman, 99A-0129; 89002465160

1992, $1.00 or more

For Appellant: Steven R. Brickman
For Franchise Tax Board: Jozell Brunett, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issue:Whether appellant has demonstrated that respondent abused its discretion in denying appellant's request for abatement of interest.

Appellant's Exhibit:Bankruptcy papers (Exhibit 10.3)

Action: Mr. Parrish made a motion to reduce the assessment to $488.00. The motion failed for lack of a second.

Upon motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the appeal be submitted for decision.

Exhibits to these Minutes are incorporated by reference.

Abbas Kayvan, 27627

1995, $1,147.00 Assessment

For Appellant: Abbas Kayvan
For Franchise Tax Board: Jozell Brunett, Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issues:Whether the question of interest abatement is properly before the Board.

Whether appellant has demonstrated that respondent abused its discretion in denying appellant's request for abatement of interest.

Appellant's Exhibit:Request for Abatement of Interest (Exhibit 10.4)

Action: Upon motion of Mr. Chiang, seconded by Mr. Klehs and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the appeal be submitted for decision.

George I. Darrow, 98A-1249; 89002460500

1988, $13,557.00 Assessment, $4,067.10 Penalties

1990, $ 2,325.00 Assessment, $ 697.50 Penalties

For Appellant: L. Maxwell Anastopulos, Attorney
Allan Darrow, Witness
George Darrow
For Franchise Tax Board: Bruce Langston, Tax Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issues:Whether appellant has shown that respondent's determination, based on a federal audit report, that a wire transfer to appellant from Switzerland was taxable income, is incorrect.

Whether appellant has shown that respondent's determination, based on a federal audit report, that a currency deposit in appellant's bank account in the amount of $9,900 from the sale of a watch was taxable income, is incorrect.

Whether appellant has shown that respondent's determination, based on a federal change, that a check received by appellant in the amount of $30,318 was taxable income, is incorrect.

Appellant's Exhibit: Letter (Exhibit 10.5)

Action: Upon motion of Mr. Klehs, seconded by Mr. Parrish and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered to grant Issue 2, reversing the action of the Franchise Tax Board.

Upon motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the remainder of the appeal be submitted for decision.

Steven Rasky, 36634

1993, $4,290.67 Claim for Refund

For Claimant: Steven Rasky
For Franchise Tax Board: Sherman Eatmon, Tax Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issues:Whether appellant has overcome the presumptive correctness of a federal determination by showing that the Internal Revenue Service (IRS) erroneously included in his Schedule C gross receipts a loan repayment, and disallowed two Schedule C deductions that represented escrow closing costs appellant paid on behalf of his clients.

Whether the Board has jurisdiction to review appellants' request for an abatement of interest for 1993.

Whether appellant has shown reasonable cause for the abatement of the accuracy-related penalties imposed for 1993.

Appellant's Exhibit:Letters and Cancelled Checks (Exhibit 10.6)

Respondent's Exhibit:Notice of Action (Exhibit 10.7)

Action: Upon motion of Mr. Klehs, seconded by Ms. Mandel and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the claim for refund be submitted for decision.

The Board recessed at 10:40 a.m. and reconvened at 10:50 a.m. with

Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel present.

Terry L. Hull, 30044

1997, $3,343.00 Assessment, $835.75 Penalties, Delinquent

$835.75 Penalties, Demand

For Appellant: Terry Hull
For Franchise Tax Board: Mark McEvilly, Tax Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issues:Whether appellant is subject to California's income tax laws.

Whether respondent properly determined appellant's tax liability.

Whether appellant has brought a frivolous or groundless position before the Board.

Action: Upon motion of Mr. Klehs, seconded by Mr. Parrish and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered to reduce the assessment, delinquent penalty and the demand penalty as recommended by the Franchise Tax Board.

Henry E. Newman, Jr., 29500

1996, $ 677.26 Assessment, Penalties $169.32

1997, $1,852.00 Assessment, Penalties $940.50

For Appellant: Henry E. Newman
For Franchise Tax Board: Mark McEvilly, Tax Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issue:Whether appellant has demonstrated that he did not earn "gross income" and so is not liable for California's Personal Income Tax.

Appellant's Exhibit:Computation of Taxable Income for 1996 (Exhibit 10.8)

Computation of Taxable Income for 1997 (Exhibit 10.9)

Action: Mr. Parrish moved to add a $250.00 frivolous appeal penalty for each tax year on appeal but the motion failed for lack of a second.

Upon motion of Mr. Klehs, seconded by Mr. Chiang and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the appeal be submitted for decision.

David and Dena Williams, 33741

1996, $91,130.00 Assessment, $22,782.50 Penalties

For Appellant: Marc McDonald, Representative
For Franchise Tax Board: Mark McEvilly, Tax Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issue:Whether appellants have demonstrated that they are not residents of California such that they are not subject to the California Personal Income Tax.

Action: Upon motion of Mr. Klehs, seconded by Mr. Parrish and duly carried, Mr. Parrish, Mr. Klehs, and Ms. Mandel voting yes, Mr. Chiang voting no, Mr. Andal absent, the Board ordered to deny appellant's request to file subpoenas.

Mr. Klehs moved to defer this appeal to the next Board meeting, seconded by

Ms. Mandel but failed to carry, Mr. Klehs and Mr. Parrish voting yes, Mr. Chiang and Ms. Mandel voting no, Mr. Andal absent.

Upon motion of Mr. Klehs, seconded by Ms. Mandel and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the appeal be submitted for decision.

The Board recessed at 12:00 p.m. and reconvened at 12:05 p.m. with

Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel present.

FRANCHISE AND INCOME TAXES HEARINGS

Joseph L. Gallagher, 41108

1996, $1,125.00 Claim for Refund

For Claimant: No Appearance
For Franchise Tax Board: Sherman Eatmon, Tax Counsel

Contribution Disclosures pursuant to Government Code Section 15626: No contributions were disclosed.

Issue:Whether appellant has demonstrated reasonable cause to abate a delinquent filing penalty.

Action: Upon motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the claim for refund be denied, sustaining the action of the Franchise Tax Board.

FINAL ACTION ON PETITIONS HEARD OCTOBER 4, 2000

Upon motion of Mr. Chiang, seconded by Ms. Mandel and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the assessment of Steven R. Brickman, 89002465160, be denied sustaining the action of the Franchise Tax Board.

Upon motion of Mr. Chiang seconded by Ms. Mandel and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the assessment of Abbas Kayvam, 27627, be denied sustaining the action of the Franchise Tax Board.

Upon motion of Mr. Klehs, seconded by Ms. Mandel and duly carried,

Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Parrish voting no, Mr. Andal absent, the Board ordered to deny Issues 1 & 3 in the appeal of George I. Darrow, 89002460500, sustaining the action of the Franchise Tax Board.

Upon motion of Mr. Klehs, seconded by Mr. Parrish and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered to modify the action of the Franchise Tax Board in the appeal of Steven Rasky, 36634, granting the $3,842.00 loan repayment and $12,225.00 closing costs and sustaining the Franchise Tax Board on the remainder.

Upon motion of Mr. Klehs, seconded by Mr. Parrish and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the assessment of Henry E. Newman, Jr., 29500, be denied, sustaining the action of the Franchise Tax Board and imposing a $500.00 frivolous appeal penalty per year.

Upon motion of Mr. Klehs, seconded by Mr. Parrish and unanimously carried, Mr. Parrish, Mr. Klehs, Mr. Chiang and Ms. Mandel voting yes, Mr. Andal absent, the Board ordered that the assessment of David and Dena Williams, 33741, be denied sustaining the action of the Franchise Tax Board and imposing a $5,000.00 frivolous appeal penalty.

The Board adjourned at 12:10 p.m.

The foregoing minutes are adopted by the Board on February 15, 2001