1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 REPORTER'S TRANSCRIPT 8 JANUARY 21, 2009 9 10 11 12 13 14 15 16 17 18 19 Reported by: Juli Price Jackson 20 No. CSR 5214 21 22 23 24 25 26 27 28 1 1 2 P R E S E N T 3 4 For the Board Betty T. Yee of Equalization: Vice-Chair 5 Bill Leonard 6 Member 7 Michelle Steel Member 8 Marcy Jo Mandel 9 Appearing for John Chiang, State Controller 10 (per Government Code Section 7.9) 11 Diane G. Olson 12 Chief, Board Proceedings Division 13 14 15 ---oOo--- 16 17 18 19 20 21 22 23 24 25 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 JANUARY 21, 2009 4 ---oOo--- 5 MS. YEE: All right, does that conclude our a 6 appeals? 7 MS. OLSON: That concludes our oral hearings 8 for this afternoon. 9 MS. YEE: Okay, very well. 10 Okay, let's return back to the items taken 11 under submission. 12 And what I'd like to do is to dispense with 13 those and then try to also get through the nonappearance 14 calendars as well today. 15 ---o0o--- 16 B1 ARGONAUT GROUP, INC. 17 NO. 287738 18 ---o0o--- 19 MS. OLSON: Our first item is B1, Argonaut 20 Group, Inc. 21 MS. YEE: Okay, first item is B1, Argonaut 22 Group Inc., Controller's representative not 23 participating. 24 Is there a motion? 25 MS. STEEL: I move to grant the appeal unless 26 Mr. Leonard has an alternative motion. 27 MR. LEONARD: No, I'll second your motion. 28 MS. YEE: We have a motion by Ms. Steel to 3 1 grant the appeal, second by Mr. Leonard. 2 Please call the roll. 3 MS. OLSON: Ms. Yee? 4 MS. YEE: No. 5 MS. OLSON: Mr. Leonard? 6 MR. LEONARD: Aye. 7 MS. OLSON: Ms. Steel? 8 MS. STEEL: Aye. 9 MS. OLSON: Motion carries. 10 ---o0o--- 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 1 B2 MAHNAZJUDSON 2 NO. 424321 3 ---o0o--- 4 MS. YEE: Next item, B2, Mahnaz Judson. 5 Is there a motion? 6 MS. MANDEL: Move to sustain Franchise Tax 7 Board. 8 MS. YEE: Motion by Ms. Mandel to sustain the 9 Franchise Tax Board. I will second that motion. 10 Without objection, such will be the order. 11 ---o0o--- 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 1 B3 JOHN D. BOGDANOFF AND JANORA G.BOGDANOFF 2 NO. 440634 3 ---o0o--- 4 MS. YEE: Next item, B3, John D. Bogdanoff and 5 Janora G. Bogdanoff, is there a motion? 6 MS. MANDEL: Move to sustain the Franchise Tax 7 Board. 8 MS. YEE: Motion by Mandel to sustain the 9 Franchise Tax Board. I will second that motion. 10 Comment, Mr. Leonard? 11 MR. LEONARD: I'm prepared to argue to accept 12 the medical records she submitted for medical 13 incapacity, but I can't get beyond his -- 14 MS. MANDEL: Yeah. 15 MR. LEONARD: -- incapacity or lack of action. 16 And I -- I just -- 17 MS. MANDEL: I guess I should have been -- 18 MR. LEONARD: I don't understand. 19 MS. MANDEL: -- more clear about it. 20 MR. LEONARD: I don't know if there is 21 something that the Franchise Tax Board Taxpayer Rights 22 Advocate might do to investigate further. 23 MS. YEE: Ms. Kelly? 24 MR. LEONARD: Maybe we could make the ruling 25 and then ask FTB to look into it more and accept a 26 petition for rehearing if something new is uncovered? 27 MS. KELLY: The difficulty here is that he was 28 working during the period. And the standard is that he 6 1 must have been unable to manage his financial affairs by 2 reason of medically determinable physical or mental 3 impairment. 4 And, so, it's fairly highly unlikely that -- 5 MR. LEONARD: Then -- 6 MS. KELLY: -- I know it's frustrating 7 because -- 8 MR. LEONARD: I'd make the motion. 9 MS. KELLY: -- she has arguably presented 10 evidence that she qualifies. 11 MR. LEONARD: Yes. 12 MS. KELLY: Yes. 13 MS. YEE: Okay, we have a motion -- 14 MR. LEONARD: And it also strikes me -- she 15 also testified that she basically deceived him. She 16 told him things were going well. 17 If they had come before us divorced, he'd be an 18 innocent spouse. But the fact that they're together, 19 he's forgiven her for that -- 20 MS. MANDEL: And that the FTB has the money. 21 MR. LEONARD: -- the FTB has $38,000 of their 22 money, it's -- 23 MS. MANDEL: It's terrible. I mean, it's an 24 unfortunate and very sympathetic situation. 25 MS. KELLY: Well, we could simply postpone the 26 appeal and do further briefing and see if they can come 27 up with anything -- see if the Appellants can come up 28 with any evidence, anything further that goes to, you 7 1 know, his inability to manage his own financial affairs. 2 She's basically saying he was unable to. It 3 appears to be by agreement between them. The question 4 is whether or not he had any kind of physical or mental 5 impairment that prevented him. 6 And they may not just be addressing it. So, if 7 they have another chance, it's possible. 8 MR. LEONARD: I am open either way, but I'd 9 like that question asked. 10 We could rule and then direct -- or we could 11 put over and direct -- I am open either way. 12 I just -- I think -- it would be nice if the 13 Taxpayer Rights Advocate could go to him and say, "Okay, 14 what is it you don't want the public to know about what 15 happened back then?" 16 MS. KELLY: If the -- if the Board would like 17 to do that, I would recommend postponing instead of 18 making a decision today. 19 MS. YEE: There's a motion on the floor? 20 MR. LEONARD: I'm okay with holding it under 21 submission, that's certainly agreeable to me. 22 MS. MANDEL: It's not like it's in a deficiency 23 position. 24 MR. LEONARD: Yes. 25 MS. MANDEL: Well, then -- 26 MS. YEE: Without objection? 27 MS. MANDEL: Yeah, I'll withdraw the motion -- 28 whatever we have to do. 8 1 MS. YEE: Okay. 2 Ms. Mandel's withdrawing her motion, we will 3 put this matter over -- 4 MS. KELLY: Okay. 5 MS. YEE: -- pending further review of the 6 Appellant husband situation. 7 MS. KELLY: Okay. 8 MR. LEONARD: Thank you so much. 9 ---o0o--- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 1 C1 SOUTHCORP PACKAGING USA, INC. 2 NO. 224867 (EH) 3 ---o0o--- 4 MS. YEE: Okay, next item is C1 Southcorp 5 Packaging USA, Inc. Is there a motion? 6 I'm going to move to redetermine. Is there a 7 second? 8 MR. LEONARD: I'll second. 9 MS. YEE: Okay. 10 Motion by Yee, second by Mr. Leonard to 11 redetermine. 12 Without objection, such will be the order. 13 ---o0o--- 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 1 C2 CONVENIENCE ACQUISITION CO.,LLC. 2 NO. 236133 (KH) 3 ---o0o--- 4 MS. YEE: Okay. 5 MS. OLSON: Our last item is C2. 6 MS. YEE: I am sorry, appearance waived, okay, 7 thank you. 8 C2, Convenience Acquisition Company, LLC has 9 waived appearance. 10 Is there a motion? 11 MS. MANDEL: Move to redetermine. 12 MS. YEE: Motion by Ms. Mandel to redetermine. 13 I'll second that motion. 14 MS. STEEL: Objection. 15 MS. YEE: Okay, please call the roll. 16 MS. OLSON: Ms. Yee? 17 MS. YEE: Aye. 18 MS. OLSON: Mr. Leonard? 19 MR. LEONARD: No. 20 MS. OLSON: Ms. Steel? 21 MS. STEEL: No. 22 MS. OLSON: Ms. Mandel? 23 MS. MANDEL: Aye. 24 MS. OLSON: Motion fails. 25 MS. YEE: Motion fails, we'll put that matter 26 over. 27 ---o0o--- 28 11 1 . 2 REPORTER'S CERTIFICATE 3 4 State of California ) 5 ) ss 6 County of Sacramento ) 7 8 I, JULI PRICE JACKSON Hearing Reporter for the 9 California State Board of Equalization certify that on 10 JANUARY 21, 2009 I recorded verbatim, in shorthand, to 11 the best of my ability, the proceedings in the 12 above-entitled hearing; that I transcribed the shorthand 13 writing into typewriting; and that the preceding pages 1 14 through 11 constitute a complete and accurate 15 transcription of the shorthand writing. 16 17 Dated: February 9, 2009 18 19 20 ____________________________ 21 JULI PRICE JACKSON 22 Hearing Reporter 23 24 25 26 27 28 12