1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 5901 GREEN VALLEY CIRCLE 3 CULVER CITY, CALIFORNIA 4 5 6 7 8 REPORTER'S TRANSCRIPT 9 JUNE 16, 2010 10 CORPORATE FRANCHISE AND PERSONAL INCOME TAX HEARING 11 APPEAL OF 12 ELISABETH BOSSINGHAM 13 NO. 486595 14 AGAINST PROPOSED ASSESSMENT OF 15 ADDITIONAL INCOME TAX 16 17 18 19 20 21 22 23 24 Reported by: Juli Price Jackson 25 CSR No. 5214 26 27 28 1 1 P R E S E N T 2 For the Board Betty T. Yee of Equalization: Chair 3 Jerome E. Horton 4 Vice-Chair 5 Barbara Alby Acting Member 6 Michelle Steel 7 Member 8 Marcy Jo Mandel Appearing for John 9 Chiang, State Controller (per Government Code 10 Section 7.9) 11 Diane G. Olson Chief 12 Board Proceedings Division 13 14 For Board of Anthony Epolite Equalization Staff: Staff Counsel 15 16 For Franchise Tax Suzanne Small 17 Board: Tax Counsel 18 Jozel Brunett Tax Counsel 19 20 For Appellant: Bret Bossingham 21 Representative 22 23 ---oOo--- 24 25 26 27 28 2 1 5901 GREEN VALLEY CIRCLE 2 CULVER CITY, CALIFORNIA 3 JUNE 16, 2010 4 ---oOo--- 5 MS. YEE: Our next matter? 6 MS. OLSON: Our next matter is B13, 7 Elisabeth Bossingham. 8 Please come forward. 9 MS. YEE: Appeals? 10 MR. EPOLITE: Madam Chairwoman, Members of the 11 Board, there are three questions before you in this 12 matter. 13 First, whether Appellant has demonstrated an 14 error in the underlying tax assessments; second, whether 15 Appellant has shown reasonable cause for abatement of 16 the late filing penalties imposed for each the appeal 17 years; and third, whether the Board should impose a 18 frivolous appeal. 19 MS. YEE: Thank you, Mr. Epolite. 20 Good morning. 21 MR. BOSSINGHAM: Good morning. Thank you for 22 appearing before me today. 23 My parents gave me the name of Brett Alan 24 Bossingham. 25 MS. YEE: Okay. 26 MR. BOSSINGHAM: And I gave my wife the name of 27 Elisabeth Ann Bossingham when we were married. And I'm 28 here for her today. 3 1 MS. YEE: Okay, you have ten minutes for your 2 presentation, sir. 3 MR. BOSSINGHAM: Thank you. 4 In the interest of full disclosure, does the 5 Board -- does any Board Member or the opposing counsel 6 personally have any claim against Elisabeth Bossingham 7 or know of any party that does? 8 MS. YEE: I don't believe so, but I'm going to 9 have Appeals respond to the question. 10 You can continue, we'll -- 11 MR. BOSSINGHAM: Okay. My question is to you 12 or opposing party. 13 If there is no response, I want to let the 14 record show there is just no response. 15 MS. YEE: Okay. 16 MR. BOSSINGHAM: I interpret that as a no. 17 And is there any objection to that? 18 Let the record stand, there is no response to 19 my question for objections. 20 Does the Board have the authority to dismiss an 21 FTB claim due to the lack of evidence under the 22 California Rules of Evidence? 23 I am sorry, I was asking a question. I'll 24 repeat it. 25 MS. YEE: Mr. Bossingham, you're not going to 26 get a response to your questions. 27 MR. BOSSINGHAM: Okay, let the record show 28 there's no response to my question there. 4 1 These proceedings are properly notified to be 2 under the California Rules of Evidence, Exhibit U, 3 page 5; subpages 15 -- excuse me, 16, 17 under 4 Exhibit X. The FTB failed to object to our standing and 5 notice dated February 4th, 2009, Exhibit T. 6 The proposed assessee, Elisabeth Bossingham, 7 never acquiesced her rights accrued to the inferior 8 statute process of the BOE, Board of Equalization, and 9 the FTB, Federal Tax Board. 10 This legal position is acknowledged by the 11 Revenue and Taxation Code, Section 4, Exhibits S and the 12 notice dated February 4th, 2009, Exhibit T. 13 Issues, can I demonstrate, an error in the 14 assessment of tax? 15 Yes. One, proper assessment of tax requires 16 personal knowledge of the nature of the contracts and 17 life in standing of the proposed assessee, Elisabeth 18 Bossingham. The FTB has not brought forth any witnesses 19 or substantive testimony, Exhibit U, page 12, subpage 44 20 and 45. 21 Two, the primary source of information that the 22 FTB relies on for its proposed assessment was contacted 23 in the December of 2009. The source was informed of 24 errors by -- and verified affidavit. The source was 25 unwilling to correct the erroneous information and 26 responded to our request with copies of erroneous W2 27 forms and to refer to the governmental authorities, 28 Exhibit W. 5 1 Three, since the only source for correct 2 firsthand, substantive evidence concerning the taxable 3 numerical facts noted on the amended returns of 4 Elisabeth Ann Bossingham is Elisabeth Ann Bossingham 5 herself. 6 The Board of Equalization should find, as a 7 matter of proper application of law, that the ultimate 8 burden of proof shifts to the FTB, Catlin versus 9 Commission of the Internal Revenue, 754 F2d 921, 11th 10 Circuit, 30585. 11 Should the Board find in favor of the proposed 12 assessee? 13 Yes. Elisabeth Bossingham cannot prove a 14 negative. Proposed assessee does not have the burden of 15 proving error in the FTB's proposed assessment. The 16 amended returns were prepared for more clarity and 17 statements made on the amended returns have not been 18 refuted by any source or the FTB. 19 Two, objections were raised during the -- 20 concerning the numerical figures of the FTB proposed 21 assessment and those rejections still remain in effect 22 today, pages 6, 7, 8, subpages 18 through 27. 23 Three, the FTB has offered a settlement via 24 letter offering to settle any and all claims, tax claims 25 from 2000-2008, check was negotiated and cleared. 26 Settlement was made in good faith for the benefit of the 27 State, Exhibit R. 28 Four, no contract was entered into with the FTB 6 1 or BOE to create a tax liability that is claimed in the 2 proposed assessments by the FTB. The FTB has not 3 presented any evidence of a contract. 4 Five, Elisabeth Bossingham has acted in honor 5 and properly conformed to all laws that are applicable 6 to her status in the standing. 7 Demonstration for reasonable cause for late 8 filings. Elisabeth Bossingham requested information 9 from public officials regarding the nature of the 10 filings beginning in the summer of 2000. No response 11 was given, Exhibits BB, CC, DD, EE, FF and GG. 12 Elisabeth Bossingham received three letters 13 from attorneys personally addressed to her regarding the 14 nature of tax liabilities and returns, Exhibits Y, Z and 15 AA. 16 Relying on the good faith instructions from the 17 attorneys to learn about the Tax Code and due to the 18 fact that the public officials did not respond to the 19 questions made in good faith. There is a reasonable gap 20 in time to learn the applicable law. 21 Please review the attorneys' letters for their 22 instructions and educated opinions on filing 23 requirements. 24 Are these Appeals frivolous? 25 No. Elisabeth Bossingham's life and status is 26 a right existing or accrued as acknowledged in Section 4 27 of the Revenue and Taxation Code and in Article 1, 28 Section 1 of the California Constitution, Exhibit S, and 7 1 as such, her life is not a subject of the California 2 Revenue and Tax Action Code (verbatim.) 3 Two, Elisabeth Bossingham's place into the 4 public forum by the verified affidavit of Sojourn 5 (verbatim) status, certified into the public record by 6 the California Secretary of State, Apostille No. 7 4711112. 8 Three, FTB suggests that appeals be filed if 9 you don't agree with their assessment. The questions 10 raised on February 4th still stand today. Objections 11 raised during the due process hearing are also still 12 standing. Since it's the Board's practice to make 13 informal decisions which are not precedential and the 14 Board limits these hearings to the questions raised by 15 the FTB, what form is the proper venue to have the 16 questions addressed in the letter dated February 4th, 17 2009, Exhibit D? 18 And with that final question, my statement has 19 ended. 20 MS. YEE: Thank you, Mr. Bossingham. 21 Let us hear from the Franchise Tax Board and 22 we'll give you five minutes on rebuttal. 23 MS. SMALL: Good morning, my name is Suzanne 24 Small. I represent the Franchise Tax Board in this 25 matter, Chairwoman, Members. And to my right is Jozel 26 Brunett, my colleague. 27 As fully briefed in Respondent's opening brief, 28 Dr. Bossingham failed to report her entire wages from 8 1 the Visalia Medical Clinic on the returns that she filed 2 based on the W2 information reported to the Franchise 3 Tax Board and also to the IRS. 4 The assessments were weighed, based on her 5 wages and some K1 income. Clearly she failed to report 6 this on her tax returns and that was the reason for the 7 NPAs. 8 If you have any questions about the assessments 9 or anything else raised in this matter, I'd be happy to 10 address them. 11 MS. YEE: Thank you, Ms. Small. 12 Mr. Bossingham, you have five minutes. 13 MR. BOSSINGHAM: Thank you. 14 The proposed assessee did contact the primary 15 source of the information the FTB is relying on and we 16 did attempt to correct any errors that we believe were 17 made. 18 There was a failure on the primary source to 19 make those corrections. So, the only source, again, for 20 information of substantive evidence or firsthand 21 knowledge is Elisabeth Bossingham. 22 Give me a moment, please? 23 I think I've concluded my statement. Thank 24 you. 25 MS. YEE: Thank you very much, Mr. Bossingham. 26 Questions, Members? 27 Very well, hearing none, may I have a motion, 28 please? 9 1 MR. HORTON: Move to take it under submission. 2 MS. YEE: Motion by Mr. Horton to take this 3 matter under submission. 4 MS. ALBY: Second. 5 MS. YEE: Second by Ms. Alby. 6 Without objection, that motion carries. 7 Mr. Bossingham, we will discuss your matter 8 later today. And we have all of the additional 9 information here. We will review it and send you 10 written notice of our decision. 11 MR. BOSSINGHAM: Thank you very much. 12 MS. YEE: Thank you very much. 13 ---o0o--- 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 1 REPORTER'S CERTIFICATE 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, JULI PRICE JACKSON, Hearing Reporter for the 8 California State Board of Equalization certify that on 9 JUNE 16, 2010 I recorded verbatim, in shorthand, to the 10 best of my ability, the proceedings in the 11 above-entitled hearing; that I transcribed the shorthand 12 writing into typewriting; and that the preceding pages 1 13 through 10 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: July 19, 2010 17 18 19 ____________________________ 20 JULI PRICE JACKSON 21 Hearing Reporter 22 23 24 25 26 27 28 11