1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 8 REPORTER'S TRANSCRIPT 9 FEBRUARY 28, 2012 10 11 12 13 14 15 FINAL ACTIONS 16 17 18 19 20 21 22 23 REPORTED BY: JULI PRICE JACKSON 24 CSR NO. 5214 25 26 27 28 1 1 P R E S E N T 2 3 For The Board Jerome E. Horton of Equalization: Chairman 4 Michelle Steel 5 Vice-Chairwoman 6 Betty T. Yee Member 7 8 Marcy Jo Mandel Appearing for John Chiang 9 State Controller (per Government Code 10 Section 7.9) 11 Diane G. Olson Chief, Board 12 Proceedings Division 13 For the Appeals Division: David Levine Tax Counsel 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 FEBRUARY 28, 2012 4 ---o0o--- 5 MS. OLSON: Our next item is those items that 6 have been taken under submission. 7 And our first item is C1a, Daniel W. Shulte and 8 C1b, Robert Wayne Kral. This was a waived appearance. 9 ---o0o--- 10 C1a DANIEL W. SHULTE 11 NO. 475423 (KH) 12 C1b ROBERT WAYNE KRAL 13 NO. 475458 (KH) 14 ---o0o--- 15 MR. HORTON: Let's take up the waived 16 appearance. Members? 17 MS. YEE: I'll move to adopt the staff 18 recommendation to redetermine and then also direct staff 19 to inform Petitioner of the Offer-In-Compromise program. 20 MR. HORTON: So moved, second by Member Steel. 21 Without objection, such will be the order. 22 ---o0o--- 23 24 25 26 27 28 3 1 MS. OLSON: Our next item is C2, Johnny Batista. 2 ---o0o--- 3 C2 JOHNNY BATISTA 4 NO. 531628 (BH) 5 ---o0o--- 6 MR. HORTON: Discussion Members? 7 MS. YEE: Mr. Chairman? 8 MR. HORTON: Member Yee? 9 MS. YEE: It's a frustrating case because the 10 records don't really guide us well, but I think -- at 11 least my gut tells me that some adjustment is probably 12 warranted here, I just am at a loss as to what. 13 But, at the very least, I would like to relieve 14 the negligence penalty. 15 MR. HORTON: Okay. Further discussion, 16 Members? Member Steel? 17 MS. STEEL: I'm going to make substitute motion 18 to adjust the -- adjust the amount. 19 From the actual invoices that they provided the 20 highest amount was 2600 on 2006 to 3000 2600 2009. I 21 don't know how we can gradually make the difference. 22 It's going to be very small tax adjustment and -- plus 23 the drop the negligence penalty. 24 MS. MANDEL: I think staff -- 25 MR. HORTON: Ms. Mandel? 26 MS. MANDEL: -- staff was prepared on 30 27 additional days of closure of the business. 28 MS. STEEL: Okay. 4 1 MS. MANDEL: Which does -- I mean, I didn't 2 want you to forget that they had done that -- that they 3 had suggested that in terms of that just -- that just 4 goes to numbers of days the business was closed, that 5 doesn't go to your point -- 6 MS. STEEL: Right. 7 MS. MANDEL: -- which is also about the 8 amount -- the days they were open. 9 MS. STEEL: But -- yeah, I totally agree but at 10 the same time that they went out to audit on December of 11 2009, I don't believe that that audit is going to be the 12 same amount as 2006 sales. 13 MS. MANDEL: Right. 14 MS. STEEL: So, I want to just adjust a little; 15 bit there. So, our staff said that highest amount that 16 they provided was 2600. So, if we can do 2006, 2600 and 17 then divide by whatever years and then 27 or 2900 is 18 next year and after that 28 -- 2900 gradually, 2, 3000 19 in 2009. So, we going to adjust a little bit of tax 20 there. 21 That's what I'm asking. 22 MS. MANDEL: Right. And I was just wondering 23 whether you -- 24 MS. STEEL: Plus 30 days -- 25 MS. MANDEL: -- yeah, that's what I was 26 wondering. 27 MS. STEEL: -- of closing -- yeah, closed days, 28 thank you. 5 1 Mr. Levine? 2 MR. LEVINE: Yes. 3 MS. STEEL: You understand what I'm saying? 4 MR. LEVINE: You want it to be 2600, graduating 5 up -- 6 MS. STEEL: 2006, yes. 7 MR. LEVINE: -- to the 30 -- 8 MS. STEEL: 3055. 9 MS. LEVINE: -- 55 that was the last year. 10 MS. STEEL: Yes. 11 MR. LEVINE: So, there'd be -- 12 MS. STEEL: And plus 30 days closure and drop 13 the negligence penalty. 14 MR. HORTON: Okay. Members, we're operating in 15 the unknown and it's even somewhat understandable why 16 we're there. 17 So, Mr. Levine, those numbers, you're able to 18 calculate based on the -- 19 MR. LEVINE: I haven't figured that out yet. 20 MR. HORTON: -- okay. So moved. Is there a 21 second? 22 MS. YEE: I'll second. 23 MR. HORTON: Second by Member Yee. 24 Objection? Hearing none, such will be the 25 order. 26 ---o0o--- 27 28 6 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 FEBRUARY 28, 2012 I recorded verbatim, in shorthand, to 10 the 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 6 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: MARCH 5, 2012 17 18 19 ____________________________ 20 JULI PRICE JACKSON 21 Hearing Reporter 22 23 24 25 26 27 28 7