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 29, 2012 10 11 12 13 14 15 FINAL ACTIONS 16 17 18 19 20 21 22 23 24 25 26 27 REPORTED BY: Kathleen Skidgel 28 CSR NO. 9039 1 1 P R E S E N T 2 3 For the Board Jerome E. Horton of Equalization: Chairman 4 5 Michelle Steel Vice-Chairwoman 6 7 Betty T. Yee Member 8 9 Marcy Jo Mandel Appearing for John 10 Chiang, State Controller (per Government Code 11 Section 7.9) 12 Diane G. Olson 13 Chief Board Proceedings Division 14 15 For Board Staff: David Levine Tax Counsel 16 17 ---oOo--- 18 19 20 21 22 23 24 25 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 FEBRUARY 29, 2012 4 ---oOo--- 5 MR. HORTON: Ms. Olson. 6 MS. OLSON: Our next items are those matters 7 that have been taken under submission. And our first 8 one is C3, Vincent Frere. 9 ---oOo--- 10 C3 VINCENT FRERE 11 NO. 475376 (KH) 12 ---oOo--- 13 MR. HORTON: Okay. Members, discussion? 14 Is there a motion? 15 MS. YEE: I'm going to move to adopt the staff 16 recommendation. 17 MR. HORTON: Move to adopt staff 18 recommendation, Member Yee. Second, Member Mandel. 19 MS. STEEL: Objection. 20 MR. HORTON: Objection noted. 21 Ms. Olson, uh, please call the roll. 22 MS. OLSON: Mr. Horton. 23 MR. HORTON: Horton, aye. 24 MS. OLSON: Ms. Steel. 25 MS. STEEL: Steel, no. 26 MS. OLSON: Ms. Yee. 27 MS. YEE: Aye. 28 MS. OLSON: Ms. Mandel. 3 1 MS. MANDEL: Aye. 2 MS. OLSON: Motion carries. 3 ---oOo--- 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 1 MR. HORTON: Ms. Olson. 2 MS. OLSON: Our next item is C4, Richard L. 3 Garrett. This is a waived appearance. 4 ---oOo--- 5 C4 RICHARD L. GARRETT 6 NO. 467929 7 ---oOo--- 8 MR. HORTON: Discussion, Members? 9 MS. MANDEL: Um -- 10 MR. HORTON: Ms. Mandel. 11 MS. MANDEL: I had a question about the 12 finality penalty because the taxpayer's petition had 13 said that he had asked his prior person to file and the 14 guy didn't. I don't know exactly what it said. But the 15 petition was filed by a representative or by the 16 taxpayer himself? 17 MR. LEVINE: I believe that the new rep filed 18 the appeal late. 19 MS. MANDEL: Okay. And he -- and was 20 advised -- has been advised to get something from the 21 taxpayer to say -- to say that, right? And we didn't 22 get anything in. 23 MR. LEVINE: We do know that the appeal was 24 filed, by the rep, late. 25 MS. MANDEL: Right. And I have a note that 26 Appeals sent an e-mail to the rep, seeking a statement 27 from the taxpayer. 28 MR. LEVINE: Yeah. We haven't received a 5 1 request for relief, and we discussed the topic in the 2 D&R. 3 MS. MANDEL: Okay. 4 MR. LEVINE: So, we don't have a recommendation 5 to grant or deny -- to deny, except for our discussion, 6 because we don't have the request. We -- it's not 7 eligible. 8 MS. MANDEL: Oh, he didn't actually ask. 9 MR. LEVINE: Right. 10 MS. MANDEL: It just explained why it was 11 late. 12 MR. LEVINE: Right. 13 MS. MANDEL: Okay. 14 MR. HORTON: Members? 15 MS. YEE: Move to adopt the staff 16 recommendation. 17 MR. HORTON: Moved by Member Yee to adopt staff 18 recommendation. Second by Member Mandel. 19 Objection? None noted. Such will be the 20 order. 21 MS. YEE: Oh, Mr. Chairman, I'm sorry. 22 MR. HORTON: Yes. 23 MS. YEE: I meant, for this particular motion 24 and the one prior, um, to also direct staff to inform 25 the petitioner of the Offer in Compromise Program. 26 MR. HORTON: Okay. So noted. 27 ---oOo--- 28 6 1 MR. HORTON: Ms. Olson. 2 MS. OLSON: Our next item is C5, Sweetheart 3 Cabinet Makers, Incorporated. And this was a waived 4 appearance. 5 ---oOo--- 6 C5 SWEETHEART CABINET MAKERS, INC. 7 NO. 387045 (JH) 8 ---oOo--- 9 MR. HORTON: Discussion, Members? 10 MS. YEE: I'll make a motion to adopt the staff 11 recommendation. 12 MR. HORTON: Moved by Member Yee to adopt staff 13 recommendation. Second by Member Mandel. 14 MS. YEE: And same direction with respect to 15 the Offer in Compromise Program. 16 MR. HORTON: Same direction in an Offer in 17 Compromise. 18 Objection? None noted. Such will be the 19 order. 20 ---oOo--- 21 22 23 24 25 26 27 28 7 1 MS. OLSON: Our next item is C7, Eloy Vargas Tejada. 2 ---oOo--- 3 C7 ELOY VARGAS TEJADA 4 NO. 506556 5 ---oOo--- 6 MR. HORTON: Members? 7 MS. STEEL: Um, I want to have a motion to 8 adopt the staff recommendations, but, uh, we going to 9 lower the average daily sales to $464, came out from the 10 observation test, instead of $500 daily estimate. And, 11 um, is that what -- the taxpayer said that they closed 12 Sundays? 13 MR. LEVINE: Yes. 14 MS. YEE: Yes. 15 MS. STEEL: So, yeah. We, um -- you know, 16 those 900 whatever days, 15 days and we deducted -- we 17 already did? 18 MR. LEVINE: We already deducted all the 19 Sundays -- 20 MS. STEEL: Okay. 21 MR. LEVINE: -- and also added, um -- 22 MS. STEEL: Holidays. 23 MR. LEVINE: -- I think it was, two days per 24 quarter -- 25 MS. STEEL: Okay. 26 MR. LEVINE: -- for vacations. 27 MS. YEE: Uh-huh. 28 MS. STEEL: Then my motion is only for, uh, the 8 1 lower the taxable sales for $464 per day instead of 500 2 days. 3 MS. YEE: Okay. 4 MR. HORTON: Yeah. I would then just offer 5 this for a discussion, um, relative to the motion. The 6 Department indicated that subsequent to the audit in 7 full, uh, disclosure, education, with going through that 8 process, that the taxpayers began to report their sales, 9 uh, more accurately. And that more accurate reporting 10 of the sales reflected an average of $409 a day. Just 11 for your -- 12 MS. STEEL: What was that? 13 MR. HORTON: The more accurate reporting of the 14 sales, subsequent to the actual conducting of the audit, 15 um, reflected a $409 a day. 16 MS. MANDEL: For December of -- 17 MR. HORTON: For December. Seems to be 18 consistent. So -- 19 MS. YEE: Mm-hmm. 20 MR. HORTON: -- we're in there. But I just 21 want to put that on the table for consideration. 22 MS. STEEL: So, we're going to lower to $409 23 per day sales. 24 MS. YEE: Yeah. 25 MS. STEEL: Instead of 500 then. 26 MS. YEE: Mm-hmm. 27 MS. STEEL: Okay. That's my motion. 28 MR. HORTON: Is there a second? 9 1 MS. YEE: I'll second. 2 MR. HORTON: Second by -- moved by Member Steel 3 to reduce the average daily sales to $409 a day. Second 4 by Member Yee. 5 Without objection, such will be the order. 6 Ms. Olson. 7 MS. OLSON: That concludes our business. 8 MR. HORTON: Thank you very much, uh, Members, 9 associates, guests. 10 Meeting of the Board of Equalization is hereby 11 adjourned. 12 ---oOo--- 13 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, KATHLEEN SKIDGEL, Hearing Reporter for the 8 California State Board of Equalization certify that on 9 February 29, 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 10 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: March 5, 2012 17 18 19 ____________________________ 20 KATHLEEN SKIDGEL, CSR #9039 21 Hearing Reporter 22 23 24 25 26 27 28 11