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 April 24, 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 George Runner Member 10 11 Marcy Jo Mandel Appearing for John 12 Chiang, State Controller (per Government Code 13 Section 7.9) 14 Joann Richmond 15 Chief Board Proceedings Division 16 17 ---oOo--- 18 19 20 21 22 23 24 25 26 27 28 2 1 5901 GREEN VALLEY CIRCLE 2 CULVER CITY, CALIFORNIA 3 APRIL 24, 2012 4 ---oOo--- 5 MR. HORTON: Ms. Richmond. 6 MS. RICHMOND: That concludes our nonappearance 7 matters. 8 Would you like to take those matters that have 9 been taken under submission? 10 MR. HORTON: No. 11 MS. STEEL: Okay. 12 MR. HORTON: Just kidding. 13 Uh, okay, Ms. Richmond, we sort of took them 14 out of -- out of order. Uh, let's take them up in the 15 order as presented on the agenda. 16 MS. YEE: Yeah. 17 MR. HORTON: Does that work for you guys? 18 Okay. 19 MS. RICHMOND: Okay. Our first item is B1, 20 James J. Martin. 21 ---oOo--- 22 B1 JAMES J. MARTIN 23 NO. 574254 24 ---oOo--- 25 MR. HORTON: Discussion, Members? 26 MS. STEEL: In this case, the taxpayer is going 27 to prepare more documents? Or -- 28 MR. HORTON: The taxpayer was asked if he had 3 1 additional documentation. He indicated, subsequent to 2 several inquiries, that he possibly could provide 3 additional documentation given the time. 4 MR. RUNNER: And I think the one key one that 5 he said -- that at least he misunderstood or had some 6 wrong advice on was the, uh -- uh, comment or discussion 7 from the, uh -- from the tribal council in regards to 8 his residency. 9 So, he seemed to have some pretty specific 10 document that he thought he could now get since he 11 thought not he shouldn't, so -- 12 MR. HORTON: Okay. 13 MR. RUNNER: Should we do a 30 -- or I'd move a 14 30/30/30. Is that appropriate? Or -- or -- I mean, I 15 don't know if he needs a 30/30/30, I guess. 16 MR. EPOLITE: That would be appropriate. 17 MR. RUNNER: That would be appropriate? 18 MR. EPOLITE: Yes. 19 MR. RUNNER: Okay. 20 MR. HORTON: Mr. Runner moves, uh, to allow the 21 tax -- a 30/30/30. Second by Member Steel. 22 Without objection, Members, such will be the 23 order. 24 ---oOo--- 25 26 27 28 4 1 MR. HORTON: Ms. Richmond. 2 MS. RICHMOND: Our next item is B3, Shirley A. 3 Tolela. 4 ---oOo--- 5 B3 SHIRLEY A. TOLELA 6 NO. 355393 7 ---oOo--- 8 MR. HORTON: Members? 9 MS. STEEL: Uh, what can we do to help this -- 10 MR. HORTON: Moved by Member Steel to adopt -- 11 oh. 12 MS. STEEL: I wanted to grant the petition. Is 13 that, uh -- can we do that? 14 MR. RUNNER: We can do what? What was the 15 question? 16 MS. STEEL: Just waive everything. 17 MR. RUNNER: Waive everything? 18 MR. EPOLITE: The Board would have to find, to 19 abate interest, that under Section 19104 that there was 20 an abuse of discretion on the part of Franchise Tax 21 Board. 22 MR. RUNNER: Hmm. 23 MS. STEEL: Question. 24 MS. MANDEL: And -- and the underlying 25 standard? 26 MR. EPOLITE: That there was no reasonable 27 basis for the assessment of interest here. 28 I mean, the alternative here is that for the 5 1 determination to go final and to counsel the taxpayer to 2 seek an offer in compromise or -- 3 MS. MANDEL: Yeah. 4 MR. EPOLITE: -- some sort of installment 5 agreement with the Franchise Tax Board once the matter 6 goes final. 7 MS. MANDEL: My -- my -- my guess is that 8 that's what she was talking about with the -- needing 9 all of the financial information, was that somebody 10 tried to -- that was my guess on that. 11 MR. EPOLITE: Well, and it could have been. 12 MS. MANDEL: I don't -- I don't have the 13 impression that she was saying she couldn't pay it. I 14 more had the impression that she just didn't think she 15 owed it. 16 MR. EPOLITE: And it could have been whether 17 she, uh, was -- Franchise Tax Board was trying to 18 determine whether she qualified for extreme financial 19 hardship under 19112 for the abatement of interest as 20 well. 21 MS. MANDEL: And they've already abated 22 interest from their first sort of error to her, all the 23 way through. 24 MR. EPOLITE: Correct. There's been no 25 interest that's been accruing on the outstanding 26 liability for three years now, since March 19th of 27 2009. 28 MS. STEEL: But this taxpayer was paying and 6 1 calling in and tried to make sure that she paid 2 everything in full. And Franchise Tax Board was -- kept 3 returning it. I mean if not, then, you know, we can at 4 least just give her showing up here that we can by 5 hourly if we're going to -- 6 MR. HORTON: Uh, Member -- 7 MS. STEEL: I'm not sure how far we really can 8 go -- 9 MS. YEE: Yeah. 10 MS. STEEL: -- in this case. 11 MR. HORTON: Member Yee. 12 MS. YEE: So the, uh, concession by the 13 Franchise Tax Board is to, um, partially grant interest 14 really from April 15th, '07 -- 15 MR. HORTON: They've already -- 16 MS. YEE: -- to March 19th. 17 MR. EPOLITE: From March 19th, 2009 forward. 18 MS. YEE: Okay. And my question is, what was 19 the date of the MPA? 20 MR. EPOLITE: Uh, was January 13th, 2009. And 21 the first, uh, erroneous refund was in April of 2009, 22 which was the refund of the $276 that was withheld with 23 the -- the, uh, pension income. 24 And it's from that time forward, from the time 25 of that erroneous refund that they've no longer been 26 accruing interest on the liability. 27 MS. YEE: Okay. 28 MR. EPOLITE: Once they made that erroneous 7 1 refund. 2 MS. YEE: Okay. I was just trying to see if 3 there was any additional period of time on the parcel. 4 MR. RUNNER: She never disputed -- 5 MR. HORTON: Um -- 6 MR. RUNNER: She never disputed this point, 7 that -- that the owing the tax. 8 MR. EPOLITE: That's correct. 9 MR. RUNNER: That's correct? 10 MR. EPOLITE: That's correct. 11 MS. STEEL: Just for interest. 12 MR. RUNNER: Just the interest. 13 MS. STEEL: For 155. 14 MR. HORTON: Yeah. 15 MR. RUNNER: I would move that we abate the 16 interest of 155. 17 MR. HORTON: Members, uh, whereas I don't 18 believe that there was an abuse of discretion, I do 19 believe that -- that greater discretion should have been 20 used. And to that degree, it created a -- a state of 21 mind that could have contributed to this problem. 22 MR. RUNNER: Mm-hmm. 23 MR. HORTON: So, uh, is there a second? 24 MS. STEEL: Second. 25 MR. HORTON: Second by Member Steel. 26 Objection, Members? 27 MS. MANDEL: Yeah. 28 MS. YEE: Yes. 8 1 MR. HORTON: So noted. 2 Uh, Ms. Richmond, please call the roll. 3 MS. RICHMOND: Mr. Horton. 4 MR. HORTON: Horton, aye. 5 MS. RICHMOND: Ms. Steel. 6 MS. STEEL: Aye. 7 MS. RICHMOND: Mr. Runner. 8 MR. RUNNER: Aye. 9 MS. RICHMOND: Ms. Yee. 10 MS. YEE: No. 11 MS. RICHMOND: Ms. Mandel. 12 MS. MANDEL: No. 13 MS. RICHMOND: Motion carries. 14 MR. HORTON: Thank you. 15 ---oOo--- 16 17 18 19 20 21 22 23 24 25 26 27 28 9 1 MR. HORTON: Ms. Richmond. 2 MS. RICHMOND: Our next item is B5, Michael B. 3 Lozada. This is a waived appearance. 4 ---oOo--- 5 B5 MICHAEL B. LOZADA 6 NO. 578331 7 ---oOo--- 8 MR. HORTON: Members. 9 MS. YEE: Uh, move to sustain the Franchise Tax 10 Board. 11 MR. HORTON: Moved by Member Yee to sustain the 12 Franchise Tax Board. Second by Member Mandel. 13 Objection? Hearing none, such will be the 14 order. 15 ---oOo--- 16 17 18 19 20 21 22 23 24 25 26 27 28 10 1 MR. HORTON: Ms. Richmond. 2 MS. RICHMOND: Our next item is C1, Chomsik 3 Pak. 4 ---oOo--- 5 C1 CHOMSIK PAK (AS) 6 NO. 516137 7 ---oOo--- 8 MR. HORTON: Members? 9 MR. LEVINE: Mr. Chairman, if I may. 10 MR. HORTON: Sure. 11 MR. LEVINE: The Department has taken a look at 12 this after the hearing, consulted with its staff to find 13 out the, uh -- more specifics on the effects of the 14 recession and was given a -- a number of 11.4 percent 15 hit for full-service restaurants. I think this is a 16 full-service restaurant; I'm not sure. 17 Anyway, the Department has concluded that it's 18 appropriate to give the benefit of the doubt and use 15 19 percent. So it has a revised recommendation for 2008, 20 which is the period for which the Department already 21 made an allowance of 10 percent. Uh, it has calculated 22 an increase to 15 percent. And for the last quarter of 23 2007 where there was, I believe, no recession 24 adjustment, the Department has calculated a 15 percent 25 adjustment. 26 Overall, the Department, uh, recommends a 27 reduction of 57 -- to the measure of 57,681, which 28 reduces it to 411,383; a little bit more than 10 percent 11 1 reduction. 2 MS. MANDEL: So the 57,681 is the additional 3 reduction? 4 MR. LEVINE: Right. 5 MS. MANDEL: Okay. 6 MR. LEVINE: The reduction to the measure of 7 tax. 8 MR. RUNNER: I would move to grant for the 9 Petitioner on the basis of the fact that there were two 10 issues that concerned me. Uh, one was the fact that, 11 um, that staff did not go back and try to look at tax 12 returns from the previous owner to determine what the 13 level of sales were while that previous owner had that 14 business. And number two, the value of the sale 15 reflects, to me, a value that is also -- much -- much 16 closer associated with the tax that was, uh -- that was, 17 uh, reported by the previous owner. 18 MR. HORTON: The motion again, please? 19 MR. RUNNER: To grant for Petitioner. 20 MR. LEVINE: Clarification? 21 MR. HORTON: Well, um -- 22 Mr. Levine? 23 MR. LEVINE: Just, uh, my understanding is 24 Petitioner concedes 7800 in tax. So I would understand 25 the petition to be of the $29,000 -- 26 MR. RUNNER: Yes. 27 MR. LEVINE: -- assessed in excess of the 28 concurrent. 12 1 MS. YEE: Right. 2 MR. RUNNER: Yes, of the disputed amount. Yes. 3 MS. STEEL: I think it's just kind of 4 mind-boggling that 10 percent because the recession, 5 too. Let's just give another five percent. You know, 6 any numbers coming out here is not really accurate 7 number for the taxpayers. 8 So, why don't we do 50 percent or 94 -- I mean 9 90 percent? I mean, I -- 10 Thank you for doing it, but that just 11 really -- 12 MR. HORTON: Member Yee. Excuse me. 13 MS. YEE: Um, I just want to say I -- I support 14 the motion, but I guess I wanted to just kind of give my 15 rationale. 16 Um, I -- I appreciate the additional 17 consideration of a downward adjustment, um, reflecting 18 the economic downturn. There were a couple issues that 19 were raised of concern for me in this particular matter. 20 Um, the primary one having to do with, um, the purpose 21 and kind of the role of what a tax clearance 22 certificate, uh, ought to be. 23 In this case we have a -- uh, escrow holder 24 that requested the certificate and, um -- and the entire 25 purchase price was withheld pending the -- I think the 26 close-out audit of the seller. Um, also I think we had 27 some language issues here. That's my -- my, uh, 28 speculation. I don't know that to be true. 13 1 But it just seems to me when, uh -- I mean in 2 some cases that we've heard there's been no tax 3 clearance certificate requested. Here there was one 4 requested, and it just felt like, uh, the purchaser was 5 getting into a situation that I think, um, he may have 6 had some, uh, reasonable assumption or maybe a lack of 7 understanding, uh, would have been, uh, certainly 8 resolved before -- before he was, uh, tied down with the 9 liability. 10 But, um, it was troubling from that standpoint. 11 So I think there are a lot of issues going on with 12 respect to how we, uh, instruct, uh, taxpayers about 13 the, uh, purpose of a tax clearance certificate. 14 MR. HORTON: Okay. Um -- 15 MS. YEE: But -- but -- but I do think there 16 are serious issues with respect to the lack of 17 documentation. 18 MR. HORTON: Yeah. 19 MS. YEE: But I -- that's -- 20 MR. HORTON: My -- Members, my concern goes to, 21 um, the lack of documentation and the direction that we 22 give the, uh, Board in conducting these types of audits. 23 Uh, I mean, they did, um, examine the records that are 24 available, acknowledge the liability as recorded and 25 reported by the taxpayer, uh, impeached the, uh -- the 26 records as they were presumed to be less than reported 27 about by actually doing a -- a -- a test. I can't 28 recall the exact test. And then the document on -- the 14 1 documents that were available, uh, that really kind of, 2 I think, uh, codified, if you will, uh, the -- the 3 essence of the reduction was the sales value. 4 He purchased it for 110, sold it for $90,000. 5 Clearly a reduction in value of the business and much 6 more reflective of any other document that we have seen. 7 And I don't remember what the calculation is, but that's 8 somewhere around a 18, 19 percent reduction, uh, in 9 value. 10 So if the subsequent -- subsequent purchase was 11 $90,000, and if we take -- if the agency, which we've 12 done, taken a position that the original purchase price 13 was reflective of the sales, the subsequent purchase 14 price should have the same relationship, uh -- so, I 15 mean, I don't know where an 18, 20 percent reduction 16 fits in with what the motion is because I haven't 17 necessarily done the math. 18 But, Mr. Levine, if you can help out. 19 MR. RUNNER: Well -- 20 MR. HORTON: But -- that would just help me 21 have a better comfort zone, I think. 22 MR. LEVINE: I'm not sure I follow. But if 23 you're asking me to run numbers, I probably won't be 24 able to do it sitting here. 25 MR. HORTON: Okay. 26 MR. LEVINE: I'm pretty good with numbers, but 27 not that good. 28 MR. HORTON: Give me a second then. 15 1 MR. RUNNER: Mr. Chair, real quick on that. 2 MR. HORTON: Mr. Runner. 3 MR. RUNNER: Um, well, it seemed to me in terms 4 of the lack of documentation, the problem is the lack of 5 documentation was on behalf of the previous owner. 6 MS. STEEL: Right. 7 MR. RUNNER: Not on this owner. 8 MS. STEEL: Mm-hmm. 9 MR. RUNNER: No one's questioned this owner's 10 sales tax that he paid. Um, his documentation was fine. 11 It's the -- the question is the previous owner to which 12 had the restaurant. 13 Now, when you say there was a test done, I 14 didn't -- did I miss that? I don't think there was a 15 test done. 16 MS. STEEL: No. 17 MR. LEVINE: No, I think they used the records 18 and calculated based -- I'm sorry, the returns were the 19 records -- 20 MR. HORTON: To calculate. 21 MR. LEVINE: -- they had. And they used those 22 returns to calculate -- 23 MR. HORTON: Average daily sales. 24 MR. LEVINE: Right, average daily sales. 25 MR. RUNNER: But what they did is they 26 disagreed with his returns. 27 MR. LEVINE: They accepted. 28 MR. RUNNER: They didn't do any -- 16 1 MR. LEVINE: -- one quarter. 2 MR. RUNNER: They did not do a test to impeach 3 his returns, did they? 4 MR. LEVINE: No. 5 MR. RUNNER: Okay. They just disagreed with 6 his returns. 7 MR. LEVINE: They thought his returns were 8 inconsistent with each other. 9 MR. RUNNER: Right. But they never did a test 10 to say -- 11 MR. LEVINE: No. 12 MR. RUNNER: You know, nobody did a test 13 to determine -- 14 MR. LEVINE: Well, there were no records -- 15 MR. RUNNER: Right. 16 MR. LEVINE: -- for that. 17 MR. RUNNER: Right. Right. So, I mean, again, 18 my -- my submission would be that indeed the numbers are 19 correct, that the business was going downhill during 20 that period of time, that his numbers were correct. And 21 therefore, that created the value to which this new 22 owner bought the restaurant for. Uh -- 23 MR. HORTON: Well, one -- one of the tests that 24 the Department did -- did -- did do and does do, is that 25 they take a look at the average daily sales. And so 26 they want to make sure that the average daily sales has 27 some consistency and continuity to the other -- to all 28 of the relevant factors in this type of business. 17 1 And so when you look at the average daily sales 2 and you saw a significant drop -- 3 MR. RUNNER: Right. 4 MR. HORTON: -- in the average daily sales, 5 then, you know, the impeachment comes in and you ask 6 yourself, Is that reasonable? 7 Uh, and certainly, uh -- you know, I mean, I'm 8 not, uh, in a position to, uh -- to -- to say what -- or 9 to say what the professional judgment was of the auditor 10 and the Department or to even question that relative to 11 whether or not it was reasonable. 12 But -- so it appears that we're somewhere in 13 the ballpark. And -- and I think what I'm saying is, is 14 that, uh, the Department, the methodology and their 15 strategy that they employed was sound and the 16 reasonableness. I would have to rely on their 17 professional judgment, and -- and the only thing that I 18 could use to dispute their professional judgment or to 19 call into question was subsequent documents, in this 20 case happened to be the, uh -- the escrow which 21 reflected a sales value, uh, that indicated a reduction. 22 MS. STEEL: Mr. Chair. 23 MR. HORTON: Member Steel. 24 MS. STEEL: You know, um, first of all, there 25 are never any test that's been done. 26 And second, that this taxpayer kept this 27 restaurant for 10 months and it was really bad that he 28 paid $20,000 out of $90,000 to the broker to get rid of 18 1 it. 2 So, that's sales. And then I look at the 3 computer. There's about 20 people -- 20 parking spaces 4 there. So, you know, I totally believe that -- we had 5 experiences when my mom bought the sandwich shop. 6 Actually, they tried to give so much freebies and tried 7 to promote and sales went up. And then as soon as we 8 took over, sales just went down to half. 9 So that, I think -- you know, I believe this 10 taxpayer exactly that after 10 months he tried to get 11 rid of this restaurant and he couldn't keep it anymore, 12 means that that sales -- that whatever the seller had, 13 that sales on the record is totally different number 14 than what he was really getting. 15 Why you have to pay, what, uh, 30 percent out 16 of 90 -- it's not 30 percent. My God, I can't even 17 figure it out. Um, $20,000 out of $90,000 paying -- you 18 know, paid to the broker to get rid of this restaurant. 19 So, I think, um, it's -- to me, I think this motion just 20 grant the petition. 21 And this taxpayer is not saying that he's not 22 going to pay for taxes, that what even he didn't owe, 23 that seller owes these taxes. But he said he's going to 24 pay for it. So he calculated his own sales. 25 So I believe that this taxpayer, his 26 calculation is right. 27 MR. HORTON: Okay. Um, further discussion, 28 Members? 19 1 It's been moved to grant the, uh -- 2 MS. MANDEL: Yeah, the -- my notes said that 3 his -- his concession of the 7800, that he -- the 4 Department had accepted the returns through the third 5 quarter of '07. And then the fourth quarter of '07 and 6 all of '08 is where -- 7 MR. RUNNER: Mm-hmm. 8 MR. HORTON: -- the daily sales dropped to 457. 9 And that could have been for any number of reasons that 10 we don't know. 11 Um, but my notes also say that the taxpayer -- 12 or the successor's, um, number he proposes to accept as 13 filed, the fourth quarter of '07, is that -- 14 MR. LEVINE: That's correct. 15 MR. RUNNER: So -- so on our report, is that 16 the disputed 28? 17 MR. LEVINE: He -- he -- his proposal is accept 18 the returns as filed for 2007. 19 MR. RUNNER: Right. 20 MR. LEVINE: And for 2008, to use an error rate 21 of 77.6. So the disputed amount would be all of 2007 22 and the difference in 2008, between his error factor and 23 what the Department assessed. 24 MS. STEEL: And credit card sales 50 percent 25 ratio. 26 MR. LEVINE: That was part of his 27 calculation -- 28 MS. STEEL: Okay. 20 1 MR. LEVINE: -- I believe. 2 MR. RUNNER: So the motion is still relevant in 3 terms of try -- in -- in terms of moving to the 4 Appellant's -- agreeing to the Appellant's disputed 5 amount. Is that a clear motion? 6 MR. LEVINE: My understanding -- correct me if 7 I'm wrong because otherwise this is what we would do if 8 it's granted. 9 MR. RUNNER: Right, right. 10 MR. LEVINE: -- is reduce the liability to the 11 measure of -- reduce the tax liability to $7807.39, 12 which is the amount that Petitioner's concurred in. 13 MR. RUNNER: Okay. That would be -- yeah. 14 MR. LEVINE: And that also reduces it as to the 15 other persons who the Department might go after, too, 16 for the same liability. 17 MR. RUNNER: Right. 18 MR. HORTON: So is that to reduce the 19 measure -- can you put that in measure? 20 MR. LEVINE: It's about 8,000 times eight 21 percent, so -- 22 MS. STEEL: It's about $94,635 that they're 23 asking here. 24 MR. HORTON: So we're reducing it from a 25 taxable measure of 469,000 down to 94,000? 26 MS. STEEL: Down to 94,635. 27 MR. RUNNER: Right. 28 MR. HORTON: Okay. It's moved -- it's been 21 1 moved by Mr. Runner to reduce the -- to reduce the 2 taxable sales from 469,000, uh, to $94,635. And second 3 by -- 4 MS. STEEL: Second. 5 MR. HORTON: -- Member Steel. 6 Objection? 7 MS. MANDEL: Um -- 8 MR. HORTON: I object. 9 MS. MANDEL: Yeah, I think so. 10 MR. HORTON: Uh, Ms. Richmond, please call the 11 roll. 12 MS. RICHMOND: Mr. Horton. 13 MR. HORTON: No. 14 MS. RICHMOND: Ms. Steel. 15 MS. STEEL: Aye. 16 MS. RICHMOND: Mr. Runner. 17 MR. RUNNER: Aye. 18 MS. RICHMOND: Ms. Yee. 19 MS. YEE: Aye. 20 MS. RICHMOND: Ms. Mandel. 21 MS. MANDEL: No. 22 MS. RICHMOND: Motion carries. 23 MR. HORTON: Thank you. 24 ---oOo--- 25 26 27 28 22 1 MR. HORTON: Ms. Richmond. 2 MS. RICHMOND: Our next item is C3, Ike Reuben 3 Chukwudi. 4 MS. STEEL: C2? The appearance -- 5 MR. LEVINE: The waived appearance. 6 MS. STEEL: -- waived. 7 MS. RICHMOND: Oh, I'm sorry. 8 MR. HORTON: Waived appearance. 9 MS. MANDEL: I have a question if you're going 10 to do the waived appearance. 11 MR. HORTON: Uh, let's do the waived appearance 12 then. 13 ---oOo--- 14 C2 HEARTBEAT, INC. 15 NO. 417580 (AC) 16 ---oOo--- 17 MR. HORTON: Ms. Mandel. 18 MS. MANDEL: Um, the -- they handed out 19 materials for the waived appearance one. Uh, it had -- 20 I don't know, Mr. Levine, if you've looked at it. 21 Because it -- it had seemed to me from, as best I could 22 tell before we got this, that it seemed like the reaudit 23 probably addressed the issues the taxpayer had raised. 24 But I -- from looking through this, I'm not -- I wasn't 25 quite clear yet whether they were having problems with 26 the reaudit or they were just trying to address the same 27 things again. 28 Have you looked at it? 23 1 MR. LEVINE: I didn't, but the Department did. 2 And the Department -- I -- I didn't ask about these 3 details. I just asked if it warranted anything, and the 4 Department's advised me, in its view, the submission 5 doesn't justify any change. But I don't know -- I 6 didn't read it myself. 7 MR. HORTON: Ms. Mandel? 8 MS. MANDEL: Um, is Mr. Levine here tomorrow? 9 MR. LEVINE: Yes. 10 MS. MANDEL: Can I read this thing since I just 11 said that I didn't know and Mr. Levine's saying he 12 doesn't know? 13 MR. HORTON: Okay, Members, let's put this over 14 until tomorrow. 15 MR. RUNNER: Okay. 16 ---oOo--- 17 18 19 20 21 22 23 24 25 26 27 28 24 1 MR. HORTON: Ms. Richmond, what's our next 2 item? 3 MS. RICHMOND: Now our next item is C3, Ike 4 Reuben Chukwudi. 5 MR. LEVINE: See, you were right. 6 ---oOo--- 7 C3 IKE REUBEN CHUKWUDI 8 NO. 505067 (EH) 9 ---oOo--- 10 MR. HORTON: Members? 11 MS. YEE: Uh, I'll make a motion to adopt the 12 staff recommendation and, uh, direct Petitioner to the 13 Offer in Compromise Program. 14 MR. HORTON: Member Yee, moves to adopt staff 15 recommendation, uh, requesting that we direct the 16 taxpayer to Offer in Compromise. 17 Is there a second? 18 Second by Member Mandel. 19 Objection? Hearing none, such will be the 20 order. 21 ---oOo--- 22 23 24 25 26 27 28 25 1 MR. HORTON: Ms. Richmond. 2 MS. RICHMOND: Our next item is C4, Rodrigo 3 Moreno, Incorporated. 4 ---oOo--- 5 C4 RODRIGO MORENO, INCORPORATED 6 NO. 432710 (EH) 7 ---oOo--- 8 MS. STEEL: Grant the petition. 9 MR. HORTON: Relative to the penalty? 10 MS. STEEL: Right. 11 MR. RUNNER: Removing -- 12 MS. STEEL: That's the only thing -- 13 MS. YEE: That's the only thing -- 14 MS. STEEL: -- here. 15 MS. YEE: -- they're contesting, right? 16 MR. HORTON: Okay. 17 MS. STEEL: Abate. 18 MR. HORTON: Uh, moved by Member Steel to, 19 uh -- 20 MS. STEEL: Abate. 21 MR. HORTON: -- abate the penalty. Uh, second 22 by Member Runner. 23 Objection? 24 MS. YEE: Objection. 25 MR. HORTON: Objection noted. 26 Ms. Richmond, please call the roll. 27 MS. RICHMOND: Mr. Horton. 28 MR. HORTON: Aye. 26 1 MS. RICHMOND: Ms. Steel. 2 MS. STEEL: Aye. 3 MS. RICHMOND: Mr. Runner. 4 MR. RUNNER: Aye. 5 MS. RICHMOND: Ms. Yee. 6 MS. YEE: No. 7 MS. RICHMOND: Ms. Mandel. 8 MS. MANDEL: No. 9 MS. RICHMOND: Motion carries. 10 ---oOo--- 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 27 1 MR. HORTON: Ms. Richmond. 2 MS. RICHMOND: Our next item is C5, Niknejad, 3 Inc. 4 ---oOo--- 5 C5 NIKNEJAD, INC. 6 NO. 487383 (AS) 7 ---oOo--- 8 MR. HORTON: Members? 9 MS. YEE: Move to adopt the staff 10 recommendation. 11 MR. HORTON: Moved by Member Yee to adopt staff 12 recommendation. Second by Member Mandel. 13 MS. STEEL: Objection. 14 MR. HORTON: Objection noted. 15 Uh, Ms. Richmond, please call the roll. 16 MS. RICHMOND: Mr. Horton. 17 MR. HORTON: Horton, aye. 18 MS. RICHMOND: Ms. Steel. 19 MS. STEEL: No. 20 MR. RUNNER: Did it again. 21 MS. RICHMOND: Mr. Runner. 22 MR. RUNNER: No. 23 MS. RICHMOND: Ms. Yee. 24 MS. YEE: Aye. 25 MS. RICHMOND: Ms. Mandel. 26 MS. MANDEL: Aye. 27 MS. RICHMOND: Motion carries. 28 MR. HORTON: Thank you. 28 1 Ms. Richmond. 2 MS. RICHMOND: That concludes our business for 3 today. 4 MR. HORTON: Thank you, Members. The meeting 5 of the Board of Equalization is recessed until tomorrow. 6 ---oOo--- 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 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 April 24, 2012 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 29 constitute a complete and accurate 14 transcription of the shorthand writing. 15 16 Dated: May 1, 2012 17 18 19 ____________________________ 20 KATHLEEN SKIDGEL, CSR #9039 21 Hearing Reporter 22 23 24 25 26 27 28 30