1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 8 REPORTER'S TRANSCRIPT 9 JANUARY 21, 2015 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 Sen. George Runner (Ret.) Vice Chair 6 7 Fiona Ma, CPA Member 8 9 Diane L. Harkey Member 10 11 Yvette Stowers Appearing for Betty T. 12 Yee, State Controller (per Government Code 13 Section 7.9) 14 Joann Richmond 15 Chief Board Proceedings 16 Division 17 18 ---oOo--- 19 20 21 22 23 24 25 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 JANUARY 21, 2015 4 ---oOo--- 5 MR. HORTON: Ms. Richmond. 6 MS. RICHMOND: Next are those matters that 7 were taken under submission. 8 Our first item is B1 Matthew Zises. 9 ---oOo--- 10 B1 MATTHEW ZISES 11 NO. 795292 12 ---oOo--- 13 MR. HORTON: B -- B -- B -- B -- 14 MS. HARKEY: B1, Matthew. 15 MR. HORTON: Discussion, Members? 16 MR. RUNNER: Did I -- did I hear -- I was 17 trying to get at it, but I don't think they answered 18 my question directly. I think I asked did the 19 taxpayer pay this, and they said yes. 20 But I believe then you followed up and 21 asked -- 22 MR. HORTON: The CPA firm paid for it. 23 MR. RUNNER: The CPA firm reimbursed them. 24 Is that what I understood that correctly? 25 MS. MA: Yes. 26 MS. STOWERS: That's what I heard. 27 MR. HORTON: They used the term 28 "reconcile." 3 1 MR. RUNNER: Reconciled. 2 MR. HORTON: Yeah. Is that a motion, 3 Mr. Runner? 4 MR. RUNNER: The motion -- I was just 5 clarifying. I'm not sure what the motion would have 6 been if I was making one there. 7 MS. HARKEY: I'd like to abate the -- I'd 8 make a motion to abate the late payment penalty. 9 MR. HORTON: Member Harkey moves to abate 10 the late payment penalty. 11 Is there a second? 12 MR. RUNNER: I'll second. 13 MR. HORTON: Second noted. 14 Objection? 15 MS. STOWERS: Object. 16 MR. HORTON: Objection noted. 17 Ms. Richmond, please call the roll. 18 MS. RICHMOND: Mr. Horton. 19 MR. HORTON: No. 20 MS. RICHMOND: Mr. Runner. 21 MR. RUNNER: Aye. 22 MS. RICHMOND: Ms. Ma. 23 MS. MA: No. 24 MR. HORTON: Ms. Harkey. 25 MS. HARKEY: Aye. 26 MS. RICHMOND: Ms. Stowers. 27 MS. STOWERS: No. 28 MR. HORTON: Subsequent motion, Members? 4 1 MS. STOWERS: Move to sustain the Franchise 2 Tax Board. 3 MR. HORTON: Member Stowers moves to 4 sustain Franchise Tax Board. Second by Member Ma. 5 Without objection, Members, such will be 6 the order. 7 ---oOo--- 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 1 MR. HORTON: Ms. Richmond. 2 MS. RICHMOND: Our next item is C1 Elias 3 Abdallah Haggar. 4 ---oOo--- 5 C1 ELIAS ABDALLAH HAGGAR 6 NO. 597730 (BH) 7 ---oOo--- 8 MR. HORTON: Discussion, Members? 9 Is there a motion? 10 MS. HARKEY: I -- 11 MR. HORTON: Member Harkey. 12 MS. HARKEY: Well, I would move to abate 13 the penalty. 14 MR. RUNNER: The negligence penalty? 15 MS. HARKEY: Negligence penalty. I believe 16 the tax is agreed upon. Probably should go with 17 the -- with staff. 18 So I move to abate the negligence penalty 19 and leave the rest. 20 MR. RUNNER: And staff recommendation? 21 MS. HARKEY: Staff recommendation. 22 MS. STOWERS: That would be the revised 23 recommendation? 24 MS. HARKEY: Right. 25 MR. HORTON: Member Harkey moves to abate 26 the negligence penalty to adopt the balance of staff 27 recommendation. 28 MR. RUNNER: The revised, yeah. 6 1 MR. HORTON: Second by Member -- 2 Revised -- 3 MR. RUNNER: Yeah. 4 MR. HORTON: -- amount. 5 MR. RUNNER: Second. 6 MR. HORTON: Second by Member Runner. 7 Objection, Members. I'm sorry. 8 I mean this is borderline fraud in my mind. 9 But it's difficult for me to get there. 10 They've been in business since 1999; hard 11 to argue that you don't know your business after 12 being in business so long. But one person's 13 opinion. 14 Ms. Richmond, please call the roll. 15 MS. RICHMOND: Mr. Horton. 16 MR. HORTON: No. 17 MS. RICHMOND: Mr. Runner. 18 MR. RUNNER: Aye. 19 MS. RICHMOND: Ms. Ma. 20 MS. MA: Aye. 21 MS. RICHMOND: Ms. Harkey. 22 MS. HARKEY: Aye. 23 MS. RICHMOND: Ms. Stowers. 24 MS. STOWERS: No. 25 MS. RICHMOND: Motion carries. 26 MR. HORTON: Thank you, Members. 27 Ms. Richmond, our next item. 28 MS. RICHMOND: That concludes our business 7 1 for today. 2 MR. HORTON: Thank you, Members. The 3 meeting of the Board of Equalization is hereby 4 adjourned. 5 To all our retirees, thank you so very 6 much -- my apologies -- 194 years of service to the 7 Board of Equalization. 8 To our newly elected Members, I am so 9 excited about these folks. They are just dynamite, 10 awesome individuals and have enormous amount of 11 knowledge that will benefit the Board of 12 Equalization and taxpayers of the State of 13 California. 14 ---oOo--- 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 1 REPORTER'S CERTIFICATE 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, KATHLEEN SKIDGEL, Hearing Reporter for 8 the California State Board of Equalization certify 9 that on January 21, 2015 I recorded verbatim, in 10 shorthand, to the best of my ability, the 11 proceedings in the above-entitled hearing; that I 12 transcribed the shorthand writing into typewriting; 13 and that the preceding pages 1 through 8 constitute 14 a complete and accurate transcription of the 15 shorthand writing. 16 17 Dated: January 26, 2015 18 19 20 ____________________________ 21 KATHLEEN SKIDGEL 22 Hearing Reporter 23 24 25 26 27 28 9