1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 8 REPORTER'S TRANSCRIPT 9 MAY 27, 2015 10 CORPORATE FRANCHISE AND PERSONAL INCOME TAX HEARING 11 APPEAL OF 12 PATRICK MISSUD 13 NO. 845292 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 Sen. George Runner (Ret.) of Equalization: Acting Chairman 3 4 Fiona Ma, CPA Member 5 6 Diane L. Harkey Member 7 8 Yvette Stowers Appearing for Betty Yee, 9 State Controller (per Government Code Section 10 7.9) 11 Joann Richmond 12 Chief, Board Proceedings Division 13 14 For Board of Anthony Epolite Equalization Staff: Tax Counsel IV 15 16 17 For Franchise Tax Brian Werking Board: Tax Counsel 18 Marguerite Mosnier 19 Tax Counsel 20 Craig Scott Tax Counsel 21 22 For Appellant: Patrick Missud 23 Taxpayer 24 25 ---oOo--- 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 MAY 27, 2015 4 ---oOo--- 5 MR. RUNNER: Okay, we're going to call our 6 meeting back to order. 7 And what's next on the agenda? 8 MS. RICHMOND: Our next item on today's 9 agenda is item B, Corporate Franchise and Personal 10 Income Tax Appeals Hearings. 11 Item B1, Patrick Missud, please come 12 forward. 13 Board Proceedings has received contribution 14 disclosure forms for today's hearing from the 15 parties, participants and agents. All forms were 16 properly completed and signed. 17 All parties, participants and agents are on 18 the alpha listing provided to your office. 19 Each person sitting at the table will be 20 asked to introduce themselves and, if necessary, 21 their affiliation with the taxpayer for the record. 22 Ten minutes is allocated for the taxpayer's 23 opening presentation, followed by ten minutes for 24 the Franchise Tax Board's presentation, and five 25 minutes is allotted to the taxpayer for rebuttal. 26 Mr. Runner. 27 MR. RUNNER: Okay, thank you very much. 28 Anything from Appeals? 3 1 MR. EPOLITE: Good morning, Members. There 2 are five issues before the Board in this appeal. 3 First, whether Appellant has demonstrated 4 error in the Franchise Tax Board's proposed 5 assessment of additional tax; whether Appellant is 6 entitled to an abatement of a late filing penalty; 7 whether Appellant is entitled to the abatement of a 8 Notice and Demand penalty; whether the Board may 9 grant Appellant relief from the filing enforcement 10 fee, and whether the Board should impose the 11 frivolous appeal penalty. 12 And I would also like to mention, Members, 13 that the Franchise Tax Board on May 14th revised its 14 assessment of proposed tax by the $12,000 of 1099 15 income, such that the tax assessment amount has been 16 reduced to $7,118, the proposed demand penalty, 17 $1,779.50; the proposed late filing penalty reduced 18 to $1,779.50; the filing enforcement fee remains 19 $78, and the accrued interest, calculated through 20 today, is $638.24. 21 Thank you. 22 MR. RUNNER: Thank you. 23 And the taxpayer will have a chance to 24 present, his time now. And then you'll get another 25 chance after staff -- or after FTB makes their 26 report, and you'll have a chance for rebuttal after 27 that. 28 So, go ahead, sir. 4 1 MR. MISSUD: Good morning, Board Members. 2 My name is Patrick Missud. I am a former attorney. 3 I was disbarred on March 18th for being a federal 4 whistleblower and informant for five years. 5 My job for the feds is to come to hearings 6 like this to set up officials, and, when in court, 7 judges for 18 USC 201, corruption, 1962, 8 racketeering, and a host of other crimes. 9 It's not the first time a sting like this 10 has been held. In Chicago Operation Greylord netted 11 92 corrupt officials and judges who did exactly -- 12 who were set up exactly as I am doing by a guy named 13 Terrence Hake. 14 So, the reason why the BOE, FTB, Franchise 15 Tax Board, is trying to steal an additional $12,000 16 from me is because I used those as my litigation 17 funds to set up corrupt officials and judges. 18 If you recall, the FT -- the Franchise Tax 19 Board stole $5,000 of my litigation funds last year 20 in May to slow me down. That didn't really help. 21 My parents are pretty well off. And my wife makes 22 $200,000 a year as an in-house patent attorney in 23 Silicon Valley. 24 So, that being said, I picked up one of 25 your publications. And it says here I've got the 26 right to be treated fairly, have the law 27 administered uniformly, and be advised of procedures 28 and methods, and be free of investigations unrelated 5 1 to the administration of the tax program. 2 Be it known that this is definitely being 3 monitored, not only by your public cameras, but the 4 federal authorities, Criminal Division and Public 5 Integrity Unit in Washington, D.C. They've been 6 apprised of all this for about five years. 7 Now, the Board of Equalization's lied a 8 bunch of times. It's just kind of strange. They 9 sent me a letter and they filed my preliminary reply 10 to their bogus, trumped-up charges as my final 11 reply. 12 When I reminded them that it was actually 13 just a preliminary reply, they then filed my final 14 reply that was complete with a lot of details that 15 everybody wants to ignore. 16 Then the Board lied that I had not returned 17 a form, which they had never furnished or notified 18 me of, so that they could take me off of today's 19 calendar. 20 After I protested and I copied about 200 21 media sources in the Criminal Division, I was put 22 back on today's calendar -- very strange. 23 The BOE also -- that $12,000 that counsel 24 just said had been revised, that was already 25 collected on when the BOE stole my money in -- on 26 May 23rd of last year. 27 And not only that, I got another notice 28 that they want another set of taxes for 2013, for 6 1 which they're also claiming that same $12,000. 2 So, the BOE is triple charging, much like 3 attorneys do, because apparently they're corrupt as 4 well. 5 But in any case, let's move ahead. I 6 noticed that the BOE did a lot of research. They 7 even downloaded a copy of my disbarment from the 8 web. 9 While they were on the web, they could have 10 also noticed, simply by Googling my name, that I 11 have about a dozen websites that are active that are 12 displaying all of the various state corruption from 13 coast to coast -- I'm sorry, from north to south. 14 Here we go. It's, "After a decade of 15 frivolous litigation, IP lawyer finally ousted." 16 That's talking about me. 17 "California disbars a guy named Patrick 18 Missud." That's me. 19 State Bar of California, third search 20 result, disbarred. 21 Look at this, fifth on the list, Crime 22 Voice, I was arrested. I was arrested on 23 January 9th, after I caught Judge Elfving in 15 24 lies. That's in the official court transcript that 25 you're going to be getting a copy of. 26 By the way, that is CCP 450, 27 self-authenticating evidence that can be used for 28 any purpose, including impeaching declarants 7 1 therein. It can also be used at administrative 2 hearings like this one. 3 You guys can actually acknowledge that 4 Judge Elfving was caught in 15 lies and five minutes 5 later had me falsely imprisoned, starting with an 6 illegal arrest just five feet outside of his 7 courtroom doors. 8 By the way, I'm going to be leaving a set 9 of files for the record, six files, jam-packed full 10 of facts. None of this is conjured up -- much like 11 the BOE's trumped-up charges. 12 Let's move on to Federal Arbitration Act, 13 Racketeering. Judges love to rig federally-mandated 14 arbitrations, which are boilerplate in practically 15 every single contract throughout California. 16 Consumers have waived their rights to a jury trial 17 to go into super secretive arbitration, where, 18 wouldn't you know it, the majority the neutrals 19 happen to be retired court judges. 20 Dennis Herrera, in San Francisco, filed the 21 suit against the National Arbitration Forum proving 22 that 96 percent of those arbitrations had been 23 rigged. The National Arbitration Forum hired -- 75 24 out of every 100 neutrals was a retired judge. 25 Simple math. 72 out of 100 arbitrations was rigged 26 by a retired judge. 27 The judges are absolutely judicially immune 28 on the bench and the same thing at arbitration. If 8 1 they make mistakes of law or overlook facts, it's 2 done under their purview as judicially immune 3 entities. 4 How convenient is it then for them to 5 always favor the money, the deep pockets and the 6 corporations, by making mistakes of law? 7 In one such arbitration in which I set up 8 about two dozen judges, an arbitrator overlooked 63 9 facts, lied 63 times for the official transcripts. 10 Judge Willard confirmed the arbitration and it was 11 reaffirmed by George Georgy. And then in the 12 Appellate Courts, Division 2 ate it up. 13 California Supreme Court Chief Justice 14 Cantil-Sakauye, she did not want to review the case. 15 So, I had to petition it all the way up to the U. S. 16 Supreme Court, who said that -- John Roberts said 17 that arbitrations are absolutely fair and a 18 corporation would never risk being exposed by lying 19 during arbitration. 20 That's exactly what happened here. Guess 21 what -- John Roberts refused to also look at the 22 case. That's just the first arbitration. It's a 23 million dollar fraud by a band of corrupt judges in 24 San Francisco Superior Court. 25 A second one that is ongoing today, 26 CPF-10-510-860 -- I'm sorry, 760, Cunningham, In Re 27 Cunningham, his condo was stolen by a retired judge. 28 That case was forced into arbitration despite a 9 1 defunct agreement that said you could not arbitrate 2 it at JAMS. However, Judge Willard appointed her 3 favorite retired Judge McDonald to rig the award 4 under the defunct agreement to steal Arch's million 5 dollar condo. As of today -- it might be going 6 through right now. 7 This thing was again appealed to the -- to 8 First District Court of Appeal, Division 2, up to 9 Cantil-Sakauye and they featured it in Supreme Court 10 writ 12-7817. 11 Wouldn't you know it, John Roberts didn't 12 want to admit that California's judiciary is ultra 13 corrupt. 14 Moving on -- I'll leave this file for you 15 to review. 16 Like I was saying, California's Bar rigged 17 my disbarment, which came to fruition on March 18th. 18 On January 27th, 2011 I testified before 19 the entire Bar Court Panel. It was something called 20 Governance in the Public Interest Task Force. A 21 bunch of people like you were up there, feigning 22 that you were all about public protection, when, in 23 fact, the Bar protects nothing but it's own Bar 24 members. 25 Whatever schemes they can conjure up to 26 target -- financially target consumers, they'll do 27 it. 28 Then Presiding Bar Court Judge Remke was in 10 1 attendance, as were then Bar Court President Hebert 2 and future Bar Court President Streeter. I regaled 3 them about five frauds -- five members -- five Bar 4 members were targeting five members of the 5 community. And yet the Bar did nothing to 6 investigate any of them. 7 Why is that? The Bar is a very 8 self-interested organization that works for its own 9 self interest of members. 10 I even petitioned one of those cases all of 11 the way up to the U. S. Supreme Court, writ 12-9413, 12 denied review. And this was after Cantil-Sakauye, 13 our Chief Justice, decided to ignore the facts. 14 On January 22nd, 2013, I set a Bar Court 15 Judge Armendariz. We had a pre-trial hearing, where 16 at I brought one of my defrauded victims to testify 17 about his being defrauded by a Bar member, that Bar 18 member being Hudak. At the end of the hearing, it's 19 in the transcript, I told Bar Court Armendariz she 20 had jurisdiction under Bar Court Rule 5.109 to 21 investigate this guy named Hudak. 22 Did she do it? No, what she did do is 23 continue on with the rigging my Bar Court trial 24 because I'm a danger to Bar Court. I'm a danger to 25 self-interested Bar members. 26 Incidentally, I have a master's in 27 engineering. I could give a shit about being a 28 lawyer. 11 1 MS. RICHMOND: Time's expired. 2 MR. RUNNER: Mr. Missud, I'm going to ask 3 you if you could wrap up in an couple of seconds 4 there, maybe 30 seconds? 5 MR. MISSUD: Yeah. 6 MR. RUNNER: And then you'll have a chance 7 to come back and respond after FTB reports 8 MR. MISSUD: Absolutely. I'm going to be 9 going through another four sets of files. 10 I'll do it it a little more quickly. And 11 then there's a lot more -- 12 MR. RUNNER: You have thirty seconds to 13 finish up right now. 14 MR. MISSUD: -- judges. 15 MR. RUNNER: And then you can respond 16 after. 17 MR. MISSUD: I yield my time. I'll let the 18 BOE take care of business. 19 MR. RUNNER: Are you -- you completed your 20 testimony? 21 MR. MISSUD: I am. 22 MR. RUNNER: Okay. FTB. 23 MR. WERKING: Good morning, Members of the 24 Board. My name is Brian Werking and beside me is 25 Marguerite Mosnier and Craig Scott. We represent 26 Respondent, Franchise Tax Board. 27 Appellant has not filed his 2012 tax 28 return. In the absence of a return providing the 12 1 relevant information necessary to accurately 2 determine the tax liability, Respondent may estimate 3 a taxpayer's net income from any available 4 information and assess the amount of tax, penalties, 5 and interest due. 6 Because Respondent received information 7 that indicated Appellant had earned income in excess 8 of the minimum filing requirement, Respondent 9 followed its ordinary procedures and issued a demand 10 and allowed an extension. 11 When Appellant did not respond to 12 Respondent's demand, Respondent had no other 13 alternative but to estimate Appellant's income and 14 move forward with the assessment. 15 Respondent is forced to use all relevant 16 information in order to protect the interests of the 17 State of California. 18 Despite numerous requests from Respondent 19 for information, Appellant has not provided evidence 20 that Appellant does now owe the assessment. Nor has 21 the Appellant established reasonable cause to abate 22 the demand or delinquent filing penalties or 23 established that the filing enforcement fee was 24 incorrectly assessed. 25 Respondent would like to reiterate that if 26 the Appellant can provide information that would 27 support his position that Respondent's assessment is 28 incorrect, we are more than willing to examine that 13 1 information. 2 We welcome the opportunity to review 3 Appellant's return or any other documentation 4 Appellant has to reach a different conclusion. 5 Without any additional information, under 6 the law the assessment must be sustained. 7 I will be happy to answer any of the Board 8 Members' questions. 9 Thank you. 10 MR. RUNNER: Mr. Missud. 11 MR. MISSUD: Yes, all right. 12 MR. RUNNER: And you have -- how much time 13 on the rebuttal? 14 MS. RICHMOND: Five minutes. 15 MR. RUNNER: Five minutes on rebuttal. 16 MR. MISSUD: The BOE is estimating my 17 whopping $106,000 yearly salary based on my having 18 been a Bar-licensed attorney, who, since 2011 -- the 19 year before they assessed their $106,000 salary -- I 20 was being targeted by the Bar and not being allowed 21 to use that license in any gainful employ. 22 So, they're saying that I made $106,000 as 23 a Bar-licensed attorney as the Bar was actively 24 trying to take away my license for blowing the 25 whistle on Bar Court racketeering -- oh, I'm sorry, 26 Bar racketeering. 27 Now the BOE official just said that the 28 BOE's protecting the interests of California and its 14 1 taxpayers. That's a bit of a lie. 2 I am acting as a CCP 1021.5 a private 3 Attorney General who's asserting the rights of 38 4 million Californians who are being financially 5 targeted when in court, at arbitration, and by 6 regulatory agencies, like, for instance, San 7 Francisco's SFMTA, which targets mostly minorities 8 for predatory towing and citations -- just like they 9 did in Ferguson, Missouri. Go figure. It's a cash 10 cow to steal people's cars. I'll get to that later. 11 That's one of my folders. 12 Now the BOE agent just said that I could 13 submit information proving that I didn't make 14 $106,000. They can take a look at my retirement 15 account, which has dwindled from $100,000 down to 16 $40,000 this year. Why am I withdrawing all of 17 those funds from my -- my retirement account? Why 18 did 60 grand disappear? 19 That's how I bankrolled this litigation. 20 I'm also a key tam relator (sic), who, after these 21 officials and judges go to prison forever, I get a 22 cut of the monies that are clawed back in forms of 23 their salaries prospec -- and prospective 24 retirements. 25 Moving on, Hobbs Act corruption of 26 officials and judges -- great. You can always win a 27 case if you buy the judge. 28 Federal District Judge Chen on March 9th 15 1 understood, because I set him up at that hearing, 2 that there was general jurisdiction over the 3 $16 billion D. R. Horton Corporation, which sells 30 4 percent of its homes here in California. He knew 5 that because D. R. Horton purposely availed itself 6 of California's law in the Benitez Wilson case down 7 in San Diego. That meant they could be hailed into 8 court. 9 What happened? Judge Chen ignored that 10 fact. He dismissed a predatory lender from suit. 11 And that -- that clear violation of law was 12 appealed, rubber stamped and it went all of the way 13 up to the Supreme Court. 14 And John Roberts couldn't admit that his 15 Ninth District and Circuit courts sold out to a $16 16 billion corporation, which happened to have filed 17 against it twenty federal lawsuits, 44 F. T. C. 18 complaints, and there were 200 audit reports 19 combined -- all combined events that 100 victims 20 were targeted for financial predation and bait and 21 switch predatory loans. 22 The reason why Chen dismissed D. R. Horton 23 from suit was to prevent exposure of my 400 strong 24 victim list, half of whom came from California. 25 Judge Chen couldn't allow it to be known that Donald 26 Horton of the D. R. Horton Corporation routinely 27 buys judges to ignore major financial crimes because 28 if they were exposed, his company would go bankrupt. 16 1 He'd go to prison forever. 2 It's easy to buy a judge for, who knows, a 3 million dollars to save $16 billion. That one case 4 alone, I litigated it in Las Vegas, in California 5 Superior Court, and in the District Court -- three 6 jurisdictions purposely to set up the judges in each 7 of the jurisdictions. I went all the way up through 8 the appellate processes to the highest courts and 9 each of those was then appealed to John Roberts, 10 five U. S. Supreme Court cases. 11 He denied reviewing any of them because he 12 couldn't admit that the FTC, HUD, FBI -- and I found 13 400 consumers on my own by posting all the 14 information on the internet and sponsoring the 15 website so that they'd be the first return search 16 term. 17 I'm going to leave you the official FTC and 18 HUD records proving that the D. R. Horton 19 Corporation should have been sued here in California 20 to protect 38 million Californians, but a couple of 21 judges were bought off to prevent that from 22 happening. 23 MS. RICHMOND: Time's expired. 24 MR. RUNNER: Okay, thank you. 25 I am going to -- Members, do you have 26 anything? Follow-up questions? 27 Member Ma. 28 MS. MA: I do have a question. 17 1 Franchise Tax Board, how did you get the 2 $106,000? Was it just based on the prior year 3 salary or is it based on other W-2, 1099 actual 4 information that you received for 2012? 5 MR. WERKING: It's actually an estimation 6 of Appellant's income as holding a license to 7 practice law. It's an estimation of other 8 attorneys' information for the tax year. 9 MS. MA: Okay. So, the taxpayer said he 10 did not have a license. And he was drawing money 11 from his retirement. 12 And I think he filled out a form to that 13 effect that was submitted. 14 MR. WERKING: Respondent's Exhibit D, in 15 its opening brief is a -- is a printout of the 16 California Bar -- State Bar website in which it 17 indicated that Appellant was not eligible to 18 practice law beginning July 4th, 2013, not for 2012. 19 So, he held an active Bar license in 2012. 20 MS. MA: But you didn't see a W2 or a 1099 21 for that year? 22 MR. WERKING: We did receive a 1099 for 23 $12,000, which in our memorandum we reduced the 24 assessment by that amount because we found that to 25 be duplicative of income as Appellant practicing 26 law. 27 MS. MA: What was the 1099 for? 28 MR. WERKING: It was a miscellaneous 18 1 1099 -- a 1099 miscellaneous payment. 2 MS. MA: From? 3 MR. WERKING: From an insurance company, 4 from an auto insurance company. 5 MS. MA: Auto insurance. 6 So, Mr. Missud, do you recall getting a 7 1099 from an insurance company? 8 MR. MISSUD: Yeah, that's one of the few 9 cases that I actually litigated that year for a 10 personal friend of mine. 11 Of the $12,000, I might have gotten $2,000 12 and a lunch. The -- I forget what the insurance 13 company was -- mega insurance company was screwing 14 him around. I took it over. I got them to stop 15 screwing around. And I got the check. And I pretty 16 much gave him the full amount. Maybe I kept 2,000. 17 Now on another thing BOE Member here said I 18 had a Bar -- I was an active Bar member in July 19 2013. 20 They targeted me for my license on 21 April 2nd, 2012, when federal Judge Chen turned me 22 over to the Bar for a contrived investigation 23 because I had caught him ten days earlier selling 24 his decision to $16 billion D. R. Horton. He's the 25 one that initiated the Bar's trumped-up 26 investigation to disbar me bar because my job is to 27 expose judicial corruption. 28 So, does this BOE Board agent -- agent 19 1 actually expect you guys to believe that the Bar was 2 not interfering with my gainful employ from that 3 point on? 4 I mean, I testified before the Bar and its 5 panel on January 27th, 2011 to blow the whistle on 6 them. Since then, at least, they were retaliating 7 against me, making things really hard. 8 MR. RUNNER: Member Ma, has your answer -- 9 has your question been answered? 10 MS. MA: Yes. 11 MR. RUNNER: Okay. And just for 12 clarification to the taxpayer, the folks on the 13 other side of the table are from the State Franchise 14 Tax Board. 15 MR. MISSUD: Fine. 16 MR. RUNNER: Okay. Other questions from 17 Members? 18 MS. HARKEY: Not at this time. 19 MR. RUNNER: Just a quick follow-up, 20 Mr. Missud, on a question I have. 21 So, did -- did you file a return for 2002? 22 MR. MISSUD: Actually, we did. My wife and 23 I, we file jointly. And she kept on filing 24 extensions. And she made an estimated -- estimated 25 taxes for sure. 26 And she's been pressuring me -- pestering 27 me, rightfully so -- to add up all my receipts 28 because she loves my business losses, my enormous 20 1 business losses. 2 MR. RUNNER: Okay. Let me -- let me just 3 see, 'cause I think that's -- hear what the FTB says 4 in regards to filing. 5 MR. WERKING: The tax return on appeal was 6 2012 and we have not received a tax return from 7 Appellant for 2012. 8 MR. RUNNER: Was there an extension 9 requested for that year? 10 MR. WERKING: There was an extension 11 requested. 12 MR. RUNNER: And then past the extension 13 date and nothing else filed? 14 MR. WERKING: Correct. 15 MR. RUNNER: Okay, thank you. 16 MR. MISSUD: Yes. 17 MR. RUNNER: Thank you. 18 MS. HARKEY: Move to take the matter under 19 submission. 20 MR. RUNNER: Okay. Motion was made to take 21 the matter under submission. 22 MS. STOWERS: Second. 23 MR. RUNNER: Any objections? 24 Second. Any objections? 25 Okay, thank you, Mr. Missud. We will take 26 this up when we take up our votes at the end of our 27 meeting. 28 Thank you. 21 1 MR. MISSUD: Thank you. 2 And I'm going to leave you the six files 3 right here on the desk. 4 MR. RUNNER: Okay. The clerk will take 5 possession of those. 6 Okay. 7 ---o0o--- 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 22 1 . 2 REPORTER'S CERTIFICATE 3 4 State of California ) 5 ) ss 6 County of Sacramento ) 7 8 I, JULI PRICE JACKSON, Hearing Reporter for 9 the California State Board of Equalization certify 10 that on MAY 27, 2015 I recorded verbatim, in 11 shorthand, to the best of my ability, the 12 proceedings in the above-entitled hearing; that I 13 transcribed the shorthand writing into typewriting; 14 and that the preceding pages 1 through 22 constitute 15 a complete and accurate transcription of the 16 shorthand writing. 17 18 Dated: AUGUST 17, 2015 19 20 21 ____________________________ 22 JULI PRICE JACKSON 23 Hearing Reporter 24 25 26 27 28 23