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 JUNE 23, 2015 10 11 12 13 14 ITEM H 15 TAX PROGRAM NONAPPEARANCE MATTERS - ADJUDICATORY 16 ITEM H1 17 LEGAL APPEALS MATTERS 18 1. ANDREW STEVEN ROGANSON, 538417, 737457 (AC) 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 Chairman 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 For Staff: Jeff Angeja Tax Counsel IV 18 Legal Department 19 20 For the Appellant: Andrew Steven Roganson Taxpayer 21 22 ---oOo--- 23 24 25 26 27 28 2 1 5901 GREEN VALLEY CIRCLE 2 CULVER CITY, CALIFORNIA 3 JUNE 23, 2015 4 ---oOo--- 5 MS. RICHMOND: Our next matter is Item H, 6 Tax Program Nonappearance Matters - Adjudicatory. 7 Item H1, Legal Appeals Matters. 8 We have a speaker for this item. 9 MR. HORTON: Thank you. 10 As Mr. Angeja settles in, I would ask that 11 Mr. Andrew Roganson come forward, please. 12 Mr. Roganson, Members, is the owner of 13 Design Lighting and Installation. He'll be granted 14 three minutes to speak and then return to the 15 audience. 16 Mr. Angeja, would you please introduce 17 the -- 18 MR. ANGEJA: It's H1.1, petition for 19 rehearing for the Board's consideration. 20 MR. HORTON: Okay. 21 Mr. Roganson. 22 MR. ROGANSON: Good morning, Board 23 Members -- 24 MR. HORTON: Good morning. 25 MR. ROGANSON: -- and staff. Welcome, to 26 the new faces. Hope you enjoy your stay here. 27 The Department has failed to provide a fair 28 and understandable audit and an acceptable solution 3 1 to my inaccurate invoicing as required by law, as 2 described in the Revenue and Tax Code 7081. And 3 I'll quote: Understandable tax laws, clarity of tax 4 laws, determine correct liability, and allow the 5 taxpayer every opportunity to present relevant 6 information. 7 This is the third time I've been before -- 8 in front of the Board. I had an appeals hearing and 9 petitioned for rehearing, and this is my second 10 petition for rehearing. 11 Each of the three audits came up with 12 different accountings based on different auditor's 13 interpretations. And, clearly, the Department and 14 Board Members have testified as to the confusion in 15 applying my billing to the tax codes and relevant 16 liabilities. 17 And if you look in my petition, you'll see 18 that I have exhibits from the audit that show 19 misinterpretations of what my billing is for. Some 20 of the items they called transform -- that I call 21 transformers included tax -- I mean, labor and 22 materials. And they looked at it as a fixture, 23 completely taxable at the rate that I billed my 24 client for. 25 So there was no communication between the 26 auditor and me to determine what that really 27 represented. And that's a fault in the process 28 where state law is not being followed as far as 4 1 making sure that the proper taxes are being 2 collected and not more than what is owed. 3 At the last hearing, Mr. Horton testified 4 that during my hearing some of the testimony by the 5 Department itself was misleading. To me -- and 6 that's in one of my exhibits. To me, that 7 invalidates my ability to present reasonable 8 information that -- that -- that presents my case 9 without the Board being biased by misdirection. And 10 I think that invalidates the hearing process. And 11 the due process that's provided should be unbiased. 12 And misleading testimony should disqualify whoever's 13 doing the testimony and that testimony. 14 I believe that Mr. Runner was in agreement 15 with me regarding redoing my invoices to reflect my 16 lump sum contracts. Because I didn't have the 17 contracts in writing, they were verbal, the only 18 evidence the auditors had was my invoicing. And if 19 I did that improperly, there should have been some 20 kind of liaison to show me how to properly invoice 21 for the work I was doing because I paid the taxes at 22 the time I purchased the materials. And I didn't 23 realize that I was incurring tax liability by 24 listing the price that I sold the materials at. 25 Okay. 26 I am a consumer by contract law if I put it 27 in the right category. I'm a reseller if I don't. 28 And I know the -- the Department would like me to be 5 1 the reseller of everything that I install, but I'm 2 not. And I don't want to do my business that way. 3 And I think the law protects me in choosing how I do 4 my business. And if I get it wrong, the Department 5 is mandated by the State to help me get it 6 correct. 7 So, in closing, I'd like to say that I'd 8 like a level playing field. A new hearing would be 9 the only fair next step unless the Board recognizes 10 the Department's trespass on my due process, its 11 interference with the Board's hearing of my 12 testimony, and the Department's lack of 13 understanding -- of an understandable guidelines to 14 accurately account for my gross sales and determine 15 that I do not owe sales tax above what has been paid 16 at the time I purchased all of my materials. A 17 dismissal of my case would also be acceptable. 18 Thank you. 19 MR. HORTON: Thank you very much. 20 MR. ROGANSON: Thank you. 21 MR. HORTON: Discussion, Members? 22 Hearing none, is there a motion? 23 Okay. We'll return to discussion, Members. 24 MS. HARKEY: I'm sorry. 25 MR. HORTON: Member Harkey. 26 MS. HARKEY: Yes. Did we get additional 27 data, or I have an indication that we received -- 28 MR. HORTON: The question is to Mr. 6 1 Angeja. 2 MS. HARKEY: We received additional data 3 that, as I'm reading the information, said that, in 4 essence, the taxpayer might not be favored by the 5 additional data. Can you explain that to me? 6 MR. ANGEJA: That would be the additional 7 evidence he provided after the Board's last vote in 8 this matter. The vote was in October. He provided 9 additional evidence which resulted in a second 10 re-audit. Then the second re-audit revealed that 11 the measure of tax would actually go up, both 12 because of fixtures that were missed in the first 13 audit and also they were -- 2008 was based on an 14 estimate of gross sales, and he provided additional 15 invoices which were still not complete. But those 16 invoices alone showed a higher measure than what the 17 initial audit determined. 18 And so the Department has declined to 19 assert an increase. But if a deeper look were 20 taken, the measure would actually increase and would 21 be worse for the taxpayer. 22 MS. HARKEY: Thank you. 23 MR. HORTON: Is there a motion, Members? 24 MS. STOWERS: Adopt staff recommendation. 25 MR. HORTON: Ms. Stowers moves to adopt 26 staff recommendation. 27 Second by Member Runner. 28 Without objection, Members, such will be 7 1 the order. 2 ---oOo--- 3 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 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 June 23, 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: July 10, 2015 18 19 20 ____________________________ 21 KATHLEEN SKIDGEL 22 Hearing Reporter 23 24 25 26 27 28 9