1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 7 8 REPORTER'S TRANSCRIPT 9 JULY 28, 2015 10 11 12 13 14 ITEM M 15 OTHER CHIEF COUNSEL MATTERS 16 ITEM M1 17 DELEGATION OF AUTHORITY TO DEPUTY DIRECTOR, SALES 18 AND USE TAX DEPARTMENT - RELIEF FROM LIABILITY - 19 TAX, INTEREST, AND PENALTIES 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 18 For Staff: Kimberly Willy Tax Counsel III 19 Legal Department 20 Randy Ferris Chief Counsel 21 Legal Department 22 ---oOo--- 23 24 25 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 JULY 28, 2015 4 ---oOo--- 5 MS. RICHMOND: Our next item are the Chief 6 Counsel matters. We have Item M, Other Chief 7 Counsel Matters; M1 Delegation of Authority to 8 Deputy Director, Sales and Use Tax Department - 9 Relief from Liability, Tax, Interest, and 10 Penalties. 11 MR. HORTON: Members, we would ask that 12 Ms. Willy and Mr. Ferris come forth and present on 13 this matter, at you're convenience. 14 MS. WILLY: Good after Chairman -- good 15 afternoon, Chairman Horton and Members of the Board. 16 I am Kimberly Willy from the Legal Department, along 17 with Chief Counsel Randy Harris -- Ferris, excuse 18 me. 19 We recommend and request that you vote to 20 confirm and amend the delegation of authority to the 21 Deputy Director of the Sales and Use Tax Department 22 to relieve a taxpayer of any tax, including 23 penalties and interest added thereto. 24 This delegation would be pursuant to 25 Revenue and Taxation Code Section 6596 and 26 Regulation 1705 which implements, interprets, and 27 makes specific the provisions of Section 6596. 28 Pursuant to these provisions, relief from 3 1 tax, penalties, and interest may generally be 2 granted when it is shown that there has been 3 reasonable reliance on the Board's prior written 4 advice. 5 A delegation currently exists for this 6 authority and has been in practice at the Board 7 since September 30th, 1992. 8 The document before you is an update to 9 that delegation. The updated language accounts for 10 the amendments that were recently made to Regulation 11 1705. That regulation was amended by the Board in 12 2014 to clarify that the audited person or a person 13 with shared accounting and common ownership with the 14 audited person may be relieved of tax, interest, and 15 penalties pursuant to Section 6596. 16 This delegation will be continuous, was 17 drafted to account for any future amendments that 18 may be made to Regulation 1705. 19 Your adoption of the proposed delegation is 20 recommended so that the Deputy Director of the Sales 21 and Use Tax Department's delegation is consistent 22 with 1705 and to allow for the efficient 23 administration of the Board's duties with respect to 24 relieving a person of tax, interest, and penalties. 25 We therefore recommend that you vote to 26 confirm and amend and adopt the proposed delegation 27 of authority to the Deputy of the Sales and Use Tax 28 Department or his or her functional successor and 4 1 his or her designee. 2 MR. HORTON: Discussion. Member Runner. 3 MR. RUNNER: Move staff recommendation. 4 MR. HORTON: Member Runner moves to confirm 5 and amend as recommended by staff. Excuse me. 6 Second by Member Ma. 7 Without objection, Members, such will be 8 the order. 9 Thank you very much. 10 ---oOo--- 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 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 July 28, 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 5 constitute 14 a complete and accurate transcription of the 15 shorthand writing. 16 17 Dated: July 29, 2015 18 19 20 ____________________________ 21 KATHLEEN SKIDGEL 22 Hearing Reporter 23 24 25 26 27 28 6