Gilbert Hyatt Wins Again But…

The California Office of Tax Appeals upheld the California Board of Equalization’s ruling that Gilbert Hyatt mostly doesn’t owe California income tax in 1991 or 1992. Yes, you’re reading that correctly: This is a case that is 27 years in the making.

This is the same case that reached the US Supreme Court for the third time this month. The Supreme Court will decide whether or not states have sovereign immunity in other state’s court systems. (Mr. Hyatt sued the Franchise Tax Board in Nevada over various torts committed by the FTB.)

Unlike Bloomberg Tax which noted that the “[case] appears to be over,” I strongly suspect that the Franchise Tax Board (California’s income tax agency) will appeal the ruling into the court system. The FTB’s normal strategy is to exhaust litigation opponents. Thus, I believe that an appeal into the court system is likely.

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