Posts Tagged ‘BOE’

For Sale With Mold

Tuesday, January 12th, 2010

Mold inside a building can be a major health issue. Unfortunately, California’s Board of Equalization is housed in such a building. The 24-story building is in a prime, downtown Sacramento location. But leaks and mold abound, and the $15 million that would have fixed up the building has grown into $68 million today. Assemblyman Dave Jones (D-Sacramento) and Senator George Runner (R-Lancaster) are carrying a bill to move the BOE and for the BOE to sell or lease the building.

Of course, would you want to buy a 24-story building filled with mold?

Another List To Avoid

Sunday, November 29th, 2009

Every six months theBoard of Equalization, California’s sales and excise tax agency, publishes its list of the top 250 debtors to the BOE. The list was updated this past week with 28 new entrants.

Unlike the list of the top 250 income tax debtors, this list mainly consists of businesses; indeed, I was struck by how many automobile dealerships and related businesses are on the list. The largest new lien is against Mastermind Group, Inc. dba Bay Auto Brokers, Inc. in Richmond (in the San Francisco Bay Area). That business has a $1,241,847 lien. The largest lien is for $7,976,634 to De Won Motors Group, Inc. in Los Angeles.

The listings have caused some entities to pay their tax. All told, 23 taxpayers owing a total of $25 million have made some payments on their debt with $3.4 million collected to date. Unfortunately, that’s a drop in the bucket; the total owed on the list is a staggering $288 million.

A Horror Story (Averted) From Bill Leonard

Tuesday, May 8th, 2007

Once a week I receive the Leonard Letter. Bill Leonard, a member of California’s Board of Equalization, each week states his views on what’s going on in the tax world in California. It’s essential reading for anyone in California concerned about their taxes. You can subscribe here.

On April 25th Bill Leonard reported on a case that almost was argued in front of the Board. In California, a taxpayer appealing a decision of the Franchise Tax Board first must move through that agency. If he can’t get a satisfactory result through that appeals process, he then can appeal to the Board of Equalization. After that, a taxpayer can then take their case to the courts.

You can find the case in question from Bill Leonard’s blog entry of April 25th. A taxpayer hadn’t filed his return in some time, and the FTB estimated his income and then added his W-2 to it. But the W-2 was all of his income, so they double-counted his income. He went through the FTB and got nowhere, so he appealed to the BOE. Amazingly enough, on the morning of the appeal the FTB “…changed their story and returned the gentleman his money.”

There are many good people at the FTB, but this case spotlights some of the bureaucratic shortcomings that I have seen. Bill Leonard (rightly) noted, “Had this situation not been presented in public before the Board I am doubtful this taxpayer would have received justice.” Unfortunately, that’s the problem.

Yes, the taxpayer didn’t file returns, and that was a cause of the problem. But it shouldn’t take an appeal to the BOE for the FTB to realize there’s a problem with double counting of income.

There’s a moral here—actually two morals. First, if you’re a Californian, file your tax returns. Second, the Franchise Tax Board can become adversarial instead of working to resolve problems.

A List You Don’t Want to Be On

Monday, April 23rd, 2007

There are many ways to catch tax scofflaws. California is trying something new—publicizing the worst offenders. Will shame cause payments?

The Board of Equalization collects sales and use tax in California. Under a law passed last year, both the BOE & the Franchise Tax Board must post lists of the worst offenders. The BOE has come out with their list of 227 who owe $219 million to California. A company can get off the list by paying the amount in full or by agreeing to a payment plan. Debts being appealed or in bankruptcy will not be listed.

The list will eventually grow to 250 names. For now, you need to owe $201,000 to make the list. Topping the list is Southland Federal Enterprises at $17,152,957.96 (we wouldn’t want to forget those 96 cents); their debt dates back to 2000. Next on the list are Khaled Mohammed Tabbah of Walnut and Ammar Assad Tabbaa of Orange; each owes $16,887,211.88. In fourth place is the former owner of the Los Angeles Kings, Bruce McNall (also a former resident of ClubFed); he owes a measly $7,138,011.08 dating back from 1994.

Later this year the FTB will issue its list. As noted in the press release announcing the list, the BOE has received one payment of $300,000 and two payment plans totaling $1.5 million. So it appears that shame works.

Bah, Humbug

Sunday, January 7th, 2007

You own a Christmas tree lot, and it’s December 26th. What do you do with your leftover trees?

Well, it’s time to throw them away…but not for one lot owner near Fresno. No, they’re not hazardous waste. Rather, the Board of Equalization wants to make sure that the lucky owner has paid all of his taxes.

What taxes? Well, the owner bought the trees for resale, and didn’t pay any sales tax on the trees. His customers paid sales tax when they bought the trees. However, the leftover trees (which are being destroyed) have never been taxed. Before they’re destroyed, the lot owner must pay sales tax on the soon to be composted trees.

As this brief story notes, the Board of Equalization wants to make sure that sales tax is paid on every single tree.

Why the Franchise Tax Board Is “Fun” to Deal With

Monday, January 9th, 2006

Let’s assume you disagree with a decision that the Franchise Tax Board (FTB) makes on your tax return. You go through the FTB appeals process, and get nowhere. California then allows appeals to the Board of Equalization (BOE). Today, let’s look at a recent decision by the BOE in Appeal of Costco Wholesale.

Costco took advantage of California’s Manufacturers’ Investment Credit (MIC) for its in-store bakery and meat departments. Previously, the BOE had rules in Appeal of Save Mart Supermarkets & Subsidiary that supermarkets were eligible for this credit. Costco asked for a refund of taxes paid between 1996 and 2001 because of the MIC. The FTB didn’t like this decision, and elected not to follow it. Costco appealed the FTBs disallowance of the MIC to the BOE. The BOE faced three issues: Whether Costco qualifies for the deduction, whether bakery and meat departments qualify, and whether the BOE has authority to invalidate an FTB regulation.

The easy part of the decision was that Costco is a qualified taxpayer. The BOE followed the Save Mart case and found that Costco’s bakery and meat departments are just as qualified as Save Mart’s to get the MIC. And finally, the BOE believes that the California Legislature has given the BOE the power to invalidate FTB regulations when the BOE determines such regulations are contrary to statutes.

No word yet on whether the FTB will continue to fight such cases.

Coverage: California Enrolled Agent Magazine, January/February 2006 issue (not on the web), CMTA Capitol archive, 10/27/05.

BOE Flood Relief

Friday, January 6th, 2006

For taxpayers in Northern California impacted by the recent storms, the Board of Equalization has extended deadlines for filing California sales tax and fees collected by the BOE by one month. Returns (and payments) originally due on January 31st are now due on February 28th for businesses in these counties:

Butte, Del Norte, El Dorado, Humboldt, Lake, Lassen, Marin, Mendocino, Napa, Nevada, Placer, Plumas, Sacramento, San Joaquin, San Mateo, Sierra, Siskiyou, Solano, Sonoma, Sutter, Trinity, Yolo and Yuba.

Impacted businesses must complete BOE Form 468 (Request for Extension) and BOE Form 27 (Penalty and Interest Relief for Disaster Victims). The BOE has indicated that they may allow late filers who do not complete the forms relief if they include a statement signed under penalty of perjury that they were impacted by the storms.

News Story: San Mateo County Times

BOE Notice