1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION
2 5901 GREEN VALLEY CIRCLE
3 CULVER CITY, CALIFORNIA
8 REPORTER'S TRANSCRIPT
9 SEPTEMBER 22, 2009
11 CORPORATE FRANCHISE AND PERSONAL INCOME TAX HEARING
12 APPEAL OF
13 ANDRA R. SACHS
14 NO. 446027
15 AGAINST PROPOSED ASSESSMENT OF
16 ADDITIONAL TAX
25 Reported by: Juli Price Jackson
26 CSR No. 5214
1 P R E S E N T
2 For the Board Betty T. Yee
of Equalization: Chair
5 Bill Leonard
8 Marcy Jo Mandel
Appearing for John
9 Chiang, State Controller
(per Government Code
10 Section 7.9)
11 Diane G. Olson
12 Proceedings Division
For Board of Amy Kelly
14 Equalization Staff: Staff Counsel
For Franchise Tax Christopher Haskins
18 Tax Counsel: Tax Counsel
19 Ronald Hofsdal
For Appellant: Walter Weiss
22 Andra R. Sachs
Bradford Sachs, Witness
Lesley Summers, Witness
1 5901 GREEN VALLEY CIRCLE
2 CULVER CITY, CALIFORNIA
3 SEPTEMBER 22, 2009
5 MS. YEE: Next case?
6 MS. OLSON: Our next item is B4, Andra R.
8 Please come forward.
9 MS. YEE: Ms. Kelly?
10 MS. KELLY: The issue in this appeal is whether
11 Appellant was a California resident at the time she
12 received the proceeds from her sale of $9 million worth
13 of Flashcom stock on the apparent February 11th, 2000
14 sale date.
15 MS. YEE: Thank you.
16 Good afternoon.
17 MR. WEISS: Good afternoon.
18 MS. YEE: Thank you for your patience.
19 If you can pull the microphone right up in
20 front of you so we can hear you?
21 Introduce yourselves for the record and you
22 have ten minutes.
23 MR. WEISS: Good afternoon. Walter Weiss
24 appearing for the Petitioner, Andra Sachs. On my left
25 is Ms. Sachs.
26 And also in the courtroom are two witnesses, if
27 we have time, Mr. Brad Sachs and Ms. Lesley Summers, who
28 are -- who have submitted affidavits. And if the Board
1 would like to question them, they are here and
3 MS. YEE: Very well. Please proceed.
4 TXPYR@@: Okay. This case involves -- the
5 issue here is whether Ms. Andra Sachs was a resident or
6 domicile of California in the year 2000.
7 I think the sale date of the shares was, I
8 believe, either March or April, not February. But, in
9 any event, to give you a little bit of background,
10 Ms. Sachs had a very rough 1999. In May of 1999 she
11 lost a minor child, a tragic accident. In August of
12 1999 she was ousted from Flashcom, the company which she
13 was a founder, along with her ex-spouse. She was
14 forcibly ousted. And in November of 1999, I think the
15 coup de grace was she had a marital separation from her
16 husband. And at that time she made up mind that she had
17 had enough of California. She had enough problems here
18 and she decided to leave California on a permanent
20 So, she relocated to Nevada. And she resided
21 throughout the year 2000 with her mother-in-law. And
22 on -- strange as it may seem, she had a friendly
23 relationship with her mother-in-law, her husband's
24 mother, despite the forcible breakup. She had joint
25 custody of her two children, who stayed in California.
26 Her estranged spouse also stayed in California. And
27 Ms. Sachs went on to a new life in Nevada. She spent
28 not all of her time in Nevada, she spent time also in
1 Florida and in Hawaii.
2 In Nevada she received a Nevada driver's
3 license. She made an offer to buy a house up in
4 Northern Nevada up in the Reno area that was in escrow,
5 it fell out of escrow. That was around early '99 --
6 early 2000. She ultimately acquired -- she also made an
7 offer to buy a house in Las Vegas, which was built in
8 2000. She ultimately acquired title to it in 2001.
9 She acquired a house in Hawaii and spent
10 several months in Hawaii in 2000, as well, because she
11 looked at Hawaii as a possible place to relocate.
12 And she also spent some time in Florida. She
13 actually acquired title to the Hawaii property in 2000.
14 So, she spent approximately 75 percent of the
15 time outside of California. And -- but the key thing
16 here, her domicile, she did not have the intent to come
17 back to California. She only came back here to,
18 obviously attend to certain business activities she had
19 or she still had owned some real property here and she
20 also came back here to see her children. She came back
21 approximately twice a month, but she did not have the
22 intent to relocate here and -- from there.
23 I want to -- I guess there was some confusion
24 on my part. I want to bring tot he Board's attention
25 some additional authority from my position. I thought I
26 could submit this as an exhibit and I offer it if the
27 Board will accept it even. But there is a few cases
28 that are similar that I want to at least cite to the
1 Board, bring to the Board's attention where a person
2 such as Mrs. Sachs, even though they have business
3 connections in California and there are still
4 connections here, they were held to be nonresidents of
5 California for income tax purposes.
6 I cite a case, the Appeal of Stephen D. Bragg,
7 in 2003. That's Bragg, B-R-A-G-G, and Stephen is
8 S-T-E-P-H-E-N. And my cite is CCH, California Tax
9 Reports, Section 15-110.266. And Bragg involved a
10 situation where a taxpayer had left California and, as
11 in Mrs. Sachs' case, she conducted her business
12 activities outside of California. She was an investor.
13 She was ousted from Flashcom and she made her money
14 dealing with investments. She had several Nevada
15 entities already that were formed prior to her locating
16 in Nevada. She had Max Singer Limited Partnership that
17 owned real estate. She had Marlene Moss Trust, Inc.
18 She had a company, Minority Electronics. And she had a
19 company called High Tech Online, Inc., all Nevada
21 And she basically worked -- she was a -- what
22 you call you a techie. She worked with her -- you know,
23 her company was one of the founders of the broadband
24 concept. So, she basically -- I'm sorry, not broadband,
25 but D. S. L. and she basically used her computer and
26 performed her activities out there and really had no
27 business activities in California other than attending
28 to things that were already there. And that --
1 obviously, when you break up from your spouse, it's very
2 hard to divide everything up and divide up assets in one
3 fell swoop. It takes time.
4 So, in addition to the Bragg case, which I
5 cited, Petitioner also cites as authority a case, Fred
6 C. Klemp, F-R-E-D C. K-L-E-M-P, a 1975 case, CCH
7 California Tax Reports, Paragraph 1 --
8 Section 15-110.557 where basically the California court
9 overruled the Board, the California Superior Court
10 overruled the Board and held taxpayer had a closer
11 connection with Illinois, despite owning a home in
13 And in Mrs. Sachs' case, she did own a home in
14 California, but she did not reside there. Her
15 ex-spouse, Mr. Sachs resided there. But title was in
16 both of their names. And I'm not -- you know, it's --
17 you know I have to make this clear to you -- to the
18 Board as well.
19 And a final case I cite, which is even more
20 similar, Raymond H., R-A-Y-M-0-N-D H., and Margaret,
21 M-A-R-G-A-R-T (sic) R., Berner, B-E-R-N-E-R, a 2000 case
22 and the cite is CCH Tax Reports, Section 15.11575,
23 where the Board relied on affidavits by friends, family
24 and business associates to believe the taxpayer resided
25 or was domiciled outside of California. Here, as part
26 of the record, there are four affidavits. There is
27 Ms. Sachs' affidavit, she's here; Mr. Sachs, her
28 ex-husband; Miss Nina Lifschultz and Lesley Summers,
1 that verify that Miss Sachs lived outside of California.
2 She resided in -- near northern Las Vegas and near
3 Summerlin with her -- you know, her mother-in-law.
4 Unfortunately -- you know, I'd love to have her
5 mother-in-law here to testify, but she's deceased. So,
6 my best witness I can't bring here. But, anyway -- so,
7 that -- that verifies that, these people will verify her
8 location. And those are from there.
9 In addition -- let's see, what else? Miss --
10 there's a -- the Franchise Tax Board has assessed a
11 penalty of over $50,000. And I am not really -- in the
12 briefing the petition wasn't spelled out, but I want to
13 make it clear on the penalty issue, if the Board rules
14 against taxpayer for any reason, and I want to make the
15 penalty issue clear, that Ms. Sachs did not do this on
16 her own. She relied on the advice of her CPA, Ken
17 Lorin, who had been her CPA for over 20 years. That's
18 L-O-R-I-N, Ken Lorin. And it was actually, she --
19 Mr. Lorin gave her the idea to leave California. I
20 guess she explained the situation and she moved. She
21 discussed this with him. That wasn't the reason why she
22 left, but, you know, it definitely was an issue. She
23 relied on Mr. Lorin's advice, fully disclosed all the
24 issues to Mr. Lorin and he filed the, you know, non --
25 this nonresident return for her. So, you know, it was
26 her regular CPA. He was a competent CPA. He's been in
27 business a long time. It wasn't some newcomer she went
28 to just to get a return done.
1 So, essentially, those are my issues.
2 Ms. Sachs wants to, you know, speak. You're welcome to
3 add things I missed.
4 MS. SACHS: Mr. Weiss did a very good job in
5 kind of telling the story. And I just want to reiterate
6 that 1999 was absolutely the most horrific, worst year
7 of my life and I was very glad to get out of California
8 after that year. And I kind of had to regroup and kind
9 of, you know, get myself together again. And it was
10 good that I left because, you know, I had a chance to
11 kind of build billed my strength. I don't know how many
12 of you have been through bad divorces and, you know,
13 trauma in your life, but it -- I needed to get out of
15 And I spent at lot of time relaxing in Hawaii
16 and most of the time in Nevada. And Nevada really did
17 kind of get my mind off of all of the problems and I,
18 you know, I still go to -- I am still living most of the
19 time in Nevada. I'm in kind of a relaxing golf course
20 setting over there and, you know, I was not here in 2000
21 other than to come back every couple weeks to visit my
22 kids. And I brought them out there in the summers.
23 Whenever they had vacations I took them out with me to
24 Nevada. And we he spent a lot of time there together.
25 So, I absolutely was a Nevada resident for that year and
26 a few years after.
27 And I still spend a good amount of time in
28 Nevada. That's all I wanted to say.
1 Thank you.
2 MS. YEE: Thank you very much, Ms. Sachs.
3 Mr. Weiss?
4 MR. WEISS: One last thing I want to add and
5 get this out.
6 There is -- in the part of the Franchise Tax
7 Board's, their briefing, their position, they cite
8 actually court documents that Ms. Sachs signed in late
9 2001. Let me point out, No. 1, they're late 2001. To
10 explain the situation, I don't believe Ms. Sachs still
11 did not come back to California. She had the intent --
12 her domicile was to not come back here. I think she
13 eventually came back, 2002-2003, but the -- I want to
14 point out that these are -- she had to sign extensive
15 documents. There were deadlines by her attorney. Her
16 ex-husband was involved and they used the words Orange
17 County and that's not accurate.
18 I also want to point out that these -- these
19 pleading were not verified, they're not under penalty of
20 perjury and I think they were done due to a deadline.
21 And the Franchise Tax Board relies on that and I want to
22 explain that, point that out.
23 And you're free to question Ms. Sachs as well
24 on that, on those pleadings. So, I'm going to get these
25 things right in front of you.
26 MS. YEE: Very well, thank you very much.
27 You'll have five minutes on rebuttal.
28 Franchise Tax Board?
1 MR. HASKINS: Thank you. Good afternoon, Madam
2 Chair, Members of the Board.
3 I'd like to just --
4 MS. YEE: Would you introduce yourself for the
6 MR. HASKINS: Christopher Haskins for the
7 Franchise Tax Board and this is Ron Hofsdal to my
9 Without repeating the entire brief, I wanted to
10 point out a few pertinent dates I think are important.
11 In 1998, Ms. Sachs and Mr. Sachs created --
12 formed Flashcom, the company at issue. She was an
13 officer of the company, on the Board of Directors. Later
14 in that year, in May, Ms. Sachs and Mr. Sachs bought
15 22,000,500 shares from Flashcom.
16 In 1999 Ms. Sachs either renewed or obtained a
17 new California driver's license that was valid through
18 2003. And in 1999 she was living at 23 Ridgeline Drive,
19 Newport Beach. As far as our records indicate, that was
20 the address that was used. And, as she stated, in 1999,
21 in August, she was fired by her husband from Flashcom.
22 On February 8, 2000, the year at issue, the
23 Appellant agreed with Flashcom to a stock buy back in
24 the amount of $9,000,000. That agreement set
25 February 11th date unless the parties agreed otherwise
26 and there is no indication that the parties agreed
28 On February 28th, her husband, Mr. Sachs, filed
1 for divorce. That date it is also notable because on
2 the Appellant's 2000 part year nonresident return, filed
3 in 2001, she stated under penalty of perjury that she
4 became a resident of Nevada on February 28, which is 17
5 days later than the day that the sale of the stock
6 closed which is at issue in this case.
7 On May 12th of 2000 Flashcom filed an SEC S1
8 filing stating, quote,
9 "We repurchased 1,612,903 shares of common
10 stock held by Ms. Sachs for a purchase price
11 of $9 million."
12 That is in the past tense, that had already
14 May 24th, the Sachs' divorce becomes final and
15 Ms. Sachs is given custody --I'm sorry, is awarded
16 23 Ridgeline Drive as her residence and a Sunset Beach
17 property in California. She is, as she noted, awarded
18 custody of the children. The children, however, stay in
19 California and attend California schools. So, Mr. Sachs
20 also remains in California.
21 Later that -- during 2000 Ms. Sachs, either
22 through the Max Singer partnership or through her own
23 ownership owned 12 properties in California, commercial
24 and residential. She also owned four businesses that
25 were doing business in California. There's no
26 indication that these businesses that were mentioned
27 were doing any business in Nevada.
28 In 2000, according to the records that we've
1 been able on locate, deed records, assessor records,
2 Appellant owned no residential property in Nevada.
3 Now on July 25th of 2000, she did open a P. O.
4 box in Zephyr Cove, Nevada, but she used an address to
5 which she has admitted she never resided.
6 In 2001, February 20th, Appellant purchased
7 441 Emerald Heights, Las Vegas as a residence. That's
8 the address that was listed on her late filed 2000
9 return. And I don't mean "late filed," she did file for
10 a legitimate extension. So, it wasn't late, it was just
11 filed later in the year.
12 June 14, 2001, the Appellant filed two lawsuits
13 in California courts stating that she was, quote,
14 "At all times relevant herein," a resident of
16 The relevant times covered by the lawsuits were
17 February 2000 through June 2001.
18 In 2001 Appellant obtained a Nevada driver's
19 license, again using Zephyr Cove address, which had a
20 physical address attached to it, to which she admitted
21 she never lived.
22 The affidavits that were submitted originally,
23 none of them are specific about addresses where
24 Ms. Craig (sic) lived, none of them were specific as to
25 the time frame. They all are general statements.
26 And I'd like to contrast with the State -- with
27 the affidavits that were admitted or submitted in the
28 Berner case. If recall, in the Berner case there were
1 more than 30 affidavits submitted. Those affidavits
2 stated, "I played golf with Mr. Berner. I played bridge
3 with Mrs. Berner. We went out to dinners together."
4 And, in fact, one of the affidavits was from
5 the local postmaster, who became so familiar with them,
6 he knew them by name and said, "I became friends with
7 them." Those affidavits did support that the Berners
8 had changed their residence to Nevada. Those affidavits
9 bear no resemblance to the affidavits in this case.
10 In this case we asked the Appellant for
11 evidence to show that she had changed her domicile or
12 residency. We received next to none. We did ask for
13 credit card information. We were told there weren't any
14 credit cards. We asked for checking account information
15 and we obtained a checking account for Max Singer
16 Partnership. Now that was a business. And, so, we
17 didn't -- we examined the checks, but they didn't
18 indicate that they were for personal items necessarily.
19 The Max Singer Partnership and the Appellant, as its
20 major partner, it is a real estate company and, so, the
21 suspendings were on real estate things like fixing
22 houses and stuff.
23 But, again, all of the properties that we're
24 talking about here were California properties.
25 In the end, I think that we have offered enough
26 evidence, more than enough evidence to sustain our
28 I would ask the Board to sustain our
2 Thank you.
3 MS. YEE: Thank you very much.
4 You have five minutes on rebuttal.
5 MR. WEISS: All right. You want to go ahead
6 and talk about the -- Ms. Sachs will talk about the
7 dates because I think there's some dispute on the dates
8 and I will finish up.
9 Go ahead.
10 MS. SACHS: I would say there is quite a few
11 inconsistencies in his story.
12 No. 1, the Zephyr Cove address, I did -- I
13 wasn't sure whether I was going to move to Las Vegas or
14 Lake Tahoe. So, I visited Zephyr Cove. And I did buy
15 a house in Zephyr Cove in 2000, early 2000. And it --
16 we opened escrow and it fell out of escrow because I had
17 a -- I was going through the divorce and everything and
18 I could not qualify for the loan. So, the house fell
19 out of escrow in Zephyr Cove.
20 And then I started looking at Las Vegas. And
21 then I went to Las Vegas and I spent some time with my
22 mother-in-law, quite a few months, just kind of healing.
23 And I was looking to buy property there. And I did find
24 a house, but it was being built. So, it took a quite
25 while before the escrow was closed. I believe it was at
26 least six months before I could go in and sign all of
27 the papers and close the sale on it. And then I moved
28 into that house. And that was the one on Emerald
1 Heights in Summerlin.
2 So, as far as the dates, yes, I did get a house
3 in Newport Beach in the divorce and my ex got another
4 house in Orange County. And we had joint custody of the
5 kids. And I saw them on the weekends, when they had
6 holidays and he also stayed at that house for quite a
7 bit, 23 Ridgeline Drive.
8 The divorce -- it was a bitter divorce, but we
9 put the kids ahead of everything and, you know, tried
10 for make it work and we kind of used -- I didn't want to
11 take them out of school in Newport because I didn't
12 think it was right to move them out of Orange County and
13 my ex would not let me at the time. But I took them to
14 Nevada with me as much as I could. And we spent a lot
15 of time, you know, in Nevada with grandma and just
16 trying to recuperate.
17 So, as far as the dates, you know, on the -- it
18 was kind of a big blur, I'll try to do the dates as best
19 I can, but I know that -- you know, I didn't get -- I
20 can't remember the exact month I got the payment, but I
21 know it was sometime in 2000, I believe, late 2000 when
22 they finally bought the stock back after just kind of a
23 big battle.
24 And there was a lot of legal papers going back
25 and forth. It was not an easy transaction. There was a
26 lot of emotions involved and hostility. And when --
27 they would throw papers in front of me, "Sign this.
28 Sign that." You know, they never asked me where I
1 lived. They would just put down addresses, the last
2 known address. So, when they'd say, "Sign here." So,
3 if I signed any of them living at 23 Ridgeline, that --
4 they were totally incorrect.
5 You know, I signed so many papers, it was just
6 pile after pile after lawyer after lawyer after lawyer.
7 And I was -- you know, if he has any papers saying that
8 it wasn't my handwriting that put in there, you know, in
9 Newport Beach. It wasn't mine.
10 MR. WEISS: A couple of things I want to add.
11 While it's true that the properties in some of
12 these entities were California properties, these were
13 properties acquired while she was a California resident.
14 So, it's not expected -- if you are working on -- it's
15 not where the property is located, it's where you're
16 performing services. She's actually performing services
17 in Nevada on these things. And these properties were
18 previously acquired before she left California.
19 The only property she actually acquired after
20 she left California in 2000, she actually took title to,
21 was a property in Hawaii, which -- that she was going to
22 consider living there. But it didn't work out.
23 I think she was going through a traumatic
24 time -- loss of a child, marital breakup, business
25 breakup. And what makes it worse is the business
26 breakup was not -- her partner was her spouse.
27 So, there was a lot of litigation going on.
28 She was actually later sued to try to get the money back
1 by, I beliee, Smith Barney and that's where all this
2 ensuing litigation arose in 2001.
3 I don't -- you know, with all due respect to
4 the Franchise Tax Board, I'm not sure where he's saying
5 the time period of the litigation is in the paperwork.
6 I have not seen that in any of his papers. But, you
7 know, maybe he could bring that to my attention.
8 But -- and, so, I think the dates are critical.
9 I think that the negotiations took place February,
10 March. I believe the SEC reporting says May. And, in
11 fact, when she received the money was after May. It did
12 not -- it took only threatened litigation for her to get
13 the money.
14 So, you know, I think -- you don't -- when you
15 get a divorce or you have a business breakup, you can't
16 divest yourself of everything in California immediately.
17 It takes time and, you know, you try to make the best.
18 And her intent was not to come back here, she
19 wanted to go forward. And everything she acquired was
20 out of California thereafter.
21 MS. OLSON: Time has expired.
22 MS. YEE: Okay, thank you.
23 Questions? Ms. Steel?
24 MS. STEEL: I think these dates are very
25 critical here. I just have few questions.
26 When did you get your driver's license or
27 voter's registration in Nevada? Do you know around
1 MS. SACHS: I believe it was 2000.
2 MS. STEEL: Right. But is it after May or, I
3 mean, after February or before, February 11th?
4 MS. SACHS: You know, I'd have to probably
5 research that one.
6 I just remember that I decided I needed to get
7 out of California in '99. That's when I decided it,
8 when Brad moved out of the house in November, that's
9 when I decided I wanted to get out of California.
10 MS. YEE: Okay.
11 MS. SACHS: And I knew that. And I don't know
12 if I changed my license right away because my California
13 one was still valid. So, I might have -- you know, I
14 don't know if I ran to the DMV when I got there. I
15 don't think I did right away, you know, maybe like in
16 the next few months.
17 MS. STEEL: Do you have any proof of, you know,
18 you lived in -- outside of California at that point?
19 MS. SACHS: Well, I know that -- well, I
20 didn't -- I didn't work. He's saying I had all these
22 No, when I left here in late '99, I didn't
23 have -- these businesses were not active. These were
24 just like entities that were created to put properties
25 into, you know, cause that's what I was -- you know,
26 before that I was kind of in investing in real estate.
27 So, there was no active -- I not working. I
28 wasn't even set to work. After '99, I -- there is -- I
1 couldn't -- you know, it was very difficult to even
3 MS. STEEL: You had a joint custody with your
5 MS. SACHS: Yes.
6 MS. STEEL: Did you take them back to Nevada
7 some --
8 MS. SACHS: Yes, many times.
9 MS. STEEL: -- after -- I am talking about the
10 school. They still staying here or --
11 MS. SACHS: They wanted to stay in California.
12 They're very close with their daddy. They didn't want
13 to change schools. So, we went back and forth. And we
14 just did for a while.
15 MS. STEEL: Okay. For your tax return that you
16 wrote as a nonresident for -- you signed it on, I
17 believe it's May 24th or May 28.
18 Why did you do that if you moved beforehand?
19 MS. SACHS: What year was that?
20 MS. STEEL: 2000, year 2000.
21 MS. SACHS: Nonresident of Nevada?
22 MS. STEEL: Nonresident of California?
23 MS. SACHS: Of California, yeah.
24 MR. WEISS: You didn't say a year, I'm sorry,
26 MS. STEEL: 2000.
27 MR. WEISS: She signed the return in 2001,
28 wouldn't she have signed it?
1 MS. STEEL: I believe -- yeah, 2001 -- 2000
2 return that you signed as a nonresident for May.
3 MS. SACHS: I was a nonresident of California.
4 MS. STEEL: But you specified a date; is that
6 MS. MANDEL: You mean the -- was it
7 February 28?
8 MS. STEEL: The February 28.
9 MR. HASKINS: February 28, 2000 is the date
11 MS. STEEL: Okay, why did you sign it if you
12 moved beforehand, before 2000?
13 Why you signed it on February 28th?
14 MS. SACHS: I don't remember signing that with
16 MS. STEEL: Your tax return.
17 MR. WEISS: What year tax return are you
18 referring to? Because the 2000 is not due until
19 April 15th, 2001.
20 So, I'm a little confused, sorry. I mean,
21 you're talking about the '99 return, '98?
22 MS. STEEL: Even what I think FTB's going to
23 show you the paperworks there.
24 MR. HASKINS: If I may, Ms. Steel --
25 MS. YEE: Yes.
26 MR. HASKINS: -- you're talking about the
27 2000 --
28 MS. STEEL: 2000 tax return, right.
1 MR. HASKINS: -- part year, nonresident return?
2 MS. STEEL: Right.
3 MR. HASKINS: We received it August 15th, 2001.
4 And there is a signature here and Mr. Lorin dated it as
5 of August 2nd, 2001.
6 And this is the return that you have as your
7 Exhibit U.
8 MR. LEONARD: That's the one that declares
10 MS. STEEL: That's declare --
11 MR. HASKINS: Yes, sir -- yes, ma'am.
12 Right here on page 1 of the Schedule CA 540,
13 line 3,
14 "I became a nonresident, entered new state and
15 date of move, Nevada, 2-28-2000."
16 MR. WEISS: And it's our position the sale was
17 after that date. That's what -- we differ from the --
18 MS. STEEL: The contract was signed on
19 February 11th.
20 MR. WEISS: But the closing wasn't -- I don't
21 know when you received the money, but -- when did you
22 receive the money?
23 MS. SACHS: Not 'til long after that.
24 MS. MANDEL: But that was -- what you -- we
25 have like a new document from FTB?
26 MR. HASKINS: Oh, I will get to that if you --
27 MS. MANDEL: Well, I think that's kind of what
28 they're talking about right now.
1 Because you have the date of -- the dates of
2 February 8, February 11, February 28th being after.
3 When Mr. Weiss was talking, he said that
4 Flashcom didn't pay until much later in the year, only
5 on threat of litigation. And I don't recall exactly
6 what the documents in the record establish and this
7 Schedule D they're showing as 12-31 as the date.
8 MR. HASKINS: Correct.
9 MS. MANDEL: So, that's kind of where Ms. Steel
10 and your conversation is right now, which is when did it
11 really -- when -- what's the -- what's the operative
12 date for -- because the way everything was written up
13 before it was that the February date, mid-February dates
14 are the operative dates.
15 And since she's saying she didn't -- on the
16 return that she didn't become a Nevada resident until
17 February 28th, you know, end of story with all of the
18 document backup.
19 But now what I am hearing him say is that the
20 transaction didn't happen until later in the year, we
21 didn't get the money and, so, and the Schedule D you
22 put in, can you get into that?
23 Because that seems to be what people are
24 talking about now.
25 MR. HASKINS: If that is, I can, certainly.
26 The Schedule D is wrong and it has to be
27 because 12-31-2000 is Sunday. The day after is New
28 Year's day and no transactions occur on that date.
1 So, I think that that is -- and, if you notice,
2 that is also the date for the Chase H & Q. I don't know
3 why they listed that date, but that can't be the right
4 date because even Ms. Sachs has said that she received
5 the money before December 31st, 2000.
6 MS. MANDEL: Okay. Then maybe can you address
7 what you know about -- and Mr. Weiss can address what he
8 knows and what documents there are to support that it
9 didn't happen in February?
10 And I don't know who goes first on that chair.
11 MR. WEISS: Well, I would say that --
12 MS. YEE: Mr. Weiss?
13 MR. WEISS: I agree -- I agree that it wasn't
14 likely that it closed on 12 -- I didn't prepare the
15 returns, so -- if I did, I could be here and I could
16 talk about it, but I didn't prepare it, Mr. Lorin must
17 have prepared the return. And that date is probably not
18 correct, it probably did not close the last day of the
20 Ms. Sachs is the best one who has personal
21 knowledge. I don't have personal knowledge. I know --
22 I didn't even represent here in that transaction.
23 When did you -- when did the transaction close
24 and when did you leave the money is really the question.
25 You know best, what time in 2000?
26 MS. SACHS: Much later than that. I think it
27 was more towards like the --
28 MR. LEONARD: Do we have bank records or
1 anything that can help us with the date?
2 And that date appears to be critical as to --
3 as to where to -- as to how to prove residency. If
4 there is any way to -- first pin that date down, then I
5 was hoping -- but it's not worth it now, I was hoping to
6 ask her witnesses, "Did you go out to dinner in
7 Las Vegas on that date or the day after or something,"
8 to help nail it down to that period, but -- but we've
9 got to get the income received date pinned down.
10 MR. WEISS: I would make an offer -- well, it's
11 sort of an offer of proof, I think that in fairness, I
12 mean, listen, if I'm sitting in your shoes I'd want to
13 know that date too.
14 I think that there should be maybe some
15 submission of a document or something with a closing
16 date or something that would clarify this issue that
17 should be -- at least submitted, maybe, maybe 30 days or
18 some time period, you know, could it be submitted that
19 would clarify --
20 MR. LEONARD: Do you and your client know that
21 it exists?
22 MR. WEISS: Is there a such document?
23 There must be. If it's an SEC document there
24 must -- a filing, there must be something in there.
25 It's an SEC company.
26 MR. HASKINS: If I may?
27 MS. YEE: Yes.
28 MR. HASKINS: The SEC document lists -- it
1 says -- it's off -- what it is is the SEC document,
2 which you have, includes the sale agreement which lists
3 February 11th. That SEC document was filed May 12th.
4 And on the front of the SEC filing they say,
5 "Here's something that we did recently. We bought
6 1,600,000 shares."
7 "We bought," not we're going to buy, we bought
8 and paid. And that closing date was February 11.
9 There's simply no other evidence of any other date.
10 We've never been provided with a deposit slip
11 that says, "Here's 12 million, $9 million going into a
12 bank account with Ms. Sachs' name on it."
13 I don't believe that exists, but as Mr. Weiss
14 said, I'd like to see it if it does.
15 MS. STEEL: Well, what's the legal effect if
16 they signed the contract date or get the money date?
17 MR. HASKINS: Well, the --
18 MS. STEEL: Closing?
19 MR. HASKINS: -- the contract was signed on
20 the --
21 MS. STEEL: February 11th?
22 MR. HASKINS: -- and it was to close on the
23 11th of February.
24 MS. STEEL: She didn't receive money until
26 MR. HASKINS: Well, that's her testimony.
27 MS. STEEL: That's what they are saying.
28 So, if they received money on May, is that --
1 if you have a proof of they received money on May then
2 that's the date that we count?
3 MR. HASKINS: That's the date that she --
4 MS. STEEL: Then she says she moved out on
5 February 28th to Nevada. So, she was not in California.
6 MS. SACHS: No, no, no, I moved out late '99,
7 right after Brad left in November.
8 MS. STEEL: Okay, what I am saying is just for
9 May and February dates, so, it doesn't -- you know,
10 that's not my question is.
11 My question is effective date is May, when --
12 when they have a proof that they received the money on
13 May then May is the right date or the February 11th
14 contract signed date is the right date by the law?
15 MR. HASKINS: She would have realized the money
16 on February 8th when she signed the contract. She had
17 the right to receive it on that date.
18 And, so, we certainly could say that that was
19 the date that it became income for California purposes.
20 MS. STEEL: Okay. But if --
21 MR. HASKINS: Just to be clear, that's not our
22 argument that she, in fact, was anywhere else but
23 California for the entire year.
24 Therefore, from our point of view it doesn't
25 matter when she got paid -- not that we have any
26 proof -- but it doesn't matter because all of 2000 she
27 was a resident of this state.
28 So, I understand your question, what if -- if
1 she actually received in her hands the money on May 5th,
2 let's say, just pick --
3 MS. STEEL: Right.
4 MR. HASKINS: -- Cinco de Mayo, is that the day
5 that she actually got it? Well, that's one argument.
6 The other argument is when she signed the
7 contract then that's the date that she realized the
8 income and that's the date that we should look at.
9 MS. STEEL: So, by the law what's the date that
10 we count if they proved that they got the money on May
11 and she signed the tax return that she moved out of
12 California on February 28th, then she was not California
13 resident at that time.
14 MR. HASKINS: If that's true.
15 MS. STEEL: So, my question -- so, that's true.
16 So, when she received the money --
17 MR. HASKINS: No, if that statement is true.
18 MS. STEEL: -- okay. I am asking you, what's
19 the law here?
20 Received the date -- I mean, received the money
21 date is the effective date or sign the contract is the
22 effective date?
23 MS. MANDEL: 'Cause so far all you've said is
24 you can make an argument this way, you can make an
25 argument that way, which is a nice lawyer statement, but
26 Ms. Steel wants to know what -- what -- if push comes to
27 shove, what is the answer that would you give?
28 MR. HOFSDAL: I would say it depends on the way
1 the funds were deposited. If they were deposited into
2 an escrow account, we're going to handle it one way, if
3 it was handed to her in a check and she failed to cash
4 it for whatever reason, it would be handled a different
5 way as well.
6 So, we don't know because although we've asked
7 for some type of proof of how those funds were handled,
8 they were never provided to us.
9 The only thing that we do have is what was
10 provided by the company to the SEC, which I would
11 suggest is pretty strong evidence as to when the
12 transaction had, in fact, occurred, absent anything
14 MS. STEEL: But that has to be -- they reported
15 to SEC that SEC by -- on May they said, "Yes, we bought
17 So, you are not really clear with the letter
18 that they really bought it -- it's very clear that they
19 bought it before May, but they are not clear that it was
20 done on February 8th or 11th.
21 So, what I want to make clear is that money
22 received -- if taxpayer can provide us a proof of that
23 money transaction that they received the money on May,
24 then at that time that this is right -- she has been
25 telling us that she's gone from California since 1999,
26 but on the tax return that we see, not that many people
27 lies about it when they fill out the tax return forms --
28 and on February 28th.
1 So, if she received the money on May instead of
2 February 11th, when she signed the contract and received
3 the money at the same time, so, if she received the
4 money on May, then she was not California resident at
5 that time.
6 MR. HOFSDAL: Oh, I don't agree with that.
7 MS. STEEL: I want to count those dates, that's
8 why I am asking you that by California law what's the
9 effective date?
10 Is the money receiving date or sign the
11 contract date, that's why I am asking you.
12 MS. MANDEL: For purposes of answering
13 Ms. Steel, I think you have to accept that her -- sounds
14 like her current view, Ms. Steel's current view is that
15 she's going by the date, February 28th on the return,
16 that her view is as of right now that's the date this
17 lady moved to Nevada.
18 MS. STEEL: She moved?
19 MS. MANDEL: We understand that FTB's position
20 is we don't think she ever moved and changed residence
21 to Nevada all of 2000.
22 But to answer Ms. Steel, assume February 28th
23 is the move date. Then what's the law? Is it the date
24 she -- the money hits her bank account or is it the date
25 that some agreement --
26 MS. STEEL: She signed the contract, yeah?
27 MS. MANDEL: -- was signed?
28 That's what she's asking you.
1 MR. HASKINS: As Mr. Hofsdal pointed out, it
3 MS. YEE: Well --
4 MR. HASKINS: -- it depends on how it was
5 handled because he said if it was stuck in an escrow
6 account then it's -- then it's available to her on that
8 MS. YEE: But does that suggest that it's not
9 the date of the contract and really kind of how the
10 proceeds are actually --
11 MR. HASKINS: No, I don't think -- I'll say
12 this also, the S1 filing -- in the contract it
13 specifically states if the parties agree to a different
14 date in writing, that's -- there is nothing offered with
15 the S1 that indicates it was any other date than
16 February 11.
17 So, in the agreement itself February 8th was
18 the day it was signed, February 11th is the closing date
19 or a date mutually agreed by the parties. That would
20 have to be included in the S1 and it wasn't.
21 So --
22 MS. STEEL: You are giving two answers right
23 there. Either date is fine.
24 Can you prove that your money's been deposited
25 after February 28?
26 MR. WEISS: Two things, let me respond.
27 You know, he's correct when he says it depends
28 on this stuff. I mean, normally a transaction takes
1 place when a date of -- it closes, that's the sale date
2 normally, date of closing.
3 But sometimes the money might be tied up and
4 you don't have receipt of it.
5 So, I think a fair answer would be the date of
6 closing and you have the actual right to receive the
7 money would be really the date of sale for reporting.
8 But Mr. Sachs is here and he was an officer, I
9 think he was actually the CEO of the company. He, I
10 believe, has personal knowledge on this issue.
11 MS. YEE: Mr. Sachs, would you come forward?
12 MR. WEISS: Let him testify.
13 He could come forward and he could maybe help
15 MR. SACHS: Hi, Brad Sachs, CEO and Chairman of
16 the company at the time.
17 So, I'm the guy that raises the money for the
18 company, it was about $85 million at the time. And that
19 was to buy back Mrs. Sachs' shares of the company
20 because she was forced out by the Board of Directors.
21 And I was on the road all over the New Year's
22 trying to -- part of what happened to Mrs. Sachs with --
23 with our separation was a pressure that she was out and
24 hadn't received the settlement she was entitled to or
25 they had struck upon late in '99.
26 I was out raising the money for the company and
27 that round of financing did not close until late April.
28 And we funded in early May.
1 So, with the SEC filing, the plan was to go
2 public. And we had to get the -- Mrs. Sachs' funding
3 out of the way before we could file the SEC document.
4 So, we were pushing as hard as they could to
5 finish the round of financing, but that didn't happen
6 until like late April, very early May.
7 So, if the document says that we just finished
8 with Mrs. Sachs, that's because just finished -- it
9 was -- it was -- the Board decided that we wanted to
10 have the funding close, the stock payback, and -- before
11 we filed the SEC paperwork because it would be cleaner
12 that way for the public when they filed the shares.
13 So, does that answer your question about the
14 dates? It was talked about with Mrs. Sachs at the end
15 of '99 as far as the buyback of shares, but not actually
16 executed until early May of 2000.
17 MS. YEE: Okay. And what can you provide in
18 terms of any substantiation of this? Of --
19 MS. MANDEL: Documents?
20 MS. YEE: -- what you just described? Any
21 documentation to support your --
22 MR. SACHS: You know, I don't know what I would
23 have. I -- you know, I might have a plaque somewhere
24 with a date on it, you know, for milestone markers when
25 you, you know, raise money. So, I don't know.
26 MR. WEISS: Bank statements, if they could be
27 produced would be good because I -- you know, I don't
28 know anybody who's walking around holding a $9 million
1 check and not putting it in the bank.
2 MR. SACHS: Yeah, it was all lump sum.
3 MR. WEISS: You don't walk around with that.
4 MR. SACHS: It was in an escrow account or it
5 was just a straight buyout of the shares, pay with a
6 check one time.
7 MS. YEE: Well, bank statements, that's a
8 pretty --
9 MS. SACHS: I might be able to find something.
10 I didn't know I had to bring anything.
11 But if I would have known it, I would have come
12 prepared and looked for it. I could probably find
13 something, but I think he's correct on the dates.
14 I mean, I believe it was May.
15 MS. YEE: Okay. It's a pretty significant
16 transaction. I would think that certainly bank
17 statements would help, but anything else that kind of
18 leads up to, you know, actually the proceeds being --
19 MS. SACHS: Well, all I know is like right
20 after I got the money and the company filed bankruptcy,
21 I spent the next ten years fighting the lawyers and the
22 trustees for Flashcom.
23 After a solid, I think it was eight years of
24 legal battles, I wound up paying a lot of that money
25 back and all of the legal fees.
26 And I know this isn't taken into consideration,
27 but that's what happened afterwards. So, it was like
28 ten years of a big blur or a massive legal battle trying
1 to get that stock repurchase money back.
2 MS. YEE: To the Franchise Tax Board, while
3 we're kind of on this issue of documents that can be
4 produced, what else would be helpful?
5 MR. HOFSDAL: I would suggest that at some
6 point she would have to sign those shares over to
7 Flashcom and there has to be some type of filing or some
8 type of document with a signature and a date certain.
9 You know, we're not dealing with an arm's length
10 transaction between husband and wife when we're dealing
11 with a stock sell back.
12 I mean, I would suggest that that might even be
13 the strongest documentation to show when this
14 transaction happened, even more so than when payment was
15 actually received because it's a different escrow and
16 different components to that.
17 But I agree with you, I find it rather hard to
18 believe that $90 million (sic) in financing was found
19 and 90 million (sic) --
20 MR. HASKINS: 9 million.
21 MR. HOFSDAL: No, no, but didn't -- he
22 initially got $90 million in financing, in funding and
23 then you would pay $9 million to his spouse and there
24 would be zero documentation to substantiate when this
25 date occurred.
26 You know, the assumption that we have is it
27 would be -- that it would be consistent with the
28 documentation we do have, the contract, and we do have.
1 Otherwise, when you are dealing with the amount of tax
2 that we're dealing with, it's a pretty routine, easy
3 document to uncover. And the fact that it hasn't been
4 strongly suggests that February 11th was the date.
5 MR. WEISS: With all due respect, nobody ever
6 asked me for a copy of that document. And I don't know
7 if there is -- I don't see any evidence in anything they
8 filed where it's asked.
9 And if somebody would have asked me for that
10 document, I clearly would have produced it. So, I --
11 it's news to me, you know, that they asked for a
12 document. Nowhere in any documentation do I see that.
13 MS. YEE: Mr. Leonard?
14 MR. LEONARD: The reason for that, I think, is
15 the real bigger question that revolves around this,
16 Franchise Tax Board believes that Mrs. Sachs never left
18 MR. HASKINS: Correct.
19 MR. LEONARD: Never left California.
20 MR. HASKINS: Not in 2000.
21 MR. LEONARD: So, once we get that date, then
22 the real question comes into play, can you show where --
23 where you were and what state you resided in on the date
24 that you got that money?
25 And to the extent your testimony is that that's
26 kind of the period that the transition was taking place,
27 that would be something I would be interested in.
28 Franchise Tax Board's already convinced that it
1 didn't occur any date that year, so, it doesn't matter
2 to them.
3 So, that's why you -- it didn't matter which
4 date the deal was signed or the check came in or the
5 check was deposited or the money was spent because
6 they -- they seemed to argue that you were a California
7 resident the whole time.
8 MR. HASKINS: Mr. Leonard, please, let me be
10 Franchise Tax Board did ask for bank
11 statements. We did ask for records. We didn't get any.
12 MR. LEONARD: Okay.
13 MS. MANDEL: Let me be clear, we did ask.
14 MR. LEONARD: Okay. But the real question is
16 MS. YEE: That's correct.
17 MR. WEISS: Domicile is really -- the intent to
18 leave, domicile. She had the intent to leave.
19 MR. HOFSDAL: Well, it's not the intent to
20 leave, it's the actual leaving that triggers it.
21 And as Ms. Sachs has testified, she didn't know
22 whether she was going to move to Hawaii, she bought a
23 house there, that might be a good location.
24 Well, maybe northern November, but that fell
25 out of escrow.
26 Well, let me live with my mother-in-law for a
28 And while she may have had the intent to leave
1 California at some point in the future, domicile is not
2 established in a new location or domicile is not
3 abandoned until it's established in a new location.
4 And we have this fuzzy, it could be Hawaii, it
5 could be Douglas County, it could be Las Vegas.
6 MS. SACHS: No, no. I would like to interrupt
7 on that because my intent was to either move to Lake
8 Tahoe or Las Vegas, Nevada and then also spend some time
9 in Kauai. That was my intent.
10 I did not want to live -- I couldn't live in
11 Kauai because of the joint custody. I had to be in
12 proximity to my children so I could come back and visit
14 So, that's the reason I settled on Nevada, so I
15 could drive back and forth and see my kids and pick them
16 up and take them to Nevada. It was really a child issue
17 more than anything.
18 MR. LEONARD: As for me, the proof of the
19 intent is so nebulous I'm looking for the reality.
20 MS. YEE: Yeah.
21 MR. LEONARD: Some tangible locations and I
22 think Franchise Tax Board, in an interesting list in one
23 of the previous cases where the affidavits were, "I went
24 to dinner with the taxpayer in Las Vegas on that night,"
25 and named a date.
26 Things like that would be very helpful to me.
27 And dinner -- not that we all traveled together for a
28 weekend in Vegas, but --
1 MS. SACHS: Well, I brought my sister as a
3 MR. LEONARD: -- that I was over at their
4 house or we did church together or things like that.
5 MS. SACHS: My sister lived in Nevada the whole
6 time I was there and we spent a lot of time together
7 doing different things.
8 MR. LEONARD: She's available?
9 MS. SACHS: She's here as a witness.
10 MR. WEISS: She's here.
11 MS. SACHS: She's right behind me.
12 MR. WEISS: And she's signed an affidavit
13 and --
14 MR. LEONARD. Do you want to do it now or do
15 you want to do a 30-30-30 to document these things?
16 MS. SACHS: She lived there with her three
17 children and I'd bring my kids and they'd all play
18 together. We'd go to different places.
19 So, it was just -- it was a great -- you know,
20 it was great to have family there and that's another
21 main reason I chose to move to Las Vegas, because my
22 sister was there.
23 MS. YEE: Okay. Well, why don't we hear from
24 your sister because what I think what we're going to
25 likely be doing is allowing more time to see whether we
26 can get some of those documentation presented, both as
27 relates to the specific transaction and to get the dates
28 straight, but also to respond to the underlying issue,
1 as Mr. Leonard has reminded us, about residency.
2 And at this point in time there is really -- I
3 mean, from our perspective for the tax year in question,
4 2000, there is really no kind of record or anything
5 substantiating purchase, renting, using, any kind of
6 property in Nevada.
7 So, we're kind of left in this dilemma of
8 really not knowing what was taking place during the tax
10 Please, if you could introduce yourself for the
11 record, and take some time to make your statement?
12 MS. SUMMERS: I am Lesley Summers. I did live
13 in Nevada. And I did visit Andra several times and she
14 did come and visit me.
15 And I was living there. I had been living
16 there for several years. And she was going through a
17 terrible, terrible divorce. So many things happened to
18 her I don't know how she held up mentally. And she did
19 want a break.
20 And, you know, I said, "Well, come out here
21 and, you know, it's a nicer place, you know, the air is
23 And she came to live -- try to live out there
24 and, well, actually did live out there, but she was
25 trying to buy a house. And she did buy a house
27 MR. LEONARD: Question?
28 MS. YEE: Yes, Mr. Leonard?
1 MR. LEONARD: Do you remember the date that she
2 moved into her mother-in-law's house?
3 MS. SUMMERS: The -- not exactly, but I know it
4 was --
5 MR. LEONARD: Month and the year maybe?
6 MS. SUMMERS: No, I can't, it was -- my memory
7 is not that great. It was a while ago.
8 MR. LEONARD: Do you --
9 MS. SUMMERS: When she actually moved in there?
10 MR. LEONARD: Yeah.
11 MS. SUMMERS: I think it was in like '99. Was
12 it? I don't recall.
13 MR. LEONARD: Are there any other things that
14 you and she did that there might be a record that we
15 could go back to that might still exist?
16 I have no idea what.
17 MS. SUMMERS: The only thing that I can
18 remember is one time I got very sick she did take me to
19 the doctor. And I didn't have medical insurance at the
20 time and she paid the bill and bought me medicine.
21 That's all I can say.
22 MR. LEONARD: What year was that?
23 MS. SUMMERS: In 2000.
24 MR. LEONARD: 2000, early or late in the year?
25 Do you remember that?
26 MS. SUMMERS: No, it was probably -- I don't
27 even remember.
28 MR. LEONARD: Okay, thank you.
1 MS. YEE: Other questions, Members?
2 Well, let me suggest this, you heard kind of
3 the gaps that we're trying to grapple with. And I think
4 there is probably agreement to allow you more time to
5 try to provide the documentation to help us fill in
6 those gaps.
7 What I would like is to just -- requests for
8 records have been made previously. Let's kind of get
9 clear about what specifically would be helpful.
10 You've heard some suggestions from us up here
11 that I'd be willing to move for additional time on this,
12 but I suspect that you're going to need probably more
13 than 30 days to get your hands on some records.
14 MS. MANDEL: I have another question that just
15 occurred to me.
16 MS. YEE: Ms. Mandel?
17 MS. MANDEL: Can you remind me how old the
18 children were who were here, the two children at the
20 MR. LEONARD: '99.
21 MS. MANDEL: Yeah, the 2000 time frame when --
22 MS. SACHS: Nine and seven.
23 MS. MANDEL: And they stayed -- you're saying
24 they stayed here with your ex-husband?
25 MS. SACHS: Yes.
26 MS. MANDEL: I guess it's still a while ago,
27 I'm just -- the one record that I was thinking of is if
28 there would be school records that might have the
1 information on both parents. Because presumably if they
2 were in his charge when they were here and in school, if
3 some reason they couldn't reach him, perhaps they would
4 still list her --
5 MR. LEONARD: With a contact information?
6 MS. MANDEL: -- with contact information. I
7 don't know, that just occurred to me.
8 MS. SACHS: I had my cell phone with me
9 everywhere. So, I mean, that's -- they -- I am sure
10 they have information and I am sure they'd have my
11 telephone number there and --
12 MS. MANDEL: But you're saying it might be a
13 California cell phone?
14 MS. SACHS: Well, I never -- I never changed
15 the cell phone number. I have had the same cell phone
16 number for probably like the last ten years.
17 MS. MANDEL: Well, it was --
18 MS. SACHS: You know, I never changed it.
19 MS. MANDEL: It was a thought.
20 MS. YEE: Mr. Weiss?
21 MR. WEISS: On the credit cards, we -- I do
22 have some credit card statements, the problem is most of
23 them are 2001.
24 I mean, there is Nevada activity and Florida
25 activity in 2001. I mean, I would submit that.
26 2000, I think one of the problems was to try to
27 get all of the credit cards.
28 MS. SACHS: Yeah, you know, I tried getting a
1 lot of the stuff, but, you know, kind of moving around a
2 lot. I had a problem kind of locating all of the
3 records. And I did find quite a few credit card
4 statements, I believe, that I submitted and showed that
5 I was in Nevada and, you know, purchases I had made and
6 restaurants I was at and gas and, you know.
7 I found whatever I could. It was kind of a
8 mishmash. Going through that time period there was just
9 a lot of moving around of records and most of my records
10 also -- I had a lot of my personal records at Flashcom
11 when the company went down.
12 I got locked out of my own company. That's
13 basically what happened. I didn't have any access.
14 They dropped my desk off in the parking lot with all my
15 records and just threw them in the parking lot.
16 I didn't even get any records. Most of the
17 records were at my office. And it was -- you know, it
18 wasn't a real happy parting when I left, you know, it
19 was like they locked the door and all my stuff in there.
20 And I never got anything but the desk back.
21 MR. LEONARD: What date was that?
22 MS. SACHS: That was in '99.
23 MR. LEONARD. Do you know what date?
24 MS. YEE: August?
25 MS. SACHS: That was August, yeah.
26 MR. LEONARD: August?
27 MS. SACHS: Shortly after, it was August or
1 MS. YEE: Well, I think it still would be --
2 and I would venture to guess there must be something out
3 there with respect to the stock transaction. So, let's
4 start there.
5 And then you've heard kind of where we're
6 struggling with respect to the -- your activities in the
7 year 2000 relative to being outside of California.
8 So, let's see what we can come up with on that.
9 MS. SACHS: I know that they asked me about
10 social clubs. And I really wasn't in a social mood. I
11 didn't belong to any clubs anywhere.
12 I didn't have a gym membership. I didn't
13 really have any affiliations. I was just, you know,
14 really kind of in mourning and not really doing
15 anything social.
16 And you know, Walter kept saying, "Well, what
17 about social? You know, didn't you go to the gym?"
18 I said, "No, I did not. I couldn't." You
19 know, at that time I was not in a good frame of mind.
20 And what could I produce for you, you know?
21 I -- whatever I found that Flashcom didn't
22 steal from me, you know, I gave him. And that's all I
23 could find.
24 MR. WEISS: She's also a non voter, so -- I
25 mean, she didn't vote in either state, which -- and I
26 was -- you know, I've been trying to get as much as I
28 And, you know, per testimony -- and she told me
1 the same thing -- she was in seclusion, mourning, you
2 know, having a lot of problems.
3 You know, we -- can I request 60 days to get as
4 much tangible evidence as I can and to get bank records
5 to, you know, try to help you in making a decision if
6 that's okay with the FTB?
7 MR. HASKINS: I have no objection.
8 MS. YEE: Okay, yeah. We'll allow 60 days for
9 you to do that.
10 MR. WEISS: Thank you.
11 MS. YEE: And while you're here and before you
12 leave, I would encourage you to confer with our
13 representatives from the Franchise Tax Board just to be
14 sure that we are looking for documentation that will be
16 MR. WEISS: Okay, thank you.
17 MS. YEE: Is there a motion on this?
18 I'm sorry, Mr. Haskins, did you have another --
19 MR. HASKINS: Well, how exactly will we
20 structure this?
21 Do you want additional submissions of documents
22 and then briefing related to that?
23 MS. YEE: Yes, and then --
24 MS. KELLY: It will be either a 60-30-30 or a
25 however many days you want to afford to the FTB as well.
26 But it would be opening with Appellant
27 providing additional documentation and briefing related
28 to that.
1 And then with Franchise Tax Board replying.
2 MR. HASKINS: 60-30-30 sounds good.
3 MS. YEE: Okay.
4 MR. WEISS: That's fine, thank you.
5 MS. YEE: Okay, motion to that effect?
6 MR. LEONARD: So moved.
7 MS. YEE: Motion by Mr. Leonard. Is there a
9 MS. STEEL: Second.
10 MS. YEE: Second by Ms. Steel.
11 Without objection, that motion carries.
12 Thank you all very much and good luck to you in
13 finding the --
14 MR. WEISS: Thank you.
15 MS. YEE: -- any additional documentation.
16 Thank you.
1 REPORTER'S CERTIFICATE.
3 State of California )
4 ) ss
5 County of Sacramento )
7 I, JULI PRICE JACKSON, Hearing Reporter for the
8 California State Board of Equalization certify that on
9 SEPTEMBER 22, 2009 I recorded verbatim, in shorthand, to
10 the best of my ability, the proceedings in the
11 above-entitled hearing; that I transcribed the shorthand
12 writing into typewriting; and that the preceding pages 1
13 through 47 constitute a complete and accurate
14 transcription of the shorthand writing.
16 Dated: October 26, 2009
20 JULI PRICE JACKSON
21 Hearing Reporter