FTB is BROKEN
♦ INTRODUCTION
♦
ATTORNEY VIOLATES TAX CODE
REPEATEDLY - FTB DOES
NOTHING
♦
FTB AIDS & ABETS TAX EVASION
♦
WHY IS CALIFORNIA
THE "VOLUNTARY" TAX STATE?
♦
FTB'S MISSION, PRINCIPLES AND VALUES
♦
ABOUT ME & ZF MICRO SOLUTIONS
♦
CONTACT
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David Feldman, Founder and CEO, ZF Micro Solutions,
Inc.
I am an entrepreneur who has founded several companies in
California. Those companies paid California taxes and employed hundreds
of people in California who also paid California taxes. That makes it
all the more galling that the California Franchise Tax Board has chosen
to turn its back on the companies and individuals who reside in this
state and instead aid and abet the tax evasion of out of state agencies
who operated here under the radar for decades but never contributed a
dime of taxes to support any of the benefits they enjoyed here.
INTRODUCTION
This website is the product of twelve
years of frustration I have experienced in a futile attempt to persuade
the Franchise Tax Board (FTB) to enforce California tax laws and protect
the honest taxpaying citizens and California Courts from tax evaders.
Legislators
can
FIX a BROKEN AGENCY
and REDUCE the TAX GAP
(The FTB will not do it.)
1. If
our representatives want legislation regarding taxation to be enforced, they must revise the Revenue &
Taxation Code to eliminate instances of the word “may”
relating to what action the FTB takes in specific cases. "May" must be replaced by “shall.”
The FTB appears to interpret the word “may”
as license to selectively choose when to enforce the law or, even
worse, as justification to do nothing.
2. The
tax code must indicate the time frame within
which action by the FTB must occur.
I first discovered SANDS did not register with the Secretary
of State on 7/18/2007. I reported this to the Court.
SANDS registered with the Secretary of State a few days later (8/3/2007) but
failed to mention they began operating in California in
1999. I reported this to the FTB in August of 2007 (one of many
reports the FTB has ignored). I told the FTB I was a witness to SANDS'
illegal operation in California since 1999 and gave them proof. Over the next several
years I sent additional information about SANDS’ illegal
California operations (including proof of a payment to SANDS by our company). From the
time SANDS first registered until today, they have never filed
California tax returns or paid taxes here as shown in the
Certified
Response by FTB to my Public Records Act request. It took the FTB until November of 2013 to
forfeit SANDS.
(FTB
definition of Forfeited: "The business entity was
suspended or forfeited by the Franchise Tax Board for failure to
meet tax requirements (e.g., failure to file a return, pay taxes,
penalties, interest.)
NOTE: During that time California’s
tax gap grew by a factor of three (to
more than $20-billion).
3.
The tax code must
include a directive to the Courts that requires them to compel every litigant in a civil case
to provide the Court with certified
FTB proof that the individual or business entity has filed
tax returns, paid all taxes due, and is in good standing as of the
most current year, and during every twelve months that a case remains
pending in the Courts. This would rely on item 2 above being
enacted, because in the case of the SANDS entities, who registered
but never filed tax returns or paid taxes, the FTB did nothing for
six plus years. The result was that SANDS' status with the Secretary of
State indicated SANDS was “active.” SANDS used this to repeatedly
mislead the Courts by stating that they were in good standing. SANDS
only appeared to have “standing” because the
FTB was “sitting” on their knowledge of SANDS' delinquency and never
took action.
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Enforce,
Ignore or Punitive Audit?
It will be interesting to see whether
this website persuades the FTB to enforce the law. I will not hold
my breath. The FTB may just continue to ignore the evidence and the
law and do nothing. Or, perhaps they will decide to make an example
of anyone who has the audacity to expose their contempt for
their "Mission, Principles and Values."
Stay tuned!
The failure of the FTB to protect the
State’s revenue affects every other aspect of California’s government
and is a driver of California’s on again off again fiscal problems.
The FTB’s unwillingness to enforce the
law is compounded by unethical attorneys who, aware of the FTB’s apathy
regarding tax evasion, intentionally deceive California courts and flout
the tax laws enacted to prevent tax evaders from transacting or
attempting to transact intrastate business in this state on behalf of a
foreign corporation, the rights and privileges of which have been
forfeited.
These attorneys fear no negative
consequences when they undermine the courts and the will of the people.
To prevent illegal use of the Courts by
tax cheats, the legislature passed specific sections of the Revenue &
Taxation Code to prevent tax cheats from using California courts but the
FTB’s failure to enforce the law creates a situation where the tax
cheats have the upper hand on every honest business and individual in
California.
Although the FTB is by far the worst of
the agencies I have dealt with, there are many other agencies and
non-governmental entities, such as the State Bar of California, that
also refuse to act because the unethical attorneys deceptively claim
that their clients have done nothing wrong, and they are supported by
the FTB’s lack of prosecution.
If you expect the FTB to pay any attention to you or
enforce the law you'll have to wait until...
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ATTORNEY VIOLATES TAX CODE
REPEATEDLY - FTB DOES
NOTHING
California attorney
Michael B. Carroll has repeatedly appeared in court and filed pleadings on behalf of Sands
Brothers Venture Capital LLC (CA tax ID ) and SB New Paradigm Associates LLC
(CA tax ID ) [hereafter together as “SANDS”], his
clients who have
been forfeited by the State of California for failure to file tax returns
or pay taxes. The filings and appearances are
violations of Revenue & Taxation Code (R&TC
§ 19719(a), a
misdemeanor, and
R&TC § 19705 sub. (a)(2)
and sub. (d), a felony).
Does the FTB do anything?
NO!
THERE IS NO GRAY AREA HERE.
There is nothing for the FTB to investigate or determine. Attorney
Carroll's violations of the law are documented by the transcripts and
pleadings that are part of the court record. It does not take a legal
scholar to know that, as an officer of the court, an attorney who
misstates the law, as attorney Carroll did, is intentionally deceiving
the court. It is also clear that his deceit was done with malice
aforethought because he knew
when he entered the court that his clients were forfeited and by
representing them he was aiding and abetting his clients' tax evasion.
R&TC § 19719(a) and
R&TC § 19705 sub.
(a)(2) and sub. (d) are unequivocal black letter law
that is not subject to
interpretation – especially by the person violating them.
I reported the tax evasion
to the FTB and told them I was a
percipient witness with additional evidence who would testify in a
criminal proceeding.
Has the FTB responded to
my complaint?
NO!
Has the FTB even had the
courtesy to respond?
NO!
WHY NOT? The FTB hides behind
R&TC § 19542;
R&TC § 19542.1;
R&TC § 19542.3,
claiming they are prohibited from releasing a taxpayer’s “confidential
information regarding furnished or secured pursuant to this part, Part
10 (commencing with Section 17001), or Part 11 (commencing with Section
23001).”
This is just an excuse to
cover their
dereliction of duty to
prosecute tax evasion. FTB investigators claim they cannot speak with a
percipient witness to a crime because they are required to protect
the privacy of a tax evader? What? Are they insane?
Imagine if the police
told victims and/or witnesses to crimes that they could not speak with
them in order to protect the privacy of the assailant! Any other
law enforcement agency would be ridiculed and considered incompetent or
derelict.
Aside from the absurd
“logic” behind their refusal to speak with a percipient witness to
multiple instances of tax evasion, I am not asking to see any
confidential information that the SANDS entities submitted to the FTB.
In fact, SANDS were forfeited by the FTB because they have never
filed a return or paid any taxes, so the FTB has nothing from SANDS
that they could show me – even if they wanted to!
I am
offering to provide additional
evidence
documenting 19 years of tax evasion by SANDS in California but the FTB
is not interested.
I have
proof of SANDS’ transacting intrastate business in California beginning
in late 1999 and continuing (through the illegal representation in
California courts) to the present. I have proof of payments SANDS
received related to their California intrastate business transactions
totaling millions of dollars.
No thanks, not interested!
I have
also attempted to point out to the FTB that since SANDS have never filed a tax return
or paid a dime in California taxes, they can hardly be referred to as
taxpayer entities whose “privacy” is protected pursuant to either
R&TC § 19542,
R&TC § 19542.1, or
R&TC § 19542.3.
Additionally, I have been reminding the FTB that their own publication,
FTB Publication
FTB 689 (REV 09-2011) and the latest version
FTB 689
(REV 03-2019) both specifically state: “In
addition, privacy laws do not protect fraudulent activities.”
[It is noteworthy that this form used to be on the FTB website "forms"
page but now you have to know it exists and file an e-mail request to
obtain it. It must be that pesky clause about "privacy" not protecting
fraud!]
I have
offered to indemnify (up to the full potential $5,000 fine) any FTB
employee accused of “revealing” any private information referred to in
R&TC § 19542, et seq.
No thanks, not interested!
I expect attorney
Carroll to again appear illegally and participate, on behalf of his
forfeited clients, in oral argument in an appeal pending before the
Sixth District Court of Appeal, so I offered to defray the costs for an
FTB investigator to attend the hearing in San Jose to witness the crime
firsthand.
No thanks,
not interested!
You may think it would make sense to also file a complaint against this
attorney with the
State Bar of California. I did. The State Bar cares even less about
attorney's who violate rules and law than the FTB. That’s another story for another web
site (coming
soon: Regulate-Lawyers.com).
Read the Complaint
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FTB AIDS & ABETS TAX EVASION
You can lead the FTB to the law, but you can’t make them enforce it.
When
the FTB picks and chooses which laws it will enforce and which crimes to
prosecute it is violating its stated Mission, Principles
and Values (see below) and undermining the will of the people of
California as enacted by their elected representatives.
The
refusal to enforce the law against this attorney and his clients cannot
be because it is not worth the effort, as the amount of taxes, interest
and penalties for the years 1999 through 2019 is in the hundreds of
thousands of dollars. The total due may be far in excess of that amount
if the FTB looked into SANDS’ other California activities aside from
those which I reported. According to the FTB’s
Interagency Intercept Collection Program Participation Guide for 2020,
the minimum amount the FTB will attempt to collect is $10.00 (see
Chapter 2, Debt Criteria).
Perhaps the real reason the FTB does not prosecute the SANDS entities
and their attorney is that doing so would actually require work
on their part. It is much easier to send a threatening letter to a
low-income individual to collect $10.00 knowing that the threat of
garnishing their wages alone will prompt compliance.
As long as the
bureaucrats at the FTB are the ones running the asylum with little or no
oversight the Mission, Principles and Values will all fall by the
wayside.
On numerous occasions
over the course of 12 years, I have sent the FTB hundreds of pages of
evidence confirming that the SANDS entities were
doing business and
transacting intrastate business in California, and had
nexus through their San Francisco office and California and New York
employees.
During the litigation
that SANDS began in February of 2005, we discovered (July 2007) that the
SANDS entities had never registered with the California Secretary of
State. However, their verified complaint, filed under penalty of
perjury, stated they were “duly authorized to conduct business in the
State of California.”
Revenue and Taxation Code § 23301.6, defines duly authorized
unequivocally: “A taxpayer that is required under Section 2105 of the
Corporations Code to qualify to do business shall not be deemed to have
qualified to do business for purposes of this article unless the
taxpayer has in fact qualified with the Secretary of State.” (It
would seem that perjury is no longer a crime in California.)
When we notified the
court that SANDS was not registered, SANDS registered on August 3, 2007,
after the statute of limitations had already run on SANDS purported
claims. Although SANDS has never paid a dime in California taxes it took
the Franchise Tax Board until November of 2013 to finally forfeit them
for non-filing of returns or payment of taxes. Now even though their
attorney continues to appear illegally on SANDS’ behalf, the FTB looks
the other way.
When the FTB refuses
to investigate and/or prosecute tax evaders, any rational observer would
consider them to be
complicit in the commission of the crime. In essence, the FTB is
aiding and abetting tax evasion. What is the FTB’s
mens rea, or state of mind, when they refuse to speak to a
percipient witness to the crime of tax evasion? According to the
Model Penal Code there is a four-tiered classification of the
mens rea related to an illegal act. Of the four classifications, the
FTB’s failure to act against intentional tax evasion qualifies under the
first three.
1.
acting purposely - the defendant had an underlying conscious
object to act
[Comment: the FTB, having all they needed to prosecute and secure a
conviction chose not to act. Absent any explanation about why they do
not act, one can assume they have an underlying reason for not doing so.
A further assumption might be that it is easier to act against
individuals who lack the resources that venture capital firms can
muster.]
2.
acting knowingly - the defendant is practically certain that the
conduct will cause a particular result
[Comment: the FTB, having all they need to prosecute and secure a
conviction is certain that the delinquent taxes, interest and penalties
that have accrued since the SANDS entities began California operations
(in late 1999) will never be paid.]
3.
acting recklessly - The defendant consciously disregarded a
substantial and unjustified risk
[Comment: the FTB, having all they needed to prosecute and secure a
conviction chose not to act. This created the certainty of
non-compliance by the tax evaders and damage to honest tax paying
companies and individuals in California.]
4.
acting negligently - The defendant was not aware of the risk but
should have been aware of the risk
[Comment: the FTB does not get a pass by claiming they were” not aware
of the risk” of aiding and abetting the SANDS entities’ tax evasion. In
addition to providing the reams of documentation regarding the tax
evasion of the SANDS entities, I personally appeared twice at the
December FTB board meeting and begged (yes, begged, it’s in the
transcript of the meetings) and made an impassioned plea that they take
action because our company, that employed 45 Californians, and various
shareholders were being bankrupted by the illegal tax evasion. The
Executive Officer the FTB falsely represented, in answering a question
from a board member, that there was no nexus found. However, I had
submitted evidence that nexus did exist. – which apparently has never
been reviewed.]
Unfortunately, the FTB
has been granted immunity by the legislature (presumably after heavy FTB
lobbying efforts) that allows them to pick and choose who they will
prosecute. As far as I can tell, no guidelines exist (or if they exist
the FTB will not produce them) regarding the criteria upon which their
decisions are based.
If you or I ignore the
law, and in doing so we commit a crime, and percipient witnesses
identify us, we will most likely be prosecuted.
The FTB will make an
example of a defenseless low-income individual who can’t fight back but
will stand on the sidelines as those with resources or political
influence get away with tax evasion that rises to the level of grand
theft. The FTB allows dishonest attorneys to lie to the courts and abuse
the system they should not have access to because it would require
actual work to challenge their false claims. It apparently does not
matter to the FTB that they become accessories to tax evasion or that
honest taxpayers’ life savings are stolen by criminals using the courts
illegally.
It is time to take
“enforcement” out of the hands of an agency that refuses to act in the
interests of the people of California. This agency has an annual budget
of almost a billion dollars per year, yet it has a collection record
that places it far below any private debt collection company average.
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WHY IS CALIFORNIA
THE "VOLUNTARY" TAX STATE?
Read what FTB
Executive Officer Selvi Stanislaus had to say in the
FTB's 2012-2016
Strategic Plan. In that plan Exec. Officer Stanislaus
also proclaims that the Franchise Tax Board “collects”
nearly $53 billion annually in taxes and fees. This is not only untrue,
it is deceitful. Stanislaus is taking credit for something the FTB has
neither caused to occur nor instigated. The FTB actually “collects” a
minimal amount of all taxes that flow into state coffers. Those of us
who are honest taxpayers file our returns and send in our payments with
no effort whatsoever on the part of anyone at the FTB. Claiming the FTB
collects $53B annually is like saying a sewer “collects” rain! In both
cases it just falls in – the sewer doesn’t make the rain and the FTB
doesn’t “collect” the taxes. California has a volunteer tax system
and as long as the FTB refuses to prosecute intentional tax evasion the
Tax Gap will continue to grow.
The law must be
changed so that tax cheats are denied the services the rest of us pay
for and support. No state agency should be allowed to issue use permits,
licenses, certificates to any business that is not current in all
registrations and tax payments. A simple mandate that any business
entity present a certificate from the Secretary of State and the
Franchise Tax Board that all required filings are current and that all
fees and tax payments are up to date before they are allowed to file a
lawsuit or defend an action in California courts based on any business
transacted in California.
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FTB'S
MISSION, PRINCIPLES AND VALUES
Read their lofty statement here>
About the FTB
The FTB’s Mission,
Principles and Values page might lead one to believe that this is an
agency operating in the interest of fairness, legally recognized norms
for the application of tax laws, and as a protector of the rights of
California’s honest tax paying citizens. Personal experience has led me
to conclude otherwise. The FTB appears to be more concerned about the
rights of tax evaders, and those who aid and abet their tax evasion,
than the rights of the people who pay their salaries.
FTB:
Our Mission - Our mission is to help taxpayers file tax returns
timely, accurately, and
pay the correct amount
to fund services important to Californians.
Comment:
In order to achieve that “mission” the FTB must be willing to enforce
the law timely and
prosecute tax evaders and their co-conspirators so that they pay the correct amount and fund
services important to Californians. After operating in California for
seven years, the SANDS entities finally registered with the Secretary of
State in August 2007. SANDS have never filed a tax return or paid taxes
but it took the FTB until November 2013 to forfeit them. Timely?? Please! What unmitigated
hypocrisy! The people who pay their salaries have to file timely but the FTB can sit on its
collective hands for six years before forfeiting SANDS and
has yet to take action against SANDS or their attorney who continues to
illegally use the courts on SANDS’ behalf – yes, the courts the rest of
us pay for!
FTB:
Our Principles |
Comment: |
Protect taxpayer information and privacy. |
FTB should take note that the operative word in
their principles is “taxpayer.” SANDS has never
even filed a return much less paid any tax. The FTB should stop hiding behind
R&TC § 19542. |
Carry out our fiduciary responsibilities to
taxpayers by managing their accounts with accuracy and financial
integrity. |
Once again, the operative words are “responsibilities
to taxpayers.” Tax evaders who have never filed a return
do not qualify. There is no integrity in protecting tax evaders. |
Operate with transparency to maintain public
trust and confidence. |
FTB will not speak to a percipient witness who
can document and testify to multiple instances of willful tax
evasion. Transparency? Trust? Hardly instills confidence. |
Conduct our business in accordance with the
Statement of Principles of Tax Administration, Taxpayers’ Bill
of Rights, and our organizational values. |
There are too many examples that the FTB is
ignoring these to even attempt an analysis. |
FTB:
Our Values |
Comment: |
Lead with Integrity and
Inspiration
We pursue the right path, ideas, and communicate clear
expectations to maximize potential. |
The right path:
follow the law.
Ideas:
here’s an idea; act when someone reports tax evasion and offers
evidence.
Communicate:
When a real taxpayer asks for help, try responding! |
Bring Our Best
We exemplify honesty, credibility, and accountability. |
Honesty:
enforce the law
Credibility:
the annual increase in the tax gap does not inspire credibility
Accountability:
Try answering to the will of the taxpayers who pay your
salaries. |
Deliver Excellent
Products and Services
We collaborate to meet the needs of our customers. |
Meet the needs of our
customers? Hasn’t
the FTB got this wrong? The honest taxpayers of California are
their
employers, not their customers! FTB should try enforcing the laws they
were hired
to implement. |
Contribute to a Caring
Community
We create a supportive work environment that allows us to
flourish in our community. |
Work environment that allows
us to flourish:
Honest taxpayers
don’t begrudge FTB employees a supportive work environment, but
they need
to make sure that the community at large flourishes also. To
ensure that happens FTB must enforce the law and respond to the public. |
Become Experts at What
We Do
We are motivated to continually improve and grow. |
Continually improve and grow:
enforce the law, prosecute tax evaders, and close the tax gap –
all good places to start improving. |
A Bit More About "Transparency"
In a time when we are demanding more
transparency from our government agencies, the FTB strives for less.
Prior to 2012, when you asked the FTB to provide the status of an
entity, the FTB gave you a document that contained much more
information. Then the FTB announced taxpayers could save time and money
(their time or ours?) using the FTB’s new online self-service
application for obtaining entity status letters. The problem is, the FTB
now provides far less information than they did previously.
Entity Status Letter Before
2012
Entity Status Letter After 2012
Why the change? Could it be that they
were embarrassed by their failure to actually provide all the
information on the previous form? Or perhaps they wanted to cut a few
positions so there is more discretionary budget money for… well we don’t
know what they really do with a budget of almost a Billion
dollars. They certainly are not using it to close the tax gap or enforce
the law regarding tax evaders and their attorney co-conspirators.
The Tax Gap
Perhaps if the FTB showed a bit more
interest in enforcing the law the state’s tax gap would not be growing
at the astonishing rate that it has. The 2006 report on the Tax Gap by
then Controller, Steve Westly, showed the gap was $6.5-Billion. Then, in
the 2011 Annual Report to the Legislature, submitted by Executive
Officer Selvi Stanislaus, the tax gap was listed as approximately
$8.5-Billion. Just eight years later, the FTB proudly reported that for
2018, the estimated annual tax gap for California is $20 billion to
$25 billion!
On the linked page, the FTB states that
“One of our main responsibilities is to collect state income tax and
corporate franchise tax. Sometimes, people don’t pay their taxes. Those
who don’t pay their state income taxes contribute to California’s tax
gap — the difference between taxes owed and taxes paid.”
This same page also lists the top 500
tax delinquencies. The Corporate income tax list of Top 500 tax
delinquencies totals $29,480,832.59 and the Personal income tax list of
the Top 500 tax delinquencies totals $556,957,276.82. Even by government
standards that’s money worth going after. If the FTB won’t do it I am
certain that a reasonable collection fee would encourage freelance
attorneys to take up the cause. Wasting thousands of dollars in time
and effort, the
FTB goes after someone in their 70s who owes $392 while leaving more
than half a billion on the table!
Here’s a thought: Start prosecuting the
tax cheats and publicize the prosecutions. The number of scofflaws who
decide to pay voluntarily might increase significantly!
If you decide to try this and need an
easy to prosecute test case complete with documentation and percipient
witnesses go back up to
ATTORNEY VIOLATES TAX
CODE REPEATEDLY - FTB DOES NOTHING.
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ABOUT ME & ZF MICRO
SOLUTIONS
I
am David Feldman. I have founded several companies in California. I have
also been a printed circuit designer, a social services eligibility
worker, a professional photographer, and a cook, among other things.
In February of 2002, I founded
ZF Micro Solutions, Inc.
It was a company intended to carry on the vision I had developed over
the previous 20-plus years vision to continually reduce the size and
power consumption of embedded computing devices by making very low
power, high reliability, cost-effective computing devices suitable to be
embedded in all manner of
Original Equipment Manufacturers (OEMs) products.
It all began with an
idea I had in 1982 to design a small low-cost single-board computer that
could be mounted directly to a disk drive. I decided to start a company
to market it in 1983. I quit my job and started Ampro Computers, and I
invited an engineer and a programmer to join me.
Ampro Computers,
Inc., developed small form factor single board computers for the OEM
market. In 1983, I designed our first processor board to be the same
footprint as the then popular 5.25-inch disk drives. Next came a board
that approximated the size of next generation 3.5-inch drives and that
ultimately became the
PC/104 industry standard.
In July of 1995, I founded ZF Micro Devices, Inc., which
introduced its first product, an under 4-watt embedded PC system the
size of a credit card, in early 1996. In November of 1999, ZF Micro
Devices introduced the ZFx86 PC-on-a-Chip. It used less than 1-watt of
power, was slightly larger than a postage stamp, and was the equivalent
of a PC motherboard in a single chip. It had our patented Failsafe boot
technology that allowed it to boot and recover from all manner of
software crashes whether caused by software bugs or external attacks.
The company received investment from numerous venture capital firms as
well as international corporations like National Semiconductor
Corporation, Samsung, and others. The ZFx86 was an immediate success and
found its way into over 400 products at companies around the world.
In 2001, one of the venture capital firms that had
invested in the company, TAT Capital Partners, Ltd. (“TAT”), a Swiss VC
firm with its main US Office in San Jose, California tried to take
control of the company by thwarting the company’s efforts to obtain the
funding needed to fill the more than $20-million of purchase orders we
had in hand (there was another $40M waiting behind that). That greed
resulted in the company running out of cash and its assets being sold at
auction. That was when I founded ZF Micro Solutions, which purchased the
rights to the ZFx86 technology.
It was at that point
that the company that was manufacturing the ZFx86 saw an opening and it
decided to misappropriate the technology and sell it directly to the
customers we had developed. That led to a two-and-a-half-year legal
dispute. It ended with a settlement that returned the ZFx86 technology
to ZF Micro Solutions along with a $20-million cash settlement and tens
of millions of dollars in intellectual property licenses.
Just days after ZF
Micro Solutions received the settlement in 2005, TAT, the VC firm that
had thwarted ZF Micro Devices funding efforts and caused its demise,
joined with two other VC firms that had invested in ZF Micro Devices,
and filed a lawsuit against ZF Micro Solutions claiming they were
entitled to receive a portion of the settlement despite the fact that
they had never invested in ZF Micro Solutions. The VC’s who joined TAT
were two related New York-based VC firms, Sands Brothers Venture Capital
LLC and SB New Paradigm Associates LLC (“SANDS”).
On July 18, 2007, I
discovered that neither TAT nor SANDS had ever registered with the
California Secretary of State even though they had been operating from
their offices in California since 1997 (TAT) and 1999 (SANDS). This is
significant because TAT and SANDS original complaint, was
verified by TAT’s founding California officer, Mark Putney. The
February 14, 2005, TAT and SANDS verified complaint, signed by
Mark Putney,
under penalty of perjury, contained a number of false statements; at
pg. 1, lines 24-27: TAT states it is a Netherlands Antilles Limited
Partnership, but it is actually a Swiss corporation. TAT forgot to
mention this until late in 2009 when they changed their story in order
to try to avoid being sued as a partnership. TAT has never been "duly
authorized to conduct business in the State of California" because they
never registered with the California Secretary of State which is
required by
R&TC § 23301.6 if a company claims it is “duly authorized.” TAT had
the required
nexus with California to be required to register with the Secretary
of State because it maintained an office and paid employee in
California, confirmed by TAT’s verified statement that its “main office
in the United States is located in the City of San Jose, County of Santa
Clara.” Then at pg. 2, lines 1-3 it states that SANDS is also "duly
authorized to conduct business in the State of California" but since it
had not registered with the Secretary of State, that was also false.
Finally, on pg. 12, Mark Putney declares that he is a party to the
action (which he later denied in order to avoid being sued personally),
that he read the complaint and knows the facts to be true and he
declared “under penalty of perjury” that “the foregoing is true and
correct.”
Unless out of state
entities transacting intrastate business in California register with the
Secretary of State and file tax returns and pay taxes, they are not
permitted to use California courts and may not be represented by
attorneys in the courts. This began my twelve-year battle to have the
Franchise Tax Board enforce the law and prosecute these tax evaders who
have destroyed a company, ruined many individuals lives, and made away
with millions – all tax free!
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CONTACT
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Subject line: FTB is
Broken
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