The Gilbert Hyatt vs. the Franchise Tax Board Case has reached another benchmark.
The case involves the residency status of Mr. Hyatt. The crux of the issue is when he became a Nevada resident. Within the disputed timeframe, Hyatt developed a microprocessor chip that earned him a considerable sum of money.
It is actually two cases –the original dispute over residency and its related tax liability (he earned $40 million on the chip), and the tort case involving the FTB’s misconduct.
Please review my summary of the events and court rulings.
California is already at risk of losing $500 million on the tort case. A Las Vegas court ruled in favor of Mr. Hyatt; California is appealing.
Bill Leonard of the California State Board of Equalization got back to me regarding my inquiry into the case. Mr. Leonard is as frustrated as I am with the FTB’s irresponsible behavior and its unwillingness to settle. He has repeatedly requested a settlement, but the FTB is ignoring him.
According to him, the cost of the appeal is now approaching the amount the FTB says is due on the residency dispute. The last account I read in a Forbes Magazine article pegged the amount due at $50 million!
That is an awfully high amount to pay for stubbornness on top of the tort liability.
Do we really need this when the state is sinking deeper into the hole?
It is time to settle and cut California’s losses on this folly.
Please write your Assembly Member and insist on action!