Central Hollywood Coalition’s Tax-Exempt Status Under Audit by Franchise Tax Board; Kerry Morrison Stamps Little Foot, Shakes Little Fist, Loudly Exclaims “NO FAIR!!”

Kerry Morrison at the February 9, 2015 meeting of the Central Hollywood Coalition's Board of Directors, in the midst of a characteristically inarticulate expression of disgust with government bureaucracy and the general unfairness of it all.
Kerry Morrison at the February 9, 2015 meeting of the Central Hollywood Coalition’s Board of Directors, in the midst of a characteristically inarticulate expression of disgust with government bureaucracy and the general unfairness of it all.
Kerry Morrison, speaking at the February 9, 2016 meeting of the Central Hollywood Coalition’s Board of Directors, filled the boss-guys and boss-gals in on the California Franchise Tax Board’s like, TOTALLY UNFAIR, ongoing audit of the tax-exempt status of the CHC. The upshot seems to be that some guy a while ago forgot to pay some fee, and things escalated through no fault of Kerry’s, to the point where, because bureaucrats are dumb and mail letters to the wrong place, the FTB is auditing the CHC but a lot of records are missing because 12 years ago is a long time and how can they expect that we would still have them?!? There’s also a looming problem, unmentioned here by Kerry, in that the CHC, like all BID management companies, signed a pledge to the City of Los Angeles that they would “…notify the awarding authority [the Los Angeles City Clerk] within 30 calendar days after receiving notification that any governmental agency has initiated an investigation which may result in a finding that the contractor did not comply with any federal, state, or local law in the performance of the contract…” Kerry didn’t mention anything about this clause, and we don’t (yet) know whether the CHC is complying with it. Stay tuned for info on that.

Meanwhile, if you have five minutes to spare, watch and listen here for a master-class lesson in white privilege, zillionaire privilege, power-broker privilege, and generalized contempt for the mundane reality that most of us inhabit, all expressed with the liberal use of hand-waving, hair-flipping, eyebrow-waggling, and uvular ejective plosives. If you don’t have time, we understand. There’s a transcript after the break, and we’ll provide commentary on selected juicy bits as well.

The Franchise Tax Board is a pack of bush league, incompetent, ineffecient, swarming, triviality-obsessed, little bureaucrats, but they still might cause some trouble for the mighty Central Hollywood Coalition.
The Franchise Tax Board is a pack of bush league, incompetent, ineffecient, swarming, triviality-obsessed, little bureaucrats, but they still might cause some trouble for the mighty Central Hollywood Coalition.
So, I’ve been briefing you on the situation for the past couple months ever since Kilroy brought to our attention that the Secretary of State’s website indicated that the Franchise Tax Board had suspended the tax-exempt status for Central Hollywood Coalition, and that was initially owing to the fact that when Duke was treasurer, he apparently did not file a ten dollar filing fee with our state tax return in 2012.
We can’t capture in words Kerry’s affect as she says the words “ten dollar filing fee.” So much world-weariness. So much despair at the trivial concerns of the bush league bureaucrats at the FTB. Most people understand that it doesn’t matter if it’s over ten dollars or ten thousand dollars, if the tax people come at you, they’re going to take you down. Best to make nice.

And because Duke’s name was listed for, on the Secretary of State website as the agent for service of process, I didn’t even know that that existed, for maybe eighteen months as the FTB was attempting to inform us through Duke, we did not know that that was happening.
They forgot to change their agent for service of process and somehow this is the FTB’s fault? That they tried to contact a corporation through the legally established means for contacting that corporation and no one responded, so now there are consequences? That’s just, you know, how the world works. Kerry didn’t even know that there was such a thing as an agent for service of process? We’re not zillionaires, and even we knew that. It’s how you get in touch with corporations. If you don’t see how absolutely weird this little speech is, just imagine that you gave the IRS a wrong mailing address and then complained, as you were being hauled off in chains for not answering their letters for 18 months, that you didn’t even know that correct mailing addresses existed.

we immediately proceeded to pay our ten dollar fee for 2012 plus a penalty, sixty five dollar check, sent it off to the Franchise Tax Board and waited… And, and, oh, and we had to reapply completely. Bylaws. Articles of incorporation, and all of our data, to reapply for our tax-exempt status.
Boo hoo hoo, eh? Let your paperwork lapse, you have to reapply.

So in December, you know, I’ve been telling you that they said it would take 60 to 90 days, and checking, it has not been changed on the website, so apparently, this letter, which is dated 12-21-15, was mailed to 1680 Vine Street. Of course we moved on 12-11. We never got this letter.
See, the HPOA moved to their new headquarters ten days before this letter was sent and didn’t set up an effective means of getting their mail. Whose fault is this? Probably government bureaucrats, of course. Certainly the Tax Board has never heard this excuse before and they’ll just forget everything now!

So found out right after the first of the year, we were able to get somebody to [inarticulate expression of disgust] take a phone call [inarticulate expression of disgust involving hand-waving, hair-tossing, eyebrow-waggling, and uvular ejective plosives] and email this to us, that they decided to proceed to do an audit, and determined that, in taxable year ending 2004 to 2006 the form 199 was not filed, for CHC.
The mighty CHC had to struggle to get someone at the Tax Board to answer the freaking phone! Welcome to reality, CHC-ites. Life is hard, and clickety-clackety expressions of disgust aren’t going to change it. At least they haven’t for us, and Mom explained to us when we were, like 7 years old, that that probably wasn’t going to change in this lifetime. We didn’t necessarily believe her at the time, but we sure do by now.

And again, this preceded the formation of the BID, preceded HPOA taking over the BID. This was probably during the years when there was a committee working to form the BID. And we don’t have those records. RBZ, we’ve asked RBZ to draft a letter for us to the Franchise Tax Board explaining that that happened before we took over management in this contract
This can’t actually be an excuse. It’s the same corporation, they’re responsible for record-keeping, no one is going to care that the HPOA took over management. It’s not like you get a do-over every time the management changes. If this worked, every shady corporation in the universe would be hiring other shady corporations to manage them all the freaking time. Or maybe they already do that? But obviously, obviously, when the HPOA took over the management, they took over the pre-existing responsibilities. Obviously.

So what will happen? Well, of course, we don’t know, and probably nothing will come of it. Despite their whining about bureaucracy and such matters, many aspects of the government are tooled carefully to provide maximum aid and comfort to zillionaires. But once in a while the beast turns upon its master. Fingers crossed! And stay tuned!


So, I’ve been briefing you on the situation for the past couple months ever since Kilroy brought to our attention that the Secretary of State’s website indicated that the Franchise Tax Board had suspended the tax-exempt status for Central Hollywood Coalition, and that was initially owing to the fact that when Duke was treasurer, he apparently did not file a ten dollar filing fee with our state tax return in 2012. And because Duke’s name was listed for, on the Secretary of State website as the agent for service of process, I didn’t even know that that existed, for maybe eighteen months as the FTB was attempting to inform us through Duke, we did not know that that was happening. Kilroy’s due diligence noticed that, brought it to our attention, we immediately proceeded to pay our ten dollar fee for 2012 plus a penalty, sixty five dollar check, sent it off to the Franchise Tax Board and waited… And, and, oh, and we had to reapply completely. Bylaws. Articles of incorporation, and all of our data, to reapply for our tax-exempt status. So in December, you know, I’ve been telling you that they said it would take 60 to 90 days, and checking, it has not been changed on the website, so apparently, this letter, which is dated 12-21-15, was mailed to 1680 Vine Street. Of course we moved on 12-11. We never got this letter. So found out right after the first of the year, we were able to get somebody to
[inarticulate expression of disgust] take a phone call [inarticulate expression of disgust involving hand-waving, hair-tossing, eyebrow-waggling, and uvular ejective plosives] and email this to us, that they decided to proceed to do an audit, and determined that, in taxable year ending 2004 to 2006 the form 199 was not filed, for CHC. And again, this preceded the formation of the BID, preceded HPOA taking over the BID. This was probably during the years when there was a committee working to form the BID. And we don’t have those records. RBZ, we’ve asked RBZ to draft a letter for us to the Franchise Tax Board explaining that that happened before we took over management in this contract, and there’s apparently a provision that if you were an organization that brought in less than twenty five thousand dollars, you may have been exempt from certain filings, and during those years, I don’t know if any of you were on that committee, forming the BID, there probably was not a lot of money coming into this organization. So, it also said here that they hadn’t gotten the 2012 and the 2014 filing fee. We have cancelled checks for those payments to go with our form 199s. So we’re in the process of drafting a letter to go back to the Franchise Tax Board to document that history, document that these two checks have been paid and cashed. I just wanted to keep you posted on that.


Image of Kerry Morrison is ©2016 MichaelKohlhaas.org. Image of Gulliver and the Lilliputians is out of copyright and we got it from the Library of Congress. Uvular ejective plosive sound file is released under an extremely free license and we got it here.

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