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Disputed Contingent Liability of Material Magnitude (California State Franchise Tax Board)


The California State Franchise Tax Board (CA FTB) has made a demand to USCL Corporation for $185,551.61. This claim has zero basis in fact. USCL filed a set of tax returns for FY 2010 which showed zero revenue and a loss carry forward of $2.8 million.

USCL rigorously disputes this demand.

USCL is not a California Corporation. It is a Nevada Corporation. Nevada has no state income tax; corporate or personal. USCL has registered as a “foreign corporation” in California because its physical offices have been located in California. Since USCL has been in the engineering and development mode and has had zero revenue, its only obligation to the CA FTB is a $800 annual foreign corporation filing fee. USCL’s FY 2010 California State Franchise Tax Board filing indicates zero revenue and a significant loss carry forward.

The CAFTB has stated it will file a lien in the above amount against USCL. USCL has not been informed of any such lien filing as of mid-September 2016 but the firm is advising its shareholders and outside parties doing due diligence that the CA FTB has informed USCL of its intention to file such a lien.

USCL ceased its active business in August 2011 and went into a “hibernate” mode as described at: http://tamarkin.us/sh/corpstatus.php.

USCL filed no further tax returns because it was not an active corporation and its business license and corporate status was revoked by the State of Nevada pending payment of yearly fees.

Management states that a maximum possible amount owing to the State of CA is well under $10,000 with interest based on a possible assessment by the CA FTB against USCL as a foreign corporation doing business in the State of California. With zero revenue, the maximum annual fees would be $800.00 per year in the disputed years plus penalties and interest.

Management has been told by the CA FTB that USCL must first revive its Nevada Corporate status before it can petition the CA FTB for formal review and any subsequent negotiations.

USCL plans to revive its Nevada corporate status pending availability of funds based on current business activities apart from USCL and will engage proper legal and accounting professional resources to handle the disputed CA FTB matter at that time.

CA FTB April 2016 Demand to USCL
USCL April Response to CA FTB
CA June 2016 Demand to USCL
USCL June 2016 Response to CA FTB