Taxpayers with complex tax dispute cases before the California State Board of Equalization were more likely to win their cases if they or their representatives made campaign contributions to the elected board members, either directly or through political action committees.

In a series of reports, BNA’s Daily Tax Report examined the outcomes of 70 complex, high-stakes cases argued before the board between 2002 and 2009, and compared those cases to publicly available campaign finance records.

BNA found more than $1 million in contributions to board members from taxpayers or their representatives who argued those cases before the board. All of the contributions were legal, and contributors who spoke to BNA denied any causality between their contributions and success before the board.

However, a correlation appears to exist between contribution levels and success before the board, based on BNA's original research. BNA found that 20 of the 70 cases examined had less than $250 tied to them, and those taxpayers won their cases 30 percent of the time.

Success rates rose with higher contribution rates. Dividing the remaining cases in equal groups, BNA found another 17 cases had between $250 and $16,000 in contributions tied to them, and those taxpayers won 53 percent of the time. The next group of 16 cases had $16,000 to $50,000 tied to them, and those taxpayers won 75 percent of the time. The last group of 16 cases had $50,000 to $137,000 tied to them, and those taxpayers won 88 percent of the time.

Most taxpayers in the 70 cases contributed nothing, or very little, and their outcomes varied widely. However, a handful of taxpayers or their representatives made most of the contributions that can be linked to the 70 cases. Public records show these taxpayers and their representatives achieved much better outcomes.

One firm, PricewaterhouseCoopers, was the most active in representing taxpayers with complex disputes before the board, and in making contributions to board members. PwC and its clients contributed an average of $12,714 for each of the 25 cases it argued before the board in the eight years examined by BNA. This is 55 percent more than the average contribution of $8,213 per case in the other 45 cases.

PricewaterhouseCoopers won its cases 88 percent of the time, compared to an average win rate of 59 percent for all of the cases examined, and a 43 percent win rate for the 45 taxpayers not represented by PwC.

In the series of reports, BNA examines the unique and controversial characteristics that make the State Board of Equalization unlike the adjudicators of tax disputes in all other states and the federal government.

Members of SBOE are elected and may accept campaign contributions, including contributions from taxpayers and their representatives who have tax dispute cases pending before them. At the same time, the members oversee administration of the taxes in dispute.

The elected officials also are free to meet with taxpayers and representatives privately to discuss their cases before they are weighed in a public forum.

In addition to its look at the outcomes of 70 complex cases and the contributions tied to them, BNA examined rules allowing the contributions, along with factors that are making campaigns for board seats increasingly competitive and costly; key political action committees, some with ties to taxpayers and their  representatives with cases before the board, that are exempt from contribution rules and donate actively to SBOE candidates; how campaign contributions played a role in four high-profile cases; and alternatives to the current system.

The BNA series is available at

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