BEFORE THE CALIFORNIA BOARD OF ACCOUNTANCY DEPARTMENT OF CONSUMER AFFAIRS

STATE OF CALIFORNIA

In the Matter of the Proposed Decision Against:

GARY TEDDER JEAN a.k.a. GAROLD J. TEDDER 9530 Hageman Road, Suite B # 370 Bakersfield, CA 93312

Certificate No. CPA 26742 Respondent.

Case No. AC-2014-67

OAH No. 2015050181

ORDER OF DECISION

DECISION AND ORDER

The attached Proposed Decision and Order is hereby adopted by the California

Board of Accountancy, Department of Consumer Affairs, as its Decision in the above-entitled

matter.

This Decision shall become effective on 1 0 / 2 5 / 1 5 .

IT IS SO ORDERED this 2 5 day of -S e p t e m b e r , 2 0 1 5 .

B y :_

BEFORE THE BOARD OF ACCOUNTANCY

STATE OF CALIFORNIA

In the Matter of the Accusation Against:

GARY JEAN TEDDER, aka GAROLD J. TEDDER,

Certified Public Accountant Certificate No. 26742,

Respondent.

Case No. AC-2014-67

OAH No. 2015050181

DECISION

This matter came on for hearing on July 22, 2015, before David B. Rosenman, Administrative Law Judge, Office of Administrative Hearings, State of California, at Los Angeles, California.

Patti Bowers (complainant) was represented by Nancy A. Kaiser, Deputy Attorney General. Gary Tedder (respondent) represented himself. The matter was submitted for decision on July 22, 2015.

FACTUAL FINDINGS

1. The Accusation was brought by complainant in her official capacity as Executive Officer of the California Board of Accountancy (Board).

2. The Board issued Certified Public Accountant (CPA) certificate number 26742 to respondent on September 29, 1979. Respondent is also known as Garold J. Tedder. The CPA certificate lapsed for four months in 2006, and was then renewed. The certificate expired on December 31, 2009, and has not been renewed. Effective May 21, 2015, the certificate was cancelled under the authority of Business and Professions Code1 section 5070.7, which permits cancellation if a lapsed certificate is not renewed for five years. The Board has continuing jurisdiction over a cancelled license under section 5109.

1 All statutory references are to the Business and Professions Code.

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3. On July 12, 2012, the Department of the Treasury, Office of Professional Responsibility, Internal Revenue Service (IRS) filed a complaint against respondent in a disciplinary action (Complaint Number 2012-0004; IRS Docket Number: 12-IRS-0001), in which it was alleged that: (1) respondent engaged in practice before the IRS as a CPA and was thereby subject to the disciplinary authority of the Office of Professional Responsibility; (2) respondent committed five violations constituting disreputable conduct under the applicable IRS regulations by failing to file timely federal income tax returns for tax years 2006 through 2010; (3) respondent’s failure to file timely federal income tax returns for those tax years was willful and constituted disreputable conduct; and (4) such disreputable conduct warranted respondent’s disbarment from practice before the IRS.

4. On September 25, 2012, respondent was sanctioned by the IRS via a default decision that, effective October 25, 2012, respondent was disbarred from practice before the IRS pursuant to 31 Code of Federal Regulations parts 10.50 and 10.70, and part 10, subpart D.

5. Respondent did not notify the Board that he was disbarred from practice before the IRS. Respondent testified that he thought the IRS would notify the Board.

6. In 1981, respondent formed a California corporation under the name “Gary Tedder, CPA, A Professional Corporation.” Respondent did not register the corporation with the Board.

7. Respondent explained that he paid an attorney to form the corporation and assumed the attorney handled all of the required paperwork. According to respondent, the corporation “never got off the ground” and he “walked away from the profession.” Respondent cross-examined the Board’s investigator, Jesus Silva, who answered that he was not aware of any evidence that the corporation was ever active. Respondent stated that, in 1982 and 1983, he became less interested in being an accountant and more interested in selling securities and tax shelters. In 1983, he ceased practicing as a CPA. He moved most of his new clients to two friends who were CPA’s, and sold his existing practice to other CPA’s. Due to an impending change in the law in 1986, he stopped selling tax shelters and started selling securities and, later, insurance. At a time not established in the evidence, he again practiced as a CPA near Lake Isabella. He left that practice in 2008 to move to Nevada to work for a casino. He has not practiced as a CPA since that time. However, there was no evidence that respondent ever practiced public accountancy under the name Gary Tedder, CPA, A Professional Corporation. The evidence established merely that the corporation was formed, as set forth in the records of the Secretary of State (exhibit 8).

8. Board investigator Silva sent a letter to respondent, dated October 24, 2013, requesting information regarding respondent’s sanction by the IRS. The letter was sent to respondent’s address of record with the Board at that time, on Hageman Road in Bakersfield. The letter was returned by the U.S. Post Office marked “Return to Sender; Attempted - Not Known; Unable to Forward.” Respondent did not receive the letter.

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9. Respondent explained that the address on Hageman Road in Bakersfield was a post office box he maintained for several years as his California address. He believed he used the address for two years after he went to Nevada in 2008, although he also testified he could not remember when he stopped using that address. Respondent’s present address of record with the Board is on Beech Street in Bakersfield. He believes this has been his address of record for about one year. The Board investigator testified that, as he did not know when respondent moved, he could not determine whether respondent notified the Board of a change in address within 30 days.

10. Respondent stated he did not file federal tax returns for several years because he had no reportable income. He did not have the money to hire an attorney to fight the IRS sanction case. Respondent had other disputes with the IRS that are not relevant to the allegations in this matter. Although he has made efforts to find employment, he has not succeeded. Respondent was aware that his CPA certificate expired in at the end of 2009, but thought he was not going to practice accountancy again. He was aware that there was a five year period before cancellation. He applied to the Board for “retired” status and then learned that the Accusation was pending. Respondent lives on his Social Security payment, and has old debts he cannot pay.

11. The Board incurred actual costs of $4,502.50 in charges from the Attorney General’s Office in connection with the enforcement in this matter, comprised of 25.25 attorney hours at $170 per hour (subtotal $4,292.50), and 1.75 paralegal hours at $120 per hour (subtotal $210). These costs are reasonable. In addition, Ms. Kaiser estimated she would expend an additional three hours (subtotal $510) for further preparation for hearing.

LEGAL CONCLUSIONS AND DISCUSSION

1. The standard of proof to be used in these proceedings is “clear and convincing proof to a reasonable certainty.” (Ettinger v. Board of Medical Quality Assurance (1982) 135 Cal.App.3d 853; see also Borror v. Dept. of Real Estate (1971) 15 Cal.App.3d 531.) This means the burden rests on complainant to establish the charging allegations by proof that is clear, explicit and unequivocal—so clear as to leave no substantial doubt, and sufficiently strong to command the unhesitating assent of every reasonable mind. (Katie V. v. Superior Court (2005) 130 Cal.App.4th 586, 594.)

2. Under section 5100, subdivision (h), the Board may suspend or revoke a certificate for unprofessional conduct that includes “suspension or revocation of the right to practice before any governmental body or agency.”

3. Cause exists to suspend or revoke respondent’s certificate under section 5100, subdivision (h), as his fight to practice before the IRS was revoked when he was disbarred from practice before the IRS, as set forth in Factual Findings 3 and 4.

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4. Under section 5063, subdivision (a)(3), a licensee must report to the Board within 30 days any cancellation, revocation, or suspension of the right to practice as a CPA before any governmental body or agency.

5. Cause exists to suspend or revoke respondent’s certificate under section 5063, subdivision (a)(3), as respondent did not report to the Board that his right to practice before the IRS was revoked when he was disbarred from practice before the IRS, as set forth in Factual Findings 3, 4 and 5.

7. Under section 5060, subdivisions (b) and (c), no person “may practice public accountancy under any name other than the name under which the person or firm holds a valid permit to practice issued by the board”; however, “a sole proprietor may practice under a name other than the name set forth on his or her permit to practice, provided the name is registered by the board, is in good standing,” and the name is not false or misleading.

8. Cause does not exist to suspend or revoke respondent’s certificate under section 5060. It was proven that respondent did not register his corporate name with the Board. However, there was no evidence that respondent ever practiced accountancy in the corporate name, as set forth in Factual Finding 7.

9. Under California Code of Regulations, title 16, section 52, subdivision (a) “[a] licensee shall respond to any inquiry by the Board or its appointed representatives within 30 days. The response shall include making available all files, working papers and other documents requested.” Under Code section 5100, subdivision (g), the Board may revoke or suspend a certificate for unprofessional conduct if the licensee willfully violates any regulation.

10. The duty to respond to a Board inquiry presupposes that the licensee has received the inquiry. Here, the evidence established that respondent did not receive the Board investigator’s letter, as set forth in Factual Finding 8. Cause does not exist to suspend or revoke respondent’s certificate under section 5100, subdivision (g), and California Code of Regulations, title 16, section 52, subdivision (a), for failure to respond to the Board’s letter.

11. Under California Code of Regulations, title 16, section 3, subdivision (a), a licensee “shall notify the Board of any change in his or her address of record within 30 days after the change,” in writing. This includes holders of an inactive or expired CPA license.

12. Complainant did not establish when, specifically, respondent ceased using the address on Hageman Road, Bakersfield, and began using the address on Beech Street, Bakersfield. Respondent gave very broad time frames in answer to questions, and the Board investigator properly, and candidly, concluded that, as he did not know when respondent moved, he could not determine whether respondent notified the Board of a change in address within 30 days, as set forth in Factual Findings 8 and 9. Cause does not exist to suspend or revoke respondent’s certificate under section 5100, subdivision (g), and California Code of

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Regulations, title 16, section 3, subdivision (a), for failure to give timely notification of a change of address.

13. Under section 5107, subdivision (a), the Board may recover its reasonable costs of investigation and enforcement, which are $4,502.50, as set forth in Factual Finding 11. Under section 5107, subdivision (b), the Board may submit a “good faith estimate of costs where actual costs are not available.” Here, there was no evidence that the actual costs of further preparation for hearing, which were estimated by Ms. Kaiser, were not available for submission at the hearing. Therefore, there is no basis to use an estimate. In addition, respondent’s inability to pay costs is an appropriate factor to consider in determining whether and under what circumstances costs should be awarded. (Zuckerman v. State Board of Chiropractic Examiners (2002) 29 Cal.4th 32.) Therefore, the award of costs will become effective only if respondent has his license reinstated in the future.

ORDER

1. Certified Public Accountant certificate number 26742 issued to respondent Gary Jean Tedder, also known as Garold J. Tedder, is revoked.

2. Respondent Gary Jean Tedder, also known as Garold J. Tedder, shall reimburse the Board $4,502.50 for its reasonable costs of enforcement, in the event he applies for a new license or petitions for reinstatement of his license, and the license is issued.

DATED: July 28, 2015

DAVID B. ROSENMAN Administrative Law Judge Office of Administrative Hearings

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ICa m a l a D. H a r r i s Attorney General of California M a r c D. G r e e n b a u m Supervising Deputy Attorney General N a n c y A. K a i s e r Deputy Attorney General State Bar No. 192083

300 So. Spring Street, Suite 1702 Los Angeles, CA 90013 Telephone: (213) 897-5794 Facsimile: (213) 897-2804

Attorneys for Complainant

BEFORE THE CALIFORNIA BOARD OF ACCOUNTANCY DEPARTMENT OF CONSUMER AFFAIRS

STATE OF CALIFORNIA

In the Matter of the Accusation Against:

GARY JEAN TEDDER a.k.a. GAROLD J. TEDDER9530 Hageman Road, Suite B # 370 Bakersfield, CA 93312

Certified Public Accountant Certificate No. 26742

Respondent.

Case No. AC-2014-67

A C C U S A T I O N

Complainant alleges:

PARTIES

1. Patti Bowers (Complainant) brings this Accusation solely in her official capacity as

the Executive Officer of the California Board of Accountancy.

2. On or about September 29, 1978, the California Board o f Accountancy issued

Certified Public Accountant Certificate Number 26742 to Gary Jean Tedder a.k.a. Garold J.

Tedder (Respondent). The Certified Public Accountant Certificate expired on December 31,

2009, and has not been renewed.

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JURISDICTION

3. This Accusation is brought before the California Board of Accountancy (Board),

Department of Consumer Affairs, under the authority of the following laws. All section

references are to the Business and Professions Code unless otherwise indicated.

STATUTORY PROVISIONS

4. Section 5109 states that:

The expiration, cancellation, forfeiture, or suspension of a license, practice privilege, or

other authority to practice public accountancy by operation of law or by order or decision of the

board or a court of law, the placement of a license on a retired status, or the voluntary surrender of

a license by a licensee shall not deprive the board of jurisdiction to commence or proceed with

any investigation of or action or disciplinary proceeding against the licensee, or to render a

decision suspending or revoking the license."

5. Section 5033.1 states that:

"For purposes of this chapter, 'license' shall also include 'certificate'."

6. Section 5100 states:

After notice and hearing the board may revoke, suspend, or refuse to renew any permit or

certificate granted under Article 4 (commencing with Section 5070) and Article 5 (commencing

with Section 5080), or may censure the holder of that permit or certificate for unprofessional

conduct that includes, but is not limited to, one or any combination of the following causes: ...

'(g) Willful violation of this chapter or any rule or regulation promulgated by the board

under the authority granted under this chapter.

(h) Suspension or revocation of the right to practice before any governmental body or

agency.”

7. Section 5063(a)(3) of the Code requires a licensee to report in writing to the Board

within 30 days the cancellation, revocation, or suspension of a certificate or refusal to renew a

certificate to practice as a certified public accountant or a public accountant, by any other state or

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foreign country, and the cancellation, revocation, or suspension of the right to practice as a

certified public accountant or a public accountant before any governmental body or agency.

8. Section 5060 states:

“(a) No person or firm may practice public accountancy under any name which is false or

misleading.

“ (b) No person or firm may practice public accountancy under any name other than the

name under which the person or firm holds a valid permit to practice issued by the board.

“ (c) Notwithstanding subdivision (b), a sole proprietor may practice under a name other

than the name set forth on his or her permit to practice, provided the name is registered by the

board, is in good standing, and complies with the requirements of subdivision (a).

“ (d) The board may adopt regulations to implement, interpret, and make specific the

provisions of this section including, but not limited to, regulations designating particular forms of

names as being false or misleading.”

REGULATIONS

9. California Code of Regulations, title 16, section 3, states:

“(a) Address Notification—Individual Licensees

(1) Each licensee shall notify the Board of any change in his or her address of record within

30 days after the change. The address of record is public information. If the address of record is a

post office box or mail drop, the change of address notification shall include the street address of

either the licensee's primary place of employment or his or her residence.

(2) For purposes of this section, "licensee" includes any holder of an active, inactive,

suspended, or expired certified public accountant license or public accountant license issued by

the Board which is not canceled or revoked.

(3) All notification required under this subsection shall be in writing and shall be signed by

the licensee.

“(b) Notification of Change of Address-Licensed Firm

(1) Each licensed firm shall notify the Board of any change in its address of record within

30 days after the change. The address of record is public information. If the address of record is a

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post office box or mail drop, the change of address notification shall include the street address of

the firm's principal office.

(2) For purposes of this section "licensed firm" includes any partnership or professional

corporation licensed by the Board to practice public accountancy even if the license is suspended

or expired, provided the license is not canceled or revoked.

(3) All notifications required under this subsection shall be in writing and shall be signed by

a licensed partner or licensed shareholder of the firm.”

10. California Code of Regulations, title 16, section 52, states that:

“(a) A licensee shall respond to any inquiry by the Board or its appointed representatives

within 30 days. The response shall include making available all files, working papers and other

documents requested.

(b) A licensee shall respond to any subpoena issued by the Board or its executive officer or

the assistant executive officer in the absence of the executive officer within 30 days and in

accordance with the provisions of the Accountancy Act and other applicable laws or regulations

(c) A licensee shall appear in person upon written notice or subpoena issued by the Board or

its executive officer or the assistant executive officer in the absence of the executive officer.

(d) A licensee shall provide true and accurate information and responses to questions,

subpoenas, interrogatories or other requests for information or documents and not take any action

to obstruct any Board inquiry, investigation, hearing or proceeding.”

COST RECOVERY

11. Section 5107, subdivision (a), states:

"The executive officer of the board may request the administrative law judge, as part of the

proposed decision in a disciplinary proceeding, to direct any holder of a permit or certificate

found to have committed a violation or violations of this chapter to pay to the board all reasonable

costs of investigation and prosecution of the case, including, but not limited to, attorneys' fees

The board shall not recover costs incurred at the administrative hearing."

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FIRST CAUSE FOR DISCIPLINE

(Suspension of the Right to Practice Before a Government Body)

12. Respondent is subject to disciplinary action under section 5100, subdivision (h), on

the grounds of unprofessional conduct, in that the Internal Revenue Service (IRS), a government

body, imposed discipline, penalty, or sanction on Respondent’s practice of accounting and

suspended his right to practice before the IRS, as follows:

a. On July 12, 2012, the Department of the Treasury, Office of Professional

Responsibility, Internal Revenue Service (IRS) filed its Complaint against Respondent in the

disciplinary action, entitled Director, Office o f Professional Responsibility v. Garold J. Tedder,

Complaint Number 2012-0004 (Department of the Treasury, Office of Professional

Responsibility, Internal Revenue Service, Washington, D.C., Docket Number: 12-IRS-0001). The

Complaint alleged Respondent engaged in practice before the IRS, as defined by 31 C.F.R. §

10.2(a)(2), as a certified public accountant, and was thereby subject to the disciplinary authority of

the Office of Professional Responsibility under 5 U.S.C. 500 and 31 U.S.C. § 330. The Complaint

also alleged that Respondent committed five violations constituting disreputable conduct under

the applicable IRS regulations by failing to file timely Federal income tax returns for tax years

2006 through 2010. Pursuant to 26 U.S.C. §§ 6011, 6012, and 6072, Respondent was required to

file Federal tax returns for tax years 2006-2010. The Complaint maintained that Respondent's

failure to file timely Federal income tax returns for those tax years was willful and constituted

disreputable conduct under 31 C.F.R. § 10.51. The IRS alleged that such disreputable conduct

warranted Respondent's disbarment from practice before the IRS.

b. Based on the foregoing, on September 25, 2012, Respondent was sanctioned by the

IRS via a default decision. Effective October 25, 2012, Respondent was disbarred from practice

before the IRS pursuant to 31 C.F.R. §§ 10.50 and 10.70 and 31 C.F.R. Part 10, Subpart D.

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SECOND CAUSE FOR DISCIPLINE

(Failure to Report Reportable Events)

13. Respondent is subject to disciplinary action under Section 5063(a)(3), in that he failed

to report in writing to the Board within 30 days the suspension of the right to practice as a

certified public accountant before the IRS, as set forth in paragraph 12 above.

THIRD CAUSE FOR DISCIPLINE

(Unregistered Firm Name)

14. Respondent is subject to disciplinary action under Section 5060, in that Respondent

operated under the unregistered firm of “Gary Tedder, CPA, A Professional Corporation”, as

evidenced by the California. Secretary of State’s website.

FOURTH CAUSE FOR DISCIPLINE

(Failure to Respond to Board Inquiry)

15. Respondent is subject to disciplinary action under section 5100(g) and California

Code of Regulations, title 16, section 52, in that Respondent failed to respond to the Board’s

inquiry, dated October 24, 2013, regarding Respondent’s sanction by the IRS, as set forth in

paragraph 12, above.

FIFTH CAUSE FOR DISCIPLINE

(Failure to Notify Board of Change of Address)

16. Respondent is subject to disciplinary action under section 5100(g) and California

Code of Regulations, title 16, section 3 in that Respondent changed his address, which was his

address of record with the Board, and failed to update his address with the Board as required.

PRAYER

WHEREFORE, Complainant requests that a hearing be held on the matters herein alleged,

and that following the hearing, the California Board of Accountancy issue a decision:

1. Revoking or suspending or otherwise imposing discipline upon Certified Public

Accountant Certificate Number 26742, issued to Gary Jean Tedder a.k.a. Garold J. Tedder;

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2. Ordering Gary Jean Tedder a.k.a. Garold J. Tedder to pay the California Board of

Accountancy the reasonable costs of the investigation and enforcement of this case, pursuant to

Business and Professions Code section 5107;

3. Ordering Gary Jean Tedder a.k.a. Garold J. Tedder to pay the California Board of

Accountancy all administrative penalties imposed pursuant to Business and Professions Code

section 5116; and,

4. Taking such other and further action as deemed necessary and proper.

DATED: 11/12/2014. PATTI BOWERS Executive Officer California Board of Accountancy State of California Complainant

LA2014512184 51561750_3.doc

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