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This file contains: Handwritten note from J.J. Elmore inviting B.B. Cash to San Clemente. 1pg. [Letter], n.d. Map of San Clemente, CA with handwritten notations. NOTE: Map too large to scan [Other Document], n.d. Letter to Fred Buzhardt from Dean S. Butler at Willis, Butler & Scheifly law offices RE: RN's 1973 tax returns. 1pg. [Letter], 4/11/1974 RN & PN individual CA income tax form for 1973. 4pgs. [Financial Records], 1973 Copy of letter from Dean S. Butler to Franchise Tax Board RE RN &PN's taxes. 1pg. [Letter], 4/12/1974 News release from Franchise Tax Board RE RN's taxes. 3pgs. [Other Document], 4/12/1974 RN & PN's income as nonresidents of CA. 1pg. [Financial Records], n.d. RN & PN's income as nonresidents of CA. 1pg. [Financial Records], n.d. Letter from Dean S. Butler to Martin Huff RE RN's 1973 tax return. 1pg. [Letter], 4/15/1974 Memo from Skip Williams to Fred RE wanting to letter. 1pg. [Memo], 4/18/1974 Copy of letter from Dean S. Butler to Kenneth W. Gemmill RE RN's tax returns. 2pgs. [Letter], 4/15/1974 Copy of letter from Dean S. Butler to Martin Huff regarding RN & PN's taxes. 1pg. [Letter], 4/11/1974 Copy of letter from Martin Huff to Dean S. Butler RE RN & PN's taxes 1969-1972. 1pg. [Letter], 4/11/1974 Copy of letter from Martin Huff to Dean S. Butler regarding RN & PN's taxes. 2pgs. [Letter], 4/10/1974 "Notice of Additional Tax Proposed to be Assessed" for RN & PN's 1969 taxes. Includes carbon copy. 2pgs. [Financial Records], 4/10/1974 RN & PN's income as nonresidents of CA, 1969-1972. 2pgs. [Financial Records], n.d.

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26126342
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WHSF: Returned, 14-5
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26126342
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WHSF: Returned, 14-5
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This file contains: Handwritten note from J.J. Elmore inviting B.B. Cash to San Clemente. 1pg. [Letter], n.d. Map of San Clemente, CA with handwritten notations. NOTE: Map too large to scan [Other Document], n.d. Letter to Fred Buzhardt from Dean S. Butler at Willis, Butler & Scheifly law offices RE: RN's 1973 tax returns. 1pg. [Letter], 4/11/1974 RN & PN individual CA income tax form for 1973. 4pgs. [Financial Records], 1973 Copy of letter from Dean S. Butler to Franchise Tax Board RE RN &PN's taxes. 1pg. [Letter], 4/12/1974 News release from Franchise Tax Board RE RN's taxes. 3pgs. [Other Document], 4/12/1974 RN & PN's income as nonresidents of CA. 1pg. [Financial Records], n.d. RN & PN's income as nonresidents of CA. 1pg. [Financial Records], n.d. Letter from Dean S. Butler to Martin Huff RE RN's 1973 tax return. 1pg. [Letter], 4/15/1974 Memo from Skip Williams to Fred RE wanting to letter. 1pg. [Memo], 4/18/1974 Copy of letter from Dean S. Butler to Kenneth W. Gemmill RE RN's tax returns. 2pgs. [Letter], 4/15/1974 Copy of letter from Dean S. Butler to Martin Huff regarding RN & PN's taxes. 1pg. [Letter], 4/11/1974 Copy of letter from Martin Huff to Dean S. Butler RE RN & PN's taxes 1969-1972. 1pg. [Letter], 4/11/1974 Copy of letter from Martin Huff to Dean S. Butler regarding RN & PN's taxes. 2pgs. [Letter], 4/10/1974 "Notice of Additional Tax Proposed to be Assessed" for RN & PN's 1969 taxes. Includes carbon copy. 2pgs. [Financial Records], 4/10/1974 RN & PN's income as nonresidents of CA, 1969-1972. 2pgs. [Financial Records], n.d.
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https://catalog.archives.gov/id/26126342
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Richard M. Nixon's Returned Materials Collection
Returned White House Special Files
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Richard Nixon Presidential Library White House Special Files Collection Folder List Box Number Folder Number Document Date Document Type Document Description 14 5 n.d. Letter Handwritten note from J.J. Elmore inviting B.B. Cash to San Clemente. 1pg. 14 5 n.d. Other Document Map of San Clemente, CA with handwritten notations. NOTE: Map too large to scan 14 5 04/11/1974 Letter Letter to Fred Buzhardt from Dean S. Butler at Willis, Butler & Scheifly law offices RE: RN's 1973 tax returns. 1pg. 14 5 1973 Financial Records RN & PN individual CA income tax form for 1973. 4pgs. 14 5 04/12/1974 Letter Copy of letter from Dean S. Butler to Franchise Tax Board RE RN &PN's taxes. 1pg. 14 5 04/12/1974 Other Document News release from Franchise Tax Board RE RN's taxes. 3pgs. Wednesday, October 07, 2009 Page 1 of 3 Box Number Folder Number Document Date Document Type Document Description 14 5 n.d. Financial Records RN & PN's income as nonresidents of CA. 1pg. 14 5 n.d. Financial Records RN & PN's income as nonresidents of CA. 1pg. 14 5 04/15/1974 Letter Letter from Dean S. Butler to Martin Huff RE RN's 1973 tax return. 1pg. 14 5 04/18/1974 Memo Memo from Skip Williams to Fred RE wanting to letter. 1pg. 14 5 04/15/1974 Letter Copy of letter from Dean S. Butler to Kenneth W. Gemmill RE RN's tax returns. 2pgs. 14 5 04/11/1974 Letter Copy of letter from Dean S. Butler to Martin Huff regarding RN & PN's taxes. 1pg. 14 5 04/11/1974 Letter Copy of letter from Martin Huff to Dean S. Butler RE RN & PN's taxes 1969-1972. 1pg. Wednesday, October 07, 2009 Page 2 of 3 Box Number Folder Number Document Date Document Type Document Description 14 5 04/10/1974 Letter Copy of letter from Martin Huff to Dean S. Butler regarding RN & PN's taxes. 2pgs. 14 5 04/10/1974 Financial Records "Notice of Additional Tax Proposed to be Assessed" for RN & PN's 1969 taxes. Includes carbon copy. 2pgs. 14 5 n.d. Financial Records RN & PN's income as nonresidents of CA, 1969-1972. 2pgs. Wednesday, October 07, 2009 Page 3 of 3 Mr x Mrs J.Y. Elmore in tends an emitation to visit their Rancho San Climente if it could work into your busy schedule - Either drive Through or of line allows we would put on a mactch race on the tract I y. Elniore / B. B. Cash LAW OFFICES WILLIS, BUTLER & SCHEIFLY ARTHUR B. WILLIS DEAN S. BUTLER 20TH FLOOR JOHN E. SCHEIFLY FRED L. LEYDORF CITY NATIONAL BANK BUILDING IRVING M. GRANT DUDLEY M. LANG 606 SOUTH OLIVE STREET JAMES F. CHILDS, JR. MICHAEL 1. BLAYLOCK JOHN J. BARCAL DAVID R. DECKER LOS ANGELES, CALIFORNIA 90014 STEVEN W. PHILLIPS CHARLES R AJALAT NEAL S. MILLARD DAVID L.CASE TELEPHONE (213) 620-1650 April 11, 1974 PERSONAL AND CONFIDENTIAL Mr. Fred Buzhardt The White House Washington, D. C. 20500 Dear Mr. Buzhardt: I am enclosing an original and two copies of a 1973 California Nonresident Individual Income Tax Return which we have prepared for President and Mrs. Nixon. We consider it to be of significant urgency that this return be filed timely, no later than April 15, 1974. Inasmuch as I have not been furnished with the appropriate power of attorney, it is necessary that both the President and Mrs. Nixon personally sign and date the return. For your convenience, I am enclosing a pre-addressed mailing envelope to the California Franchise Tax Board. I would appreciate your advising me of the date the return is signed and mailed so that I may conform my file copy. Yours sincerely, 10 an & Buth DEAN S. BUTLER DSB:cmn Enclosures P.S. In transmission it may be well to indicate that this was prepared on the basis of available information and may be subject to amendment if later developments reflect that additional information should be included. NONRESIDENT INDIVIDUAL TAXABLE 540NR CALIFORNIA 1973 PART-YR. RESIDENT INCOME TAX YEAR For the year January 1-December 31, 1973, or other taxable year beginning , 1973, ending , 197 FIRST NAME(S) AND INITIAL(S) LAST NAME Your Social Security Number Please RICHARD M. and PATRICIA R. NIXON 567 68 0515 Type PRESENT HOME ADDRESS (Number and street, including apartment number, or rural route) Spouse's Social Security Number or The White House Print CITY, TOWN OR POST OFFICE, STATE AND ZIP CODE OCCU- Yours President of the PATION Washington, D. C. 20500 Spouse's United States Filing Status-Check Only One Exemption Credits If line 1 or 3 checked, enter $25 6 50 1. Single 6. Personal Exemption: If line 2, 4 or 5 checked, enter $50 2. X Married filing joint return 7. Dependents-Do not list person who qualifies you as head of household. 3. Married filing separate return-Enter spouse's full Name (include last name and/or address if different from yours) Relationship name 4. Head of Household-Enter name of qualifying individual Total Number X $8 7 5. Widow(er) with dependent child. Enter year spouse 8. Blind (refer to instructions) Number of blind exemptions X $8 8 died 19 9. Total exemption credits (add lines 6, 7 and 8) Enter here and on line 21 below 9 50 Include income from all sources in Column "A". List all income while California resident plus all California income while a nonresident in Column "B" A. Total Income B. California Income 10. Wages, salaries, tips and other employee compensation if unavailable, attach explanation Attach copy of form(s) W-2 to front ) 10 250,000 31,507 11. Dividends-before federal exclusion. Capital gain dividends must be included at 100% 11 12. Interest. (See instructions for taxability of federal, state and municipal bonds) 12 ATTACH COPY 2 OF FORM W-2 HERE 13. Income other than wages, dividends and interest (from page 2, line 51) 13 (5,371) (5,371) 14. Total (add lines 10, 11, 12 and 13) 14 244,629 26,136 15. Adjustments to income (from page 2, line 57) 15 - - 16. Adjusted gross income (subtract line 15 from 14) 16 244,629 26,136 If active member of U.S. armed forces, check box and enter "100%" on lines 17 and 21. 17. Percentage of California income (line 16, column B ÷ column A). 12.60 % (100% maximum) 46/365 From page 2 $1,000 X % on line 17-if filing status 1 or 3 checked 18. Deductions: Itemized OR Standard 18 line 64 $2,000 X % on line 17-if filing status 2, 4 or 5 checked 32,102 19. Taxable income (subtract line 18 from line 16) Compute tax from Tax Rate Schedule-Enter tax on line 20 19 (5,966) 20. Tax from Tax Rate Schedule in instructions or Schedule G-1 (540) See instructions 20 None 21. Total exemption credits (from line 9, above) X % on line 17 21 22. Tax liability (subtract line 21 from line 20-if line 21 is greater than line 20, enter zero) 22 Your 23. "Other State" net income tax credit (attach copy of other state return and Schedule S(540)) 23 Tax 24. Net tax (subtract line 23 from line 22-if line 23 is greater than line 22, enter zero) 24 ATTACH FORM DE1964 HERE and 25. Special Tax Credit-from page 2, line 73 (see instructions, page 2, for allowable credit) 25 Write social security number on check or money order. ATTACH HERE Credits NOTE: You must have been a California resident on the last day of your taxable year to qualify. 26. Net tax liability (subtract line 25 from line 24-if line 25 is greater than line 24, enter zero) 26 27. Tax on preference income (see instructions-attach Schedule P(540)) 27 28. Total tax liability (add lines 26 and 27) 28 None Your 29. Renter's credit-if you lived in rented property in California on March 1, 1973, complete Part I on page 2 29 30. Total California income tax withheld (attach Form(s) W-2 to face of return) 30 Pre- 31. 1973 California estimated tax payments (include amount allowable as a credit from 1972 return) 31 payment 32. Excess California SDI tax withheld (attach Form DE 1964 to face of return). 32 Credits 33. Total prepayment credits (add lines 29 through 32) 33 34. If line 28 is equal to or larger than line 33, enter amount of BALANCE DUE 34 None Balance Pay in full and mail with return to: Franchise Tax Board, Sacramento, CA 95867 Do not write in these spaces Due 35. If line 33 is larger than line 28 enter amount OVERPAID 35 P or Mail return to: Franchise Tax Board, P.O. Box 13-540, Sacramento, CA 95813 E Refund 36. Amount of line 35 to be REFUNDED. (allow at least six weeks for your refund) 36 37. Amount of line 35 to be credited on your 1974 estimated tax 37 M Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief it is true, correct and complete. If prepared by a person other than taxpayer, his declaration is based on all information of which he has any knowledge. A SIGN Your signature Date Preparer's signature (other than Buth taxpayer) 4/11/74 Date HERE 606 ohne Coly Wife's signature-if filing a joint return Date Address (and Zip code) Preparer's Employer Identification (or SSA) Number 95-2105245 Page 2 FORM 540NR (1973) ANSWER THESE QUESTIONS: If nonresident during any part of your taxable year, of what state or country were you a resident? Washington, D. C. if part-year resident, enter date California residence was established and/or date California residence was terminated If full-year nonresident, check box X and enter number of months days you were in California during the taxable year 46 When absent from this State during the taxable year, did you maintain a home or other dwelling place, either owned or rented in California? Yes PART I-Renter's Credit-All questions must be answered See Instructions, Page 2, for Allowable Credit 38. Did you, on March 1, 1973, live in rented property in California which was your principal residence? Yes No If no, you may not claim this credit 39. Was the property you rented exempt from property tax? Yes No If yes, you may not claim this credit 40. Did you live with any other person who claimed you as a dependent for income tax purposes? Yes No If yes, you may not claim this credit 41. Did you or your spouse claim the homeowners' property tax exemption or receive public assistance? Yes No If yes, see page 2 of instructions PART II-Other Income A. Total Income B. California Income 42. Business income (or loss) (attach Schedule C(540)) 42 43. Net gain (or loss) from sale or exchange of capital assets (attach Schedule D(540)) 43 44. Net gain (or loss) from Supplemental schedule of Gains and Losses (attach Schedule D-1(540)) 44 45. Pensions and annuities 45 Attach 46. Rents and royalties 46 Schedule E (5,371) (5,371) 47. Partnerships 47 Form (540) 48. Estates and trusts 48 49. Farm income (or loss) (attach Schedule F(540)) 49 (a) Fully taxable pensions and annuities (not reported on Schedule E(540)) (a) 50. Miscel- income - (b) Alimony (b) laneous (c) Other (state nature and source) (c) (d) Enter total of lines 50(a), (b) and (c) 50 51. Total (add lines 42 through 50). Enter here and on page 1, line 13 51 (5,371) (5,371) PART III-Adjustments to Income 52. "Sick pay", if included in line 10 (see instructions-attach statement) 52 53. Moving expenses (see instructions-attach statement) 53 54. Employee business expenses (see instructions-attach statement) 54 55. Military exclusion (see instructions) 55 56. Payment as a self-employed person to a retirement P lan, etc. 56 57. Total adjustments (add lines 52 through 56). Enter here and on page 1, line 15 57 PART IV-Itemized Deductions- ON SEPARATE RETURNS OF MARRIED TAXPAYERS, BOTH MUST ITEMIZE DEDUCTIONS OR BOTH MUST TAKE THE STANDARD DEDUCTION. Attach Schedule A(540NR) and enter sub-totals on lines 58 through 63 below. 58. Total deductible medical and dental expenses (from Schedule A(540NR), line 10) 58 59. Total child adoption expenses (from Schedule A(540NR), line 13) 59 60. Total taxes (from Schedule A(540NR), line 21) 60 11,969 61. Total interest expense (from Schedule A(540NR), line 25) 61 19,833 62. Total contributions (from Schedule A(540NR), line 29) 62 300 63. Total miscellaneous deductions (from Schedule A(540NR), line 40) 63 64. Total itemized deductions (add lines 58 through 63). Enter here and on page 1, line 18 64 32,102 PART V-Special Tax Credit If you report gains from capital assets held more than one year on Schedule D (540), complete all lines below. All other taxpayers enter "Net Tax" from line 24 on line 72 and complete line 73. 65. Taxable income from page 1, line 19 65 66. Amount (if any) entered on Schedule D(540), line 14 66 67. Amount (if any) entered on Schedule D(540), line 15 67 68. Combine lines 66 and 67 and enter total here. If zero or a loss, enter zero 68 69. Adjusted taxable income (subtract line 68 from line 65) 69 70. Adjusted tax from Tax Rate Schedule in instructions 70 71. Add lines 21 and 23, page 1, and enter total here 71 72. Adjusted net tax (subtract line 71 from line 70) 72 73. Special Tax Credit-Determine allowable credit using Table on page 2 of instructions. Enter here and on page 1, line 25. NOTE: You must have been a California resident on the last day of your taxable year to qualify. 73 13739-400 5-73 1,300M 1 OSP SCHEDULE TAXABLE CALIFORNIA A 19 73 ITEMIZED DEDUCTIONS FORM 540NR YEAR Attach to Form 540NR Name as shown on Form 540NR Social Security Number RICHARD M. and PATRICIA R. NIXON 567 68 0515 During the period of nonresidence no deduction may be taken which is attributable to property or business located outside of California, alimony is not deductible, and all other deductions must be directly related to California income. See separate instructions for limitations on allowance of specific deductions. MEDICAL AND DENTAL EXPENSE (not compensated by insurance or otherwise) for INTEREST EXPENSE A. Total B. California medicine and drugs, doctors, dentists, nurses, hospital care, insurance premiums for medical care, etc. 22. Home mortgage 19,833 19,833 A. Total B. California 23. Installment purchases 1. One-half (but not more than $150) of insurance premiums for medical 24. Other (itemize) care 2. Total cost of medicine and drugs 3. Enter 1% of adjusted gross income shown on Form 540NR 4. Subtract line 3 from line 2 (if less 25. Total. Enter total of col. B on than zero, enter zero) Form 540NR, page 2 19,833 19,833 5. Enter balance of insurance premi- ums for medical care not entered CONTRIBUTIONS on line 1 26. Cash contributions for which you 6. Other medical, dental expenses: have receipts, canceled checks, etc. 300 300 (a) Doctors, Dentists, etc. 27. Other cash contributions. List donees (b) Hospitals and amounts (c) Other (itemize) 28. Other than cash (see instructions 7. Total (add lines 4, 5, 6(a), (b) and for required statement) (c)). 29. Total (Add lines 26, 27 and 28- maximum deduction may not exceed 8. Enter 3% of adjusted gross income 20% of adjusted gross income). shown on Form 540NR Enter total of col. B on Form 540- NR, page 2 300 300 9. Subtract line 8 from line 7 (if less than zero, enter zero) MISCELLANEOUS DEDUCTIONS 10. Total (add lines 1 and 9). Enter total Casualty or Theft Loss(es) of col. B on Form 540NR, page 2 NOTE: If you had more than one loss CHILD ADOPTION EXPENSE omit lines 30 through 34 and follow instructions for guidance. 11. Total expense paid or incurred 30. Loss before insurance reimburse- (Attach itemized list) ment 12. Enter 3% of adjusted gross income 31. Insurance reimbursement shown on Form 540NR 32. Subtract line 31 from line 30 13. Subtract line 12 from line 11 (See 33. Enter the smaller of $100 or line instructions for maximum limita- 32 tions). Enter total of col. B on Form 540NR, page 2 34. Casualty or theft loss (line 32 less line 33) TAXES (See tables in instructions) 35. Alimony paid 14. Real estate 11,969 11,969 36. Child Care-See instructions 15. State and local gasoline 37. Employment education expense 16. General sales 38. Union dues 17. Auto license (excess of registration 39. Other-See instructions-itemize and weight fees) 18. Personal property 19. State disability insurance (SDI). Em- ployer private disability plans do not qualify 20. Other 40. Total (Add lines 34, 35, 36, 37, 38 and 39). Enter total of col. B on 21. Total taxes. Enter total of col. B on Form 540NR, page 2 11,969 11,969 Form 540NR, page 2 (Rev. 1973) SCHEDULE TAXABLE E CALIFORNIA 19 73 FORM 540 SUPPLEMENTAL INCOME YEAR Attach to Form 540 or 540NR Name as shown on Form 540 or 540NR Social Security Number RICHARD M. and PATRICIA R. NIXON 567 68 0515 Part I.-PENSION AND ANNUITY INCOME. If fully taxable, do not complete this part. Enter amount on page 2 of Form 540 or 540NR, under Miscellaneous Income. For each pension or annuity not fully taxable, attach a separate Part I and enter combined total of taxable portions on line 4. If first payment was received PRIOR to 1968, see Schedule E Instructions for amount of taxable income to be reported. Name of payer: Date first payment received: 1. Did your employer contribute part of the cost? YES NO If "YES," is your contribution recoverable within 3 years of the annuity starting date? YES NO If "YES," show: Your contribution $ Your contribution recovered in prior years $ , 2. Amount received this year 3. Amount excludable this year 4. Taxable portion (subtract line 3 from line 2). Enter on Form 540 or Form 540NR in space provided Part II.-RENT AND ROYALTY INCOME. If you need more space, you may use Federal Form 4831. Note: If you are reporting farm rental income here that is based on crops or livestock produced by a tenant farmer but you did not materially participate in the operation of the farm, see Schedule E Instructions, to determine if you should also file Federal Form 4835. (d). Depreciation (a). Kind and location of property (b). Total amount (c). Total amount (explain in Part IV) (e). Other expenses of rents of royalties or depletion (attach (explain in Part V) computation) Whittier House 600 5,971 1. Totals 600 5,971 2. Net income (or loss) (col. (b) plus col. (c), less cols. (d) and (e)). Enter on Form 540 or 540NR in space provided (5,371) Part III.-INCOME OR LOSSES FROM PARTNERSHIPS AND ESTATES OR TRUSTS. If any of the partnership, estate or trust income reported below is from farming, see Schedule E Instructions, to determine if you should also file Federal Form 4835. (a). Name and address (b). Federal employer no. (c). Partnerships (d). Estates or trusts Totals-(Enter total of each column on Form 540 or 540NR in spaces provided) Part IV.-SCHEDULE FOR DEPRECIATION CLAIMED IN PART II ABOVE. Note: Depreciation may be computed by using the Asset Guideline Classes specified in Federal Revenue Procedure 72-10, regardless of when the assets were placed in service. If this method is used, do NOT use the Lower Limit or the Upper Limit (ADR) Ranges. Attach detailed statement of depreciation computation. (a). Group and guideline class (b). Date (c). Cost or (d). Depreciation (e). Method of or description of property other basis allowed or allowable computing (f). Life or (g). Depreciation acquired rate in prior years depreciation for this year 1. Total additional first-year depreciation (do not include in items below) 2. Asset Guideline Class System (See note above) 3. Other depreciation 4. Totals Sum of the Units of SUMMARY Straight line Declining balance production Other (specify) Total years-digits 5. Line 2 above 6. Other Part V.-EXPLANATION OF COLUMN (e), PART II Item Amount Item Amount Item Amount (Rev. 1973) See instructions on reverse April 12. 1974 Franchise Tax Board State of California 1025 P Street Sacramento, California 95814 Re: Richard M. and Patricia R. Nixon Rev. Code 3432300:JM:VM Gentlemen: In accordance with the authority granted to me in a Power of Attorney from the above designated taxpayers and previously filed with your office, I hereby authorize the disclosure by your office of a fact that a notice of additional tax proposed to be assessed has been issued to the taxpayers, and that you have been advised that the adjustments and the resulting tax for the calendar year 1969 and the tax and penalty for the calendar year 1970 have been approved and accepted by the taxpayers, and that the taxpayers' representative has indicated that appropriate returns and payments of tax owing will be promptly pre- sented. You are also authorized to disclose any of the details of the adjustments which you feel are appropriate. Yours very truly, DEAN S. BUTLER DSB:bws st Ahe applies equally to the 197181972 Dis NEWS RELEASE FROM: Franchise Tax Board Sacramento, CA 95867 FOR IMMEDIATE RELEASE Phone: Martin Huff, (916) 445-0408 We have now determined the amount of tax due to the State of California from income derived from sources within this state by Richard M. and Patricia Nixon during the years 1969 through 1972. In determining California source income, the President's salary and allowances for the years under review and the income attributed to him by the Joint Committee on Internal Revenue Taxation for the personal use of government airplanes was apportioned to the State of California on the basis which the time spent in this state bears to the time during which the income was earned. In addition to the income apportioned to the state certain other items of income are considered to have their source in this state. These items consist of residual compensation in the amount of $11.00 received in 1969. This incidental income was paid because of a California television appearance. Income realized because of improvements to the San Clemente property were attributed to California. Such amounts were considered to constitute California source income because they are uniquely related to the performance of service as President while in California. The income received from his mother's estate is California source income, as is the gain on the sale of part of the property located at San Clemente. Royalties from the book "Six Crises" which was written while Mr. and Mrs. Nixon were residents of the state is also California income. The income determined was reduced in order to reflect losses from the rental property located at Whittier, California. 74-1-549 -more- 4-12-74 - 2 - Itemized deductions were allowed for contributions made to educational and charitable organizations located in this state. When appropriate, charitable contributions were limited to 20% of adjusted income. An interest deduction was allowed for interest paid to purchase real property in this state. A tax deduction was also allowed tax paid on real property located in this state, and for sales and California gasoline taxes, and for that part of truck registration fees which constitute the in lieu tax. Following is a summary of the key figures in the determination: A detailed schedule is attached. 1969 1970 1971 1972 Adjusted Gross Income $66,140 $116,317 $37,187 $18,015 Allowable Deductions 10,587 106,773 68,819 56,523 Taxable Income (Loss) 55,553 9,544 (31,632) (38,508) Tax $ 4,107 $ 156 $ - $ - A penalty of 25% for failure to file a timely return for 1969 was included in the proposed assessment and was subsequently withdrawn upon satisfactory showing of reasonable cause as required by Section 18681 (R&TC) A penalty of 25% for failure to file a timely return for 1970 was imposed because of the receipt of California source income in excess of $6,500. The report of the Joint Committee on Internal Revenue Taxation was made available to us the day after it was issued. The taxpayers and their representative have extended the fullest possible cooperation and assistance in this matter. In addition 74-1-549 -more- 4-12-74 - 3 - all requests for additional information with respect to California source income and the California income tax liability has been furnished promptly. We have been advised by counsel to the taxpayers that tax returns will be prepared in accordance with our determination and a remittance liquidating the liability will be remitted promptly. $ # # 74-1-549 4-12-74 Richard M. and Patricia Nixon Income as Nonresidents of California Calendar Years 1969 1970 1971 1972 Regular Tax $4,115.30 $176.32 - - Minimum Tax (5) - - - - Total tax before credits 4,115.30 176.32 - - Credit for personal exemptions (6) 8.26 19.64 - - Tax 4,107.04 156.68 - - Penalty ($18681-failure to file-25%) - 39.17 - - TOTAL TAX & PENALTIES $4,107.04 $ 195.85 - - (1) Interest received United Calif. Bank not taxable by Calif. under Reg. 17951-17954(f) (2) (2) Royalty income from book "Six Crises" written in Calif. (3) Contribution of royalty income to the Nixon Foundation - a charitable/educational Calif. organization. (4) Interest expense paid Alplanalp limited to $400,000 invested in property or $400,000 at 8% 7/11/69 - 12/15/70 for a total of $45,335. Year Amount Ratio Deduction 1970 $15,000 45,335/ $11,955 56,883 1971 15,000 " 11,955 1972 26,883 " 21,425 $56,883 $45,335 (5) Minimum tax - the California tax on preference items did not become effective until 1971 The only preference deduction after 1971 was investment interest which did not exceed the $30,000 exemption. (6) Exemption Credit 1969 $58.00 X 66,140/464,235 = $ 8.26 1970 58.00 X 116,317/343,427 = $19.64 2. Richard M. and Patricia Nixon Income as Nonresidents of California Calendar Years 1969 1970 1971 1972 Regular Tax $4,115.30 $ 176.32 - - Minimum Tax (5) - - - - Total tax before credits 4,115.30 176.32 - - Credit for personal exemptions (6) 8.26 19.64 - - Tax 4,107.04 156.68 - - Penalty ($18681-failure to file-25%) - 39.17 - - TOTAL TAX & PENALTIES $4,107.04 $195.85 - - (1) Interest received United Calif. Bank not taxable by Calif. under Reg. 17951-17954 (f) (2). (2) Royalty income from book "Six Crises" written in Calif. (3) Contribution of royalty income to the Nixon Foundation - a charitable/educational Calif. organization. (4) Interest expense paid Alplanalp limited to $400,000 invested in property or $400,000 at 8% 7/11/69 - 12/15/70 for a total of $45,335. Year Amount Ratio Deduction 1970 $15,000 45,335/ $11,955 56,883 1971 15,000 " 11,955 1972 26,883 " 21,425 $56,883 $45,335 (5) Minimum tax - the California tax on preference items did not become effective until 1971 The only preference deduction after 1971 was investment interest which did not exceed the $30,000 exemption. (6) Exemption Credit 1969 $58.00 X 66,140/464,235 = $ 8.26 1970 58.00 X 116,317/343,427 If $19.64 2. April 15, 1974 Mr. Martin Huff Executive Director P.O. Box 1468 Sacramento, California 95807 Dear Mr. Huff: As previously discussed, I am enclosing non-resident tax return for 1973 for Richard M. and Patricia R. Nixon. As you know, this return has been signed by me acting under Power of Attorney authorizing this action. You are also advised that this return is prepared on the basis of facts and circumstances known to us at this time. In light of the fact that there were some adjustments in earlier years, we recognize the possibility that later adjustments may require some amendment. We do not, however, anticipate that any adjustments would result in any taxable income or taxes for this year. I am enclosing a copy of the Power of Attorney under which I acted in the execution of this return. You are also advised that pursuant to the authority granted in this Power of Attorney, we expressly waive the restrictions on disclosure with regard to the fact that these taxpayers have, in fact, filed tax returns in any and all years through 1973. If there are any questions in any of these matters, please let us know. Sincerely, DEAN S. BUTLER DSB:bws Enclosures THE WHITE HOUSE WASHINGTON 4-18-74 Memorandum For: Fred From: Skip Williams You said you wanted to see this. LAW OFFICES WILLIS, BUTLER & SCHEIFLY ARTHUR B. WILLIS DEAN S. BUTLER 20TH FLOOR JOHN E. SCHEIFLY FRED L. LEYDORF CITY NATIONAL BANK BUILDING IRVING M. GRANT DUDLEY M. LANG JAMES F. CHILDS, JR. MICHAEL 1. BLAYLOCK 606 SOUTH OLIVE STREET JOHN J. BARCAL DAVID R. DECKER LOS ANGELES, CALIFORNIA 90014 STEVEN W. PHILLIPS CHARLES R.AJALAT NEAL S. MILLARD DAVID .CASE TELEPHONE (213) 620-1650 April 15, 1974 Mr. Kenneth W. Gemmill Dechert, Price & Rhoads 1600 Three Penn Center Philadelphia, Pennsylvania 19102 Dear Ken: In order to complete your files on the President's California income tax problems, I am enclosing a substantial package of correspondence. If you care to wade through all of the dialogue, you will find that the Franchise Tax Board has issued a Notice of Proposed Assessment reflecting taxes as nonresidents amounting to $4, 107. for the year 1969 and $156.68 plus a penalty of $39. 17 for the year 1970, and no taxes owing for the years 1971 and 1972. It also discloses that portions of the IRS report having to do with the calculation of Federal taxes have been returned to me and, accordingly, are not now included in the files of the Franchise Tax Board which have been subpoenaed by an Assembly investigating committee. Finally, the corre- spondence indicates that acting under the power of attorney which I had, I have indicated that the proposed assessment will not be protested and it is contemplated that returns for the prior years will be filed in accordance with the report and that the amounts owing will be paid. I also include in that letter a Waiver of Disclosure which resulted in a press conference held by Mr. Huff, of which a copy is also enclosed. As you know, I did have some difficulty in accepting the procedures of the Franchise Tax Board as I felt there were some areas of inaccuracy. At your instruction, however, I did accept these findings. As it turns out, I suspect that it was an overall desirable result. I know that Mr. Huff was concerned with his political problems if they concluded that there was only a few hundred dollars owing for all years. The amount that they finally reached is sufficiently substantial to lend dignity to their efforts and, at the same time, it is sufficiently acceptable from our point of view. From what I can tell, public reaction to the press release seems to be sympathetic with the President. As a matter of fact, a more recent release indicates that the State of New York is now reviewing their files on the sale of the apartment and I seem to detect a general reaction that everyone is now WILLIS, BUTLER & SCHEIFLY Mr. Kenneth W. Gemmill April 15, 1974 Page Two involved in a little overkill. In other words, the tide of sympathy does seem to have switched. Also, as we discussed, I did disclose to the press that the President and Mrs. Nixon had filed tax returns in the State of California for the years 1946 through 1963. I have not seen or heard a great deal in the media on this point, but they now have the information at least. I also received today the new power of attorney which authorizes me to sign income tax returns on behalf of the President and Mrs. Nixon and, further, to waive the confidentiality relative to the returns filed in prior years. I talked today to Fred Buzhardt and it was agreed that I will sign the 1973 Nonresident Tax Return and, when appropriate, will sign the returns for 1969 through 1972. As you will note from the attached copy of the 1973 return, there is no tax owing. In transmitting this return, however, I have noted that this is based upon information currently available and could require amendment if there is any further determination of additional income along the lines of the Joint Committee determination. I understand that we should not anticipate any substantial additional income as the San Clemente and Key Biscayne improve- ments were in earlier years and I also gather that there was substantially less airplane travel by the family in 1973. I am sending copies of this letter and the enclosures to Fred Buzhardt and Arthur Blech. I am enclosing the original Notice of Action and Notice of Assessment with Fred Buzhardt's package so that he may see that they are placed in the President's files. Incidentally, in discussion with Arthur Blech it was agreed today that he will sign all of these tax returns as the preparer in order that there are not any further questions generated regarding his status. As soon as we have finished with a little additional housekeeping and manage to get the press out of the way, it would appear that we can close our files on this matter. Although I would suspect that we may be sending some additional correspondence, I would like to say at this time it has been a pleasure to have worked with you. Obviously, we would all like to have had more favorable results in several respects but more importantly perhaps we can hope that it is essentially a closed issue. Thank you again for all your help and consideration. Yours sincerely, DEAN S. BUTLER DSB:cmn Enclosures cc: Mr. Fred Buzhardt Mr. Arthur Blech LAW OFFICES WILLIS, BUTLER & SCHEIFLY ARTHUR B. WILLIS DEAN S. BUTLER 20TH FLOOR JOHN E. SCHEIFLY FRED L. LEYDORF CITY NATIONAL BANK BUILDING IRVING M. GRANT DUDLEY M. LANG 606 SOUTH OLIVE STREET JAMES F. CHILDS, JR. MICHAEL 1. BLAYLOCK JOHN J. BARCAL DAVID R. DECKER LOS ANGELES, CALIFORNIA 90014 STEVEN W. PHILLIPS CHARLES .AJALAT NEAL S. MILLARD DAVID L.CASE TELEPHONE (213) 620-1650 April 11, 1974 PERSONAL AND CONFIDENTIAL Mr. Martin Huff Executive Officer California Franchise Tax Board 1025 "P" Street Sacramento, California 95814 Re: Richard M. and Patricia R. Nixon Dear Mr. Huff: As required by Section 18451, I forwarded to you on April 9, 1974, Income Tax Audit Changes for the above taxpayers for the years 1969 through 1972. In my haste to furnish you Tax Audit Changes I find that I inadvertently included information which does not relate to the amount of gross income or deductions as changed or corrected by the Internal Revenue Service. Since this information is not necessary to your determination, not required to be furnished under the provisions of the California Income Tax Law, and as I may have exceeded the powers granted me, I request that you return information not required for your determination. The material I refer to is that portion of the Income Tax Audit Changes relating to the computations of Federal liability. Specifically, I refer to all items after Line 2 on Page 1, and Page 3, for all years. For the years 1970 through 1972, Pages 4 through 8 and Pages 35 through 39. Sincerely, Have A BATT DEAN S. BUTLER DSB:cmn STATE OF CALIFORNIA FRANCHISE TAX BOARD SACRAMENTO, CALIFORNIA 95867 April 11, 1974 Mr. Dean Butler Willis, Butler & Scheifly 606 South Olive, 20th Floor Los Angeles, CA 90014 Richard M. and Patricia R. Nixon, Years 1969-72 We are in receipt of your letter requesting that I return to you non- essential portions of the Income Tax Audit Changes made by the Internal Revenue Service with respect to the above taxpayers. Upon review, we find that the parts of the report that you requested be returned are not required to be submitted and are not necessary for our determination of the above taxpayers' state income tax liability. Accordingly, enclosed are the portions of the five sets of reports you have requested be returned. Martin Huff Executive Officer Enc. Supervised STATE OF CALIFORNIA FRANCHISE TAX BOARD SACRAMENTO, CALIFORNIA 95867 April 10, 1974 Mr. Dean Butler Willis, Butler & Schiefly 606 South Olive, 20th Floor Los Angeles, CA 90014 Richard M. and Patricia R. Nixon Enclosed are notices of proposed assessments for the tax- able years 1969 and 1970. Also attached is a schedule re- flecting income and deductions for the years 1969 through 1972. The schedule reflects income we have determined as being attributable to California source based upon the re- port prepared by the Joint Committee on Internal Revenue Taxation. In determining income from California sources, the Presi- dent's salary and allowances and that income realized from the personal use of government airplanes was apportioned to California upon the ratio which the total number of days spent in the state bears to the total number of days during which compensation was earned. Other items of income are attributed to the state. These include residual compensa- tion in the amount of $11.00 from a prior television appear- ance, income from his mother's estate for the year 1969, and gain on the sale of the San Clemente real property. Cali- fornia source income also includes royalties from the book "Six Crises" which was written while Mr. and Mrs. Nixon were California residents. It has also been determined that in- come resulting from the improvements to the property located at San Clemente, California is uniquely related to the per- formance of services within the state and as such is attrib- utable to California. A deduction has been allowed for the losses on the rental property located at Whittier, California. The itemized deductions provided are those allowed nonresidents by Sec- tions 17301, 17302, and 17303 of the Revenue and Taxation Mr. Dean Butler April 10, 1974 Page 2 Code. A charitable contribution deduction was allowed for contributions made to California charities. A deduction was allowed for taxes paid on real property located in this state. A sales tax deduction was allowed based upon in- formation you furnished and tax tables, the deduction for gasoline taxes and the automobile in-lieu license tax was based upon schedules prepared by the Joint Committee. In addition to the tax, a 25% penalty is imposed under the provisions of Section 18681 of the Revenue and Taxation Code. This penalty is for failure to file a timely return. Section 18401 (b) and (c) of the Revenue and Taxation Code requires an individual to file a return if his adjusted gross income is over $6,500, if married, or his gross in- come is over $7,000 regardless of the amount of adjusted gross income. Under these provisions, a return is required for all years included in the schedule. WILL Martin Huff Executive Officer Enclosures OF STATE OF CALIFORNIA NOTICE OF ADDITIONAL TAX FRANCHISE TAX BOARD PROPOSED TO BE ASSESSED SACRAMENTO, CALIFORNIA 95867 03207791 Date April 10, 1974 2 RICHARD M. AND PATRICIA R. NIXON Income year The White House Taxable year 1969 Washington, D.C. 20500 Serial No. Amount $ 5,133.80 Ind. Code 567680515 Rev. Code 3432300: JM: In accordance with the provisions of the Revenue and Taxation Code, notice is hereby given that a deficiency is proposed to be assessed for the taxable year and in the amount shown above. Details of the proposed assessment are set forth below. Taxable Income $55,553.00 Total tax 4,115.30 Credit for personal exemptions (6) 8.26 Tax 4,107.04 Penalty, Section 18681, failure to file return, 25% 1,026.76 Total tax and penalties 5,133.80 Income from California sources as determined from the report of the Joint Committee on Internal Revenue Taxation, plus royalty income from prior California services. See attached schedule. cc: Dean S. Butler City National Bank Building 606 S. Olive Street, 20th Floor Los Angeles, CA 90014 IF YOU AGREE to the proposed assessment you should promptly remit the IF YOU DO NOT AGREE to the proposed assessment you may file a protest amount of additional liability plus interest at six percent a year on the with the Franchise Tax Board within 60 days of the date of this notice (see amount of additional tax from the original due date of the return to the the reverse side of this form). Otherwise, this proposed deficiency assessment date of payment, unless specified differently above. (The amount of interest, will become final at the expiration of the 60-day period. if included above, is computed only to the date indicated.) The remittance should be made payable to the FRANCHISE TAX BOARD. FTB 5830 (1.72) 59778-400 1-72 75M SEXT 1 OSP STATE OF CALIFORNIA NOTICE OF ADDITIONAL TAX FRANCHISE TAX BOARD PROPOSED TO BE ASSESSED SACRAMENTO, CALIFORNIA 95867 CALIFORNIA 03207791 Date April 10, 1974 2 RICHARD M. AND PATRICIA R. NIXON Income year The White House Taxable year 1969 Washington, D.C. 20500 Serial No. Amount $ 5,133.80 Ind. Code 567680515 Rev. Code 3432300:JM:VM In accordance with the provisions of the Revenue and Taxation Code, notice is hereby given that a deficiency is proposed to be assessed for the taxable year and in the amount shown above. Details of the proposed assessment are set forth below. Taxable Income $55,553.00 Total tax 4,115.30 Credit for personal exemptions (6) 8.26 Tax 4,107.04 Penalty, Section 18681, failure to file return, 25% 1,026.76 Total tax and penalties 5,133.80 Income from California sources as determined from the report of the Joint Committee on Internal Revenue Taxation, plus royalty income from prior California services. See attached schedule. cc: Dean S. Butler City National Bank Building 606 S. Olive Street, 20th Floor Los Angeles, CA 90014 REMITTANCE TRANSMITTAL COPY This copy is for your convenience when forwarding your remittance. Interest should be included at six percent a year on the amount of additional tax from the original due date of the return to the date of payment unless specified differently above. The remittance should be made payable to the FRANCHISE TAX BOARD. FTB 5830 (1.72) 59778-400 1-72 75M SEXT 4 OSP Richard M. and Patricia Nixon Income as Nonresidents of California Calendar Years 1969 1970 1971 1972 Income Apportionable income Presidential salary & allowance $236,459 $250,000 $250,000 $250,000 Personal use of gov't. airplanes 4,001 9,276 4,636 9,102 Total 240,460 259,276 254,636 259,102 Less business expenses - - - - Total to be apportioned 240,460 259,276 254,636 259,102 Apportionment formula 39/345 55/365 51/365 34/366 Income apportioned to Calif. $ 27,171 $ 39,072 $ 35,572 $ 24,072 California income Residual compensation 11 Interest (1) - - - - Improvements to San Clemente 43,625 15,635 6,963 391 Income Mother's Estate 322 Whittier rental (5,699) (6,188) (5,715) (6,448) Gain on sale of San Clemente property (50% NLTCG) 58,918 Royalty income (2) 710 8,880 367 - ADJUSTED GROSS INCOME $ 66,140 $116,317 $ 37,187 $ 18,015 Deductions California contributions UCLA Alumni Ass'n $ 100 Whittier College $ 500 $ 100 Nixon Foundation (3) 10,385 E. Whittier Friends Church 250 1,000 E. Whittier YMCA 250 So. Calif. School Theology 200 Total 750 350 11,485 200 a Excess over 20% of AGI - - ( 3,998) - Allowable deduction $ 750 $ 350 7,437 $ 200 California interest expense Elmore $ 6,000 Ogden 75,000 $ 38,045 $ 17,437 Abplanalp (4) 11,955 11,955 21,425 Total - $ 92,955 $ 50,000 $ 38,862 California taxes Real property - San Clemente $ 7,561 $ 12,953 $ 11,346 $ 17,402 California sales tax 2,256 486 I I California gas tax 20 9 17 59 License tags - net 20 19 Total 9,837 13,468 11,382 17,461 Total deductions 10,587 106,773 68,819 56,523 TAXABLE INCOME (LOSS) $ 55,553 $ 9,544 ($ 31,632) ($ 38,508) Richard M. and Patricia Nixon Income as Nonresidents of California Calendar Years 1969 1970 1971 1972 Regular Tax $4,115.30 $176.32 - - Minimum Tax (5) - - - - Total tax before credits 4,115.30 176.32 - - Credit for personal exemptions (6) 8.26 19.64 - - Tax 4,107.04 156.68 - - Penalty ($18681-failure to file-25%) 1,026.76 39.17 - - TOTAL TAX & PENALTIES $5,133.80 $ 195.85 - - (1) Interest received United Calif. Bank not taxable by Calif. under Reg. 17951-17954(f) (2). (2) Royalty income from book "Six Crises" written in Calif. (3) Contribution of royalty income to the Nixon Foundation - a charitable/educational Calif. organization. (4) Interest expense paid Alplanalp limited to $400,000 invested in property or $400,000 at 8% 7/11/69 - 12/15/70 for a total of $45,335. Year Amount Ratio Deduction 1970 $15,000 45,335/ $11,955 56,883 1971 15,000 " 11,955 1972 26,883 " 21,425 $56,883 $45,335 (5) Minimum tax - the California tax on preference items did not become effective until 1971. The only preference deduction after 1971 was investment interest which did not exceed the $30,000 exemption. (6) Exemption Credit 1969 $58.00 X 66,140/464,235 Oh = $ 8.26 1970 58.00 X 116,317/343,427 = $19.64 2.