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HomeMy WebLinkAboutDeclaration of Scott Edwards and Exhibits1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 125110.0002/8346956.1 DECLARATION OF SCOTT M. EDWARDS - 1 LANE POWELL PC 1420 FIFTH AVENUE, SUITE 4200 P.O. BOX 91302 SEATTLE, WA 98111-9402 206.223.7000 FAX: 206.223.7107 BEFORE THE HEARING EXAMINER OF THE CITY OF RENTON RE: TracFone Wireless, Inc. Administrative Appeal DECLARATION OF SCOTT M. EDWARDS IN SUPPORT OF TRACFONE’S DISPOSITIVE AND PRE-HEAIRNG MOTIONS I, Scott M. Edwards, declare as follows: 1. I am one of the attorneys for appellant TracFone Wireless, Inc.(“TracFone”), and make the following statements based upon my personal knowledge. 2. Attached as Exhibits 1-3 are true and correct copies of documents marked as Exhibits 1-3 at the Deposition of Michael Crisp in this matter, Tax Recovery Services, LLC’s (“TRS”) Professional Services Agreement with the City of Renton (“City) and amendment nos. 1 and 4 respectively. 3. Attached as Exhibit 5 is a true and correct copy of Exhibit 5 from the Michael Crisp deposition, an email dated June 5, 2013 from TRS to the City. 4. Attached as Exhibit 6 is a true and correct copy of Exhibit 6 from the Michael Crisp deposition, TRS’s July 5, 2013 update to the City. 5. Attached as Exhibit 7 is a true and correct copy of Exhibit 7 from the Michael Crisp deposition, an email string between TRS and the City dated June 13, 2013. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 125110.0002/8346956.1 DECLARATION OF SCOTT M. EDWARDS - 2 LANE POWELL PC 1420 FIFTH AVENUE, SUITE 4200 P.O. BOX 91302 SEATTLE, WA 98111-9402 206.223.7000 FAX: 206.223.7107 6. Attached as Exhibit 8 is a true and correct copy of Exhibit 8 from the Michael Crisp deposition, a letter dated February 21, 2014 from the City to TracFone. 7. Attached as Exhibit 12 is a true and correct copy of Exhibit 12 from the Michael Crisp deposition, an email dated June 30, 2017 from TRS to the City with the attached draft audit schedules and Methodology. 8. Attached as Exhibit 16 is a true and correct copy of Exhibit 16 from the Michael Crisp deposition, an email string ending August 8, 2017 between TRS and the City with the attached revised draft audit schedules and Methodology. 9. Attached as Exhibit 17 is a true and correct copy of Exhibit 17 from the Michael Crisp deposition, an email dated August 10, 2017 from the City to TRS. 10. Attached as Exhibit 18 is a true and correct copy of Exhibit 18 from the Michael Crisp deposition, an email dated September 21, 2017 from the TRS to the City. 11. Attached as Exhibit 21 is a true and correct copy of Exhibit 20 from the Michael Crisp deposition, TRS’s November 6, 2017 update to the City. 12. Attached as Exhibit 22 is a true and correct copy of Exhibit 22 from the Michael Crisp deposition, TRS’s December 6, 2017 update to the City. 13. Attached as Exhibit 23 is a true and correct copy of Exhibit 23 from the Michael Crisp deposition, TRS’s January 5, 2018 update to the City. 14. Attached as Exhibit 25 is a true and correct copy of Exhibit 25 from the Michael Crisp deposition, TRS’s April 6, 2018 update to the City. 15. Attached as Exhibit 26 hereto is a true and correct copy of Exhibit 26 from the Michael Crisp deposition, TRS’s May 4, 2018 update to the City. 16. Attached as Exhibit 32 is a true and correct copy of Exhibit 32 from the Michael Crisp deposition, TRS’s October 5, 2018 update to the City. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 125110.0002/8346956.1 DECLARATION OF SCOTT M. EDWARDS - 3 LANE POWELL PC 1420 FIFTH AVENUE, SUITE 4200 P.O. BOX 91302 SEATTLE, WA 98111-9402 206.223.7000 FAX: 206.223.7107 17. Attached as Exhibit 33 is a true and correct copy of Exhibit 33 from the Michael Crisp deposition, TRS’s November 5, 2018 update to the City. 18. Attached as Exhibit 35 is a true and correct copy of Exhibit 35 from the Michael Crisp deposition, an email dated December 6, 2017, from TRS to the City attaching the document titled “TracFone3MethodologyA.doc.” 19. Attached as Exhibit 36 is a true and correct copy of Exhibit 36 from the Michael Crisp deposition, an email dated December 28, 2018, from TRS to the City attaching the document titled “TracFone Recommendation to City of Renton.doc.” 20. Attached as Exhibit 38 is a true and correct copy of Exhibit 38 from the Michael Crisp deposition, an email dated February 6, 2019, from TRS to the City attaching the document titled “TracFone Recommendation to City of Renton-1.doc.” 21. Attached as Exhibit 39 is a true and correct copy of Exhibit 39 from the Michael Crisp deposition, an email dated February 7, 2019 from the City to TracFone. 22. Attached as Exhibit 40 is a true and correct copy of Exhibit 40 from the Michael Crisp deposition, TRS’s February 14, 2019 assessment. 23. Attached as Exhibit 42 is a true and correct copy of Exhibit 42 from the Michael Crisp deposition, TRS’s June 5, 2019 update to the City. 24. Attached as Exhibit 63 is a true and correct copy of Exhibit 63 from the Tamara Crisp deposition, a Word document produced by TRS on December 10, 2020 titled “TracFone TRS Renton Emails All.doc.” 25. Attached as Exhibit 101 are copies of relevant pages from the transcript of the deposition of Michael Crisp. 26. Attached as Exhibit 102 are copies of relevant pages from the transcript of the deposition of Tamara Crisp. 27. Attached as Exhibit 110 is a copy of an email dated September 21, 2017 from the City to TRS produced by the City as part of the audit file. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 125110.0002/8346956.1 DECLARATION OF SCOTT M. EDWARDS - 4 LANE POWELL PC 1420 FIFTH AVENUE, SUITE 4200 P.O. BOX 91302 SEATTLE, WA 98111-9402 206.223.7000 FAX: 206.223.7107 28. Attached as Exhibit 111 is a copy of an email from counsel for the City dated May 4, 2020 transmitting part of the audit file in this matter. 29. Attached as Exhibit 112 is a copy of an email from counsel for the City dated June 30, 2020 transmitting part of the audit file in this matter. 30. Attached as Exhibit 113 is a copy of an email from counsel for the City dated, July 31, 2020 transmitting a part of the audit file labeled the “Second Batch.” 31. Attached as Exhibit 114 is copy of an email dated January 13, 2021, from TracFone’s counsel to the TRS and the City’s counsel identifying remaining deficiencies in the production of the audit file. 32. Attached as Exhibit 115 is a copy of a PDF document produced by TRS on January 22, 2021 with 102 pages emails not previously produced, titled “TracFone TRS Renton More Emails 1-17-21.pdf.” 33. Attached as Exhibit 116 is a copy of the City’s October 17, 2019, final determination that the February 14, 2019 assessment was correct. I declare under penalty of perjury under the laws of the United States and the laws of the State of Washington the foregoing is true and correct to the best of my knowledge. EXECUTED at Seattle, Washington, this 29th day of January 2021. _______________________ Scott M. Edwards 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 125110.0002/8346956.1 DECLARATION OF SCOTT M. EDWARDS - 5 LANE POWELL PC 1420 FIFTH AVENUE, SUITE 4200 P.O. BOX 91302 SEATTLE, WA 98111-9402 206.223.7000 FAX: 206.223.7107 CERTIFICATE OF SERVICE I hereby certify under penalty of perjury of the laws of the State of Washington and the United States that, on the date listed below, I caused to be served a copy of the attached document to the following persons via electronic mail: Kari L. Sand Ogden Murphy Wallace P.L.L.C. 901 Fifth Avenue, Suite 3500 Seattle, WA 98164 ksand@omwlaw.com Cynthia Moya Renton City Clerk 1055 So. Grady Way Renton, WA 98057 cmoya@rentonwa.gov olbrechtslaw@gmail.com Executed on the 29th day of January 2021, at Seattle, Washington. s/ Norma Tsuboi Norma Tsuboi, Legal Assistant PROFESSIONAL SERVICES AGREEMENT FOR TAX AUDIT AND RECOVERY SERVICES This Professional Services Agreement ("Agreement") is made between the City of Renton, a Washington municipal corporation ("City"), and Tax Recovery Services, LLC, (IRS), a Washington corporation ("Contractor"). The City and Contractor (together "Parties") are located and do business at the below addresses which shall be valid for any notice required under this Agreement: TAX RECOVERY SERVICES, LLC Michael J. Crisp, President 1902 157th St E Tacoma, WA 98445 (253) 223-4986 (telephone) TRS@integrity.com CITY OF RENTON: !wen Wang, Finance & IT Administrator 1055 S Grady Way Renton, WA 98057-3232 (425) 430-6858 (telephone) lwang@rentonwa.gov The Parties agree as follows: 1.TERM. The term of this Agreement shall commence upon the effective date of this Agreement, which shall be the date of mutual execution, and shall continue until the completion of the Work, but in any event no later than 12/31/2012 ("Term"). This Agreement may be extended for additional periods of time upon the mutual written agreement of the City and the Contractor. 2.SERVICES.The Contractor shall perform the services more specifically described in Exhibit "A", attached hereto and incorporated by this reference ("Services"), in a manner consistent with the accepted professional practices for other similar services within the Puget Sound region in effect at the time those services are performed, performed to the City's satisfaction, within the time period prescribed by the City and pursuant to the direction of the Mayor or his or her designee. The Contractor warrants that it has the requisite training, skill, and experience necessary to provide the Services and is appropriately accredited and licensed by all applicable agencies and governmental entitles, including but not limited to obtaining a City of Renton business registration. Services shall begin immediately upon the effective date of this Agreement. Services shall be subject, at all times, to inspection by and approval of the City, but the making (or failure or delay in making) such inspection or approval shall not relieve Contractor of responsibility for performance of the Services in accordance with this Agreement, notwithstanding the City's knowledge of defective or non -complying performance,its substantiality or the ease of its discovery. 000443 PROFESSIONAL SERVICES AGREEMENT FOR TAX AUDIT AND RECOVERY SERVICES This Professional Services Agreement ("Agreement") is made between the City of Renton, a Washington municipal corporation ("City"), and Tax Recovery Services, LLC, (IRS), a Washington corporation ("Contractor"). The City and Contractor (together "Parties") are located and do business at the below addresses which shall be valid for any notice required under this Agreement: TAX RECOVERY SERVICES, LLC Michael J. Crisp, President 1902 157th St E Tacoma, WA 98445 (253) 223-4986 (telephone) TRS@integrity.com CITY OF RENTON: !wen Wang, Finance & IT Administrator 1055 S Grady Way Renton, WA 98057-3232 (425) 430-6858 (telephone) lwang@rentonwa.gov The Parties agree as follows: 1.TERM. The term of this Agreement shall commence upon the effective date of this Agreement, which shall be the date of mutual execution, and shall continue until the completion of the Work, but in any event no later than 12/31/2012 ("Term"). This Agreement may be extended for additional periods of time upon the mutual written agreement of the City and the Contractor. 2.SERVICES.The Contractor shall perform the services more specifically described in Exhibit "A", attached hereto and incorporated by this reference ("Services"), in a manner consistent with the accepted professional practices for other similar services within the Puget Sound region in effect at the time those services are performed, performed to the City's satisfaction, within the time period prescribed by the City and pursuant to the direction of the Mayor or his or her designee. The Contractor warrants that it has the requisite training, skill, and experience necessary to provide the Services and is appropriately accredited and licensed by all applicable agencies and governmental entitles, including but not limited to obtaining a City of Renton business registration. Services shall begin immediately upon the effective date of this Agreement. Services shall be subject, at all times, to inspection by and approval of the City, but the making (or failure or delay in making) such inspection or approval shall not relieve Contractor of responsibility for performance of the Services in accordance with this Agreement, notwithstanding the City's knowledge of defective or non -complying performance,its substantiality or the ease of its discovery. 000443 3.TERMINATION.Either party may terminate this Agreement, with or without cause, upon providing the other party thirty (30) days written notice at its address set forth above. The City may terminate this Agreement immediately if the Contractor falls to maintain required insurance policies, breaches confidentiality, or materially violates Section 12; and such may result in ineligibility for further City agreements. 4.COMPENSATION. 4.1 Amount. In return for the Services, the City shall pay the Contractor an amount not to exceed a maximum amount and according to a rate or method as delineated in Exhibit "B", attached hereto and incorporated by this reference. The Contractor agrees that any hourly or flat rate charged by it for its services contracted for herein shall remain locked at the negotiated rate(s) for the Term. Except as otherwise provided in Exhibit "B", the Contractor shall be solely responsible for the payment of any taxes imposed by any lawful Jurisdiction as a result of the performance and payment of this Agreement. 4.2 Method of Payment. On a monthly basis, the Contractor shall submit a voucher or invoice In the form specified by the City, including a description of what Services have been performed, the name of the personnel performing such Services, and any hourly labor charge rate for such personnel. The Contractor shall also submit a final bill upon completion of all Services. Payment shall be made on a monthly basis by the City only after the Services have been performed and within thirty (30) days after receipt and approval by the appropriate City representative of the voucher or invoice. If the Services do not meet the requirements of this Agreement, the Contractor will correct or modify the work to comply with the Agreement. The City may withhold payment for such work until the work meets the requirements of the Agreement. 4.3 Non -Appropriation of Funds. If sufficient funds are not appropriated or allocated for payment under this Agreement for any future fiscal period, the City will not be obligated to make payments for Services or amounts incurred after the end of the current fiscal period, and this Agreement will terminate upon the completion of all remaining Services for which funds are allocated. No penalty or expense shall accrue to the City in the event this provision applies. 5.INDEMNIFICATION. 5.1 Contractor Indemnification.The Contractor agrees to release, indemnify, defend, and hold the City, its elected officials, officers, employees, agents, representatives, insurers, attorneys, and volunteers harmless from any and all claims, demands, actions, suits, causes of action, arbitrations, mediations, proceedings, judgments, awards, injuries, damages, liabilities, taxes, losses, fines, fees, penalties expenses, attorney's fees, costs, and/or litigation expenses to or by any and all persons or entities, including, without limitation, their respective agents, licensees, or representatives; arising from, resulting from, or in connection with this Agreement or the acts, errors or omissions of the Contractor in performance of this Agreement, 2 of 10 000444 3.TERMINATION.Either party may terminate this Agreement, with or without cause, upon providing the other party thirty (30) days written notice at its address set forth above. The City may terminate this Agreement immediately if the Contractor falls to maintain required insurance policies, breaches confidentiality, or materially violates Section 12; and such may result in ineligibility for further City agreements. 4.COMPENSATION. 4.1 Amount. In return for the Services, the City shall pay the Contractor an amount not to exceed a maximum amount and according to a rate or method as delineated in Exhibit "B", attached hereto and incorporated by this reference. The Contractor agrees that any hourly or flat rate charged by it for its services contracted for herein shall remain locked at the negotiated rate(s) for the Term. Except as otherwise provided in Exhibit "B", the Contractor shall be solely responsible for the payment of any taxes imposed by any lawful Jurisdiction as a result of the performance and payment of this Agreement. 4.2 Method of Payment. On a monthly basis, the Contractor shall submit a voucher or invoice In the form specified by the City, including a description of what Services have been performed, the name of the personnel performing such Services, and any hourly labor charge rate for such personnel. The Contractor shall also submit a final bill upon completion of all Services. Payment shall be made on a monthly basis by the City only after the Services have been performed and within thirty (30) days after receipt and approval by the appropriate City representative of the voucher or invoice. If the Services do not meet the requirements of this Agreement, the Contractor will correct or modify the work to comply with the Agreement. The City may withhold payment for such work until the work meets the requirements of the Agreement. 4.3 Non -Appropriation of Funds. If sufficient funds are not appropriated or allocated for payment under this Agreement for any future fiscal period, the City will not be obligated to make payments for Services or amounts incurred after the end of the current fiscal period, and this Agreement will terminate upon the completion of all remaining Services for which funds are allocated. No penalty or expense shall accrue to the City in the event this provision applies. 5.INDEMNIFICATION. 5.1 Contractor Indemnification.The Contractor agrees to release, indemnify, defend, and hold the City, its elected officials, officers, employees, agents, representatives, insurers, attorneys, and volunteers harmless from any and all claims, demands, actions, suits, causes of action, arbitrations, mediations, proceedings, judgments, awards, injuries, damages, liabilities, taxes, losses, fines, fees, penalties expenses, attorney's fees, costs, and/or litigation expenses to or by any and all persons or entities, including, without limitation, their respective agents, licensees, or representatives; arising from, resulting from, or in connection with this Agreement or the acts, errors or omissions of the Contractor in performance of this Agreement, 2 of 10 000444 except for that portion of the claims caused by the City's sole negligence. Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the Contractor and the City, the Contractor's liability hereunder shall be only to the extent of the Contractor's negligence. Contractor shall ensure that each sub -contractor shall agree to defend and indemnify the City, its elected officials,officers, employees, agents, representatives, insurers, attorneys, and volunteers to the extent and on the same terms and conditions as the Contractor pursuant to this paragraph. The City's inspection or acceptance of any of Contractor's work when completed shall not be grounds to avoid any of these covenants of indemnification. 5.2 Industrial Insurance Act Waiver.It is specifically and expressly understood that the Contractor waives any immunity that may be granted to it under the Washington State industrial insurance act,Title 51 RCW, solely for the purposes of this indemnification. Contractor's indemnification shall not be limited in any way by any limitation on the amount of damages, compensation or benefits payable to or by any third party under workers' compensation acts, disability benefit acts or any other benefits acts or programs. The Parties acknowledge that they have mutually negotiated this waiver. 5.3 City indemnification, The City agrees to release, indemnify, defend and hold the Contractor, its officers, directors, shareholders, partners, employees, agents, representatives, and sub -contractors harmless from any and all claims, demands, actions, suits, causes of action, arbitrations, mediations, proceedings, judgments, awards, injuries, damages, liabilities, losses, fines, fees, penalties expenses, attorney's fees, costs, and/or litigation expenses to or by any and all persons or entities, including without limitation, their respective agents, licensees, or representatives, arising from, resulting from or connected with this Agreement to the extent solely caused by the negligent acts, errors, or omissions of the City. 5.4 Survival.The provisions of this Section shall survive the expiration or termination of this Agreement with respect to any event occurring prior to such expiration or termination. 6.INSURANCE. The Contractor agrees to carry insurance for liability which may arise from or in connection with the performance of the services or work by the Contractor, their agents, representatives, employees or subcontractors, as provided in Exhibit "C" , attached hereto and incorporated by this reference, for the duration of the Agreement and thereafter with respect to any event occurring prior to such expiration or termination. The provisions of this Section shall survive the expiration or termination of this Agreement, 7.CONFIDENTIALITY. All information regarding the City obtained by Contractor in performance of. this Agreement shall be considered confidential subject to applicable laws. Breach of confidentiality by the Contractor may be grounds for immediate termination.All records submitted by the City to the Contractor will be safeguarded by the Contractor. The 3 of 10 000445 except for that portion of the claims caused by the City's sole negligence. Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the Contractor and the City, the Contractor's liability hereunder shall be only to the extent of the Contractor's negligence. Contractor shall ensure that each sub -contractor shall agree to defend and indemnify the City, its elected officials,officers, employees, agents, representatives, insurers, attorneys, and volunteers to the extent and on the same terms and conditions as the Contractor pursuant to this paragraph. The City's inspection or acceptance of any of Contractor's work when completed shall not be grounds to avoid any of these covenants of indemnification. 5.2 Industrial Insurance Act Waiver.It is specifically and expressly understood that the Contractor waives any immunity that may be granted to it under the Washington State industrial insurance act,Title 51 RCW, solely for the purposes of this indemnification. Contractor's indemnification shall not be limited in any way by any limitation on the amount of damages, compensation or benefits payable to or by any third party under workers' compensation acts, disability benefit acts or any other benefits acts or programs. The Parties acknowledge that they have mutually negotiated this waiver. 5.3 City indemnification, The City agrees to release, indemnify, defend and hold the Contractor, its officers, directors, shareholders, partners, employees, agents, representatives, and sub -contractors harmless from any and all claims, demands, actions, suits, causes of action, arbitrations, mediations, proceedings, judgments, awards, injuries, damages, liabilities, losses, fines, fees, penalties expenses, attorney's fees, costs, and/or litigation expenses to or by any and all persons or entities, including without limitation, their respective agents, licensees, or representatives, arising from, resulting from or connected with this Agreement to the extent solely caused by the negligent acts, errors, or omissions of the City. 5.4 Survival.The provisions of this Section shall survive the expiration or termination of this Agreement with respect to any event occurring prior to such expiration or termination. 6.INSURANCE. The Contractor agrees to carry insurance for liability which may arise from or in connection with the performance of the services or work by the Contractor, their agents, representatives, employees or subcontractors, as provided in Exhibit "C" , attached hereto and incorporated by this reference, for the duration of the Agreement and thereafter with respect to any event occurring prior to such expiration or termination. The provisions of this Section shall survive the expiration or termination of this Agreement, 7.CONFIDENTIALITY. All information regarding the City obtained by Contractor in performance of. this Agreement shall be considered confidential subject to applicable laws. Breach of confidentiality by the Contractor may be grounds for immediate termination.All records submitted by the City to the Contractor will be safeguarded by the Contractor. The 3 of 10 000445 Contractor will fully cooperate with the City in identifying, assembling, and providing records in case of any public records disclosure request. 8.WORK PRODUCT. All originals and copies of work product, including plans, sketches, layouts, designs, design specifications, records, files, computer disks, magnetic media or material which may be produced or modified by Contractor while performing the Work shall belong to the City upon delivery. The Contractor shall make such data, documents, and files available to the City and shall deliver all needed or contracted for work product upon the City's request. At the expiration or termination of this Agreement, all originals and copies of any such work product remaining in the possession of Contractor shall be delivered to the City. 9.BOOKS AND RECORDS.The Contractor agrees to maintain books, records, and documents which sufficiently and properly reflect all direct and indirect costs related to the performance of the Work and maintain such accounting procedures and practices as may be deemed necessary by the City to assure proper accounting of all funds paid pursuant to this Agreement. These records shall be subject, at all reasonable times, to inspection, review or audit by the City, its authorized representative, the State Auditor, or other governmental officials authorized by law to monitor this Agreement. 10.INDEPENDENT CONTRACTOR.The Parties intend that the Contractor shall be an independent contractor and that the Contractor has the ability to control and direct the performance and details of its work, the City being interested only in the results obtained under this Agreement. The City shall be neither liable nor obligated to pay Contractor sick leave, vacation pay or any other benefit of employment, nor to pay any social security or other tax which may arise as an incident of employment. Contractor shall take all necessary precautions and shall be responsible for the safety of its employees, agents, and subcontractors in the performance of the contract work and shall utilize all protection necessary for that purpose. All work shall be done at Contractor's own risk, and Contractor shall be responsible for any loss of or damage to materials, tools, or other articles used or held for use in connection with the work. The Contractor shall pay all income and other taxes due except as specifically provided in Section 4.Industrial or any other insurance that is purchased for the benefit of the City, regardless of whether such may provide a secondary or incidental benefit to the Contractor, shall not be deemed to convert this Agreement to an employment contract. lithe Contractor is a sole proprietorship or if this Agreement is with an individual, the Contractor agrees to notify the City and complete any required form if the Contractor retired under a State of Washington retirement system and agrees to indemnify any losses the City may sustain through the Contractor's failure to do so. 11.CONFLICT OF INTEREST.It is recognized that Contractor may or will be performing professional services during the Term for other parties; however, such performance of other services shall not conflict with or interfere with Contractor's ability to perform the Services. Contractor agrees to resolve any such conflicts of interest in favor of the City. Contractor confirms that Contractor does not have a business interest or a close family relationship with 4 of 10 000446 Contractor will fully cooperate with the City in identifying, assembling, and providing records in case of any public records disclosure request. 8.WORK PRODUCT. All originals and copies of work product, including plans, sketches, layouts, designs, design specifications, records, files, computer disks, magnetic media or material which may be produced or modified by Contractor while performing the Work shall belong to the City upon delivery. The Contractor shall make such data, documents, and files available to the City and shall deliver all needed or contracted for work product upon the City's request. At the expiration or termination of this Agreement, all originals and copies of any such work product remaining in the possession of Contractor shall be delivered to the City. 9.BOOKS AND RECORDS.The Contractor agrees to maintain books, records, and documents which sufficiently and properly reflect all direct and indirect costs related to the performance of the Work and maintain such accounting procedures and practices as may be deemed necessary by the City to assure proper accounting of all funds paid pursuant to this Agreement. These records shall be subject, at all reasonable times, to inspection, review or audit by the City, its authorized representative, the State Auditor, or other governmental officials authorized by law to monitor this Agreement. 10.INDEPENDENT CONTRACTOR.The Parties intend that the Contractor shall be an independent contractor and that the Contractor has the ability to control and direct the performance and details of its work, the City being interested only in the results obtained under this Agreement. The City shall be neither liable nor obligated to pay Contractor sick leave, vacation pay or any other benefit of employment, nor to pay any social security or other tax which may arise as an incident of employment. Contractor shall take all necessary precautions and shall be responsible for the safety of its employees, agents, and subcontractors in the performance of the contract work and shall utilize all protection necessary for that purpose. All work shall be done at Contractor's own risk, and Contractor shall be responsible for any loss of or damage to materials, tools, or other articles used or held for use in connection with the work. The Contractor shall pay all income and other taxes due except as specifically provided in Section 4.Industrial or any other insurance that is purchased for the benefit of the City, regardless of whether such may provide a secondary or incidental benefit to the Contractor, shall not be deemed to convert this Agreement to an employment contract. lithe Contractor is a sole proprietorship or if this Agreement is with an individual, the Contractor agrees to notify the City and complete any required form if the Contractor retired under a State of Washington retirement system and agrees to indemnify any losses the City may sustain through the Contractor's failure to do so. 11.CONFLICT OF INTEREST.It is recognized that Contractor may or will be performing professional services during the Term for other parties; however, such performance of other services shall not conflict with or interfere with Contractor's ability to perform the Services. Contractor agrees to resolve any such conflicts of interest in favor of the City. Contractor confirms that Contractor does not have a business interest or a close family relationship with 4 of 10 000446 any City officer or employee who was, is, or will be involved in the Contractor's selection, negotiation, drafting, signing, administration, or evaluating the Contractor's performance. 12.EQUAL OPPORTUNITY EMPLOYER.In all services, programs, activities, hiring, and employment made possible by or resulting from this Agreement or any subcontract, there shall be no discrimination by Contractor or Its subcontractors of any level, or any of those entities' employees, agents, subcontractors, or representatives against any person because of sex, age (except minimum age and retirement provisions), race, color, religion, creed, national origin, marital status, or the presence of any disability, including sensory, mental or physical handicaps, unless based upon a bona fide occupational qualification in relationship to hiring and employment.This requirement shall apply, but not be limited to the following: employment, advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. Contractor shall comply with and shall not violate any of the terms of Chapter 49.60 RCW, Title VI of the Civil Rights Act of 1964, the Americans With Disabilities Act, Section 504 of the Rehabilitation Act of 1973, 49 CFR Part 21, 21.5 and 26, or any other applicable federal, state, or local law or regulation regarding non- discrimination. 13.GENERAL PROVISIONS. 13.1 Interpretation and Modification. This Agreement, together with any attached Exhibits, contains all of the agreements of the Parties with respect to any matter covered or mentioned in this Agreement and no prior statements or agreements, whether oral or written, shall be effective for any purpose. Should any language in any Exhibits to this Agreement conflict with any language in this Agreement, the terms of this Agreement shall prevail. The respective captions of the Sections of this Agreement are inserted for convenience of reference only and shall not be deemed to modify or otherwise affect any of the provisions of this Agreement. Any provision of this Agreement that is declared invalid, Inoperative, null and void, or illegal shall in no way affect or invalidate any other provision hereof and such other provisions shall remain in full force and effect. Any act done by either Party prior to the effective date of the Agreement that is consistent with the authority of the Agreement and compliant with the terms of the Agreement, is hereby ratified as having been performed under the Agreement. No provision of this Agreement, including this provision, may be amended, waived, or modified except by written agreement signed by duly authorized representatives of the Parties. 13.2 Assignment and Beneficiaries. Neither the Contractor nor the City shall have the right to transfer or assign, in whole or in part, any or all of its obligations and rights hereunder without the prior written consent of the other Party. If the non -assigning party gives its consent to any assignment, the terms of this Agreement shall continue in full force and effect and no further assignment shall be made without additional written consent. Subject to the foregoing, the rights and obligations of the Parties shall inure to the benefit of and be binding upon their respective successors in interest, heirs and assigns. This Agreement is made and entered into 5 of 10 000447 any City officer or employee who was, is, or will be involved in the Contractor's selection, negotiation, drafting, signing, administration, or evaluating the Contractor's performance. 12.EQUAL OPPORTUNITY EMPLOYER.In all services, programs, activities, hiring, and employment made possible by or resulting from this Agreement or any subcontract, there shall be no discrimination by Contractor or Its subcontractors of any level, or any of those entities' employees, agents, subcontractors, or representatives against any person because of sex, age (except minimum age and retirement provisions), race, color, religion, creed, national origin, marital status, or the presence of any disability, including sensory, mental or physical handicaps, unless based upon a bona fide occupational qualification in relationship to hiring and employment.This requirement shall apply, but not be limited to the following: employment, advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. Contractor shall comply with and shall not violate any of the terms of Chapter 49.60 RCW, Title VI of the Civil Rights Act of 1964, the Americans With Disabilities Act, Section 504 of the Rehabilitation Act of 1973, 49 CFR Part 21, 21.5 and 26, or any other applicable federal, state, or local law or regulation regarding non- discrimination. 13.GENERAL PROVISIONS. 13.1 Interpretation and Modification. This Agreement, together with any attached Exhibits, contains all of the agreements of the Parties with respect to any matter covered or mentioned in this Agreement and no prior statements or agreements, whether oral or written, shall be effective for any purpose. Should any language in any Exhibits to this Agreement conflict with any language in this Agreement, the terms of this Agreement shall prevail. The respective captions of the Sections of this Agreement are inserted for convenience of reference only and shall not be deemed to modify or otherwise affect any of the provisions of this Agreement. Any provision of this Agreement that is declared invalid, Inoperative, null and void, or illegal shall in no way affect or invalidate any other provision hereof and such other provisions shall remain in full force and effect. Any act done by either Party prior to the effective date of the Agreement that is consistent with the authority of the Agreement and compliant with the terms of the Agreement, is hereby ratified as having been performed under the Agreement. No provision of this Agreement, including this provision, may be amended, waived, or modified except by written agreement signed by duly authorized representatives of the Parties. 13.2 Assignment and Beneficiaries. Neither the Contractor nor the City shall have the right to transfer or assign, in whole or in part, any or all of its obligations and rights hereunder without the prior written consent of the other Party. If the non -assigning party gives its consent to any assignment, the terms of this Agreement shall continue in full force and effect and no further assignment shall be made without additional written consent. Subject to the foregoing, the rights and obligations of the Parties shall inure to the benefit of and be binding upon their respective successors in interest, heirs and assigns. This Agreement is made and entered into 5 of 10 000447 for the sole protection and benefit of the Parties hereto, No other person or entity shall have any right of action or interest in this Agreement based on any provision set forth herein. 13.3 Compliance with Laws.The Contractor shall comply with and perform the Services in accordance with all applicable federal, state, local, and city laws including, without limitation, all City codes, ordinances, resolutions, regulations, rules, standards and policies, as now existing or hereafter amended, adopted, or made effective. if a violation of the City's Ethics Resolution No. 91-54, as amended, occurs as a result of the formation or performance of this Agreement, this Agreement may be rendered null and void, at the City's option. 13.4 Enforcement. Time is of the essence of this Agreement and each and all of its provisions in which performance Is a factor. Adherence to completion dates set forth in the description of the Services is essential to the Contractor's performance of this Agreement. Any notices required to be given by the Parties shall be delivered at the addresses set forth at the beginning of this Agreement. Any notices may be delivered personally to the addressee of the notice or may be deposited in the United States mail, postage prepaid, to the address set forth above. Any notice so posted in the United States mail shall be deemed received three (3) days after the date of mailing. Any remedies provided for under the terms of this Agreement are not intended to be exclusive, but shall be cumulative with all other remedies available to the City at law, in equity or by statute. The failure of the City to insist upon strict performance of any of the covenants and agreements contained in this Agreement, or to exercise any option conferred by this Agreement in one or more instances shall not be construed to be a waiver or relinquishment of those covenants, agreements or options, and the same shall be and remain in full force and effect. Failure or delay of the City to declare any breach or default immediately upon occurrence shall not waive such breach or default.Failure of the City to declare one breach or default does not act as a waiver of the City's right to declare another breach or default. This Agreement shall be made in, governed by, and interpreted in accordance with the laws of the State of Washington. If the Parties are unable to settle any dispute, difference or claim arising from this Agreement, the exclusive means of resolving that dispute, difference, or claim, shall be by filing suit under the venue, rules and jurisdiction of the King County Superior Court, King County, Washington, unless the parties agree in writing to an alternative process. If the King County Superior Court does not have Jurisdiction over such a suit, then suit may be filed in any other appropriate court in King County, Washington. Each party consents to the personal jurisdiction of the state and federal courts in King County, Washington and waives any objection that such courts are an inconvenient forum. If either Party brings any claim or lawsuit arising from this Agreement, each Party shall pay all its legal costs and attorney's fees and expenses incurred in defending or bringing such claim or lawsuit, including all appeals, in addition to any other recovery or award provided by law; provided, however, however nothing in this paragraph shall be construed to limit the Parties' rights to indemnification under Section 5 of this Agreement. 6 of 10 000448 for the sole protection and benefit of the Parties hereto, No other person or entity shall have any right of action or interest in this Agreement based on any provision set forth herein. 13.3 Compliance with Laws.The Contractor shall comply with and perform the Services in accordance with all applicable federal, state, local, and city laws including, without limitation, all City codes, ordinances, resolutions, regulations, rules, standards and policies, as now existing or hereafter amended, adopted, or made effective. if a violation of the City's Ethics Resolution No. 91-54, as amended, occurs as a result of the formation or performance of this Agreement, this Agreement may be rendered null and void, at the City's option. 13.4 Enforcement. Time is of the essence of this Agreement and each and all of its provisions in which performance Is a factor. Adherence to completion dates set forth in the description of the Services is essential to the Contractor's performance of this Agreement. Any notices required to be given by the Parties shall be delivered at the addresses set forth at the beginning of this Agreement. Any notices may be delivered personally to the addressee of the notice or may be deposited in the United States mail, postage prepaid, to the address set forth above. Any notice so posted in the United States mail shall be deemed received three (3) days after the date of mailing. Any remedies provided for under the terms of this Agreement are not intended to be exclusive, but shall be cumulative with all other remedies available to the City at law, in equity or by statute. The failure of the City to insist upon strict performance of any of the covenants and agreements contained in this Agreement, or to exercise any option conferred by this Agreement in one or more instances shall not be construed to be a waiver or relinquishment of those covenants, agreements or options, and the same shall be and remain in full force and effect. Failure or delay of the City to declare any breach or default immediately upon occurrence shall not waive such breach or default.Failure of the City to declare one breach or default does not act as a waiver of the City's right to declare another breach or default. This Agreement shall be made in, governed by, and interpreted in accordance with the laws of the State of Washington. If the Parties are unable to settle any dispute, difference or claim arising from this Agreement, the exclusive means of resolving that dispute, difference, or claim, shall be by filing suit under the venue, rules and jurisdiction of the King County Superior Court, King County, Washington, unless the parties agree in writing to an alternative process. If the King County Superior Court does not have Jurisdiction over such a suit, then suit may be filed in any other appropriate court in King County, Washington. Each party consents to the personal jurisdiction of the state and federal courts in King County, Washington and waives any objection that such courts are an inconvenient forum. If either Party brings any claim or lawsuit arising from this Agreement, each Party shall pay all its legal costs and attorney's fees and expenses incurred in defending or bringing such claim or lawsuit, including all appeals, in addition to any other recovery or award provided by law; provided, however, however nothing in this paragraph shall be construed to limit the Parties' rights to indemnification under Section 5 of this Agreement. 6 of 10 000448 13,5 Execution.Each individual executing this Agreement on behalf of the City and Contractor represents and warrants that such individual is duly authorized to execute and deliver this Agreement. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and with the same effect as if all Parties hereto had signed the same document, All such counterparts shall be construed together and shall constitute one instrument, but in making proof hereof It shall only be necessary to produce one such counterpart. The signature and acknowledgment pages from such counterparts may be assembled together to form a single Instrument comprised of all pages of this Agreement and a complete set of all signature and acknowledgment pages. The date upon which the last of all of the Parties have executed a counterpart of this Agreement shall be the "date of mutual execution" hereof, IN WITNESS, the Parties execute this Agreement below, effective the last date written below, TAX RECOVERY SERVICES, LLC (TRS)City of Renton By:(!NS , Michael!. Crisp By: Title:President Title:Finance & IT Administrator DATE:'IL(I ti 7 of 10 DATE: October 11, 2011 000449 13,5 Execution.Each individual executing this Agreement on behalf of the City and Contractor represents and warrants that such individual is duly authorized to execute and deliver this Agreement. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and with the same effect as if all Parties hereto had signed the same document, All such counterparts shall be construed together and shall constitute one instrument, but in making proof hereof It shall only be necessary to produce one such counterpart. The signature and acknowledgment pages from such counterparts may be assembled together to form a single Instrument comprised of all pages of this Agreement and a complete set of all signature and acknowledgment pages. The date upon which the last of all of the Parties have executed a counterpart of this Agreement shall be the "date of mutual execution" hereof, IN WITNESS, the Parties execute this Agreement below, effective the last date written below, TAX RECOVERY SERVICES, LLC (TRS)City of Renton By:(!NS , Michael!. Crisp By: Title:President Title:Finance & IT Administrator DATE:'IL(I ti 7 of 10 DATE: October 11, 2011 000449 EXHIBIT A: SCOPE OF SERVICES Utility tax auditing and tax investigation services will be provided by the Contractor as follows: 1.Audits and tax investigations on selected businesses may be conducted by the Contractor as mutually agreed upon by the City and the Contractor. 2.In performing the audits, TRS will act as an agent of the City of Renton, contacting the appropriate businesses, examining their books, and working as necessary with their responsible financial officers and staff. 3.As audits are completed, TRS will keep Renton informed as to additional advantageous audits to consider next. 4.TRS will need certain items from the City including: access to City business license date, including the name of the company to be audited with its address, phone number, state UBU numbers and business license open date. if the company is registered, copies of the business' tax return for the past four years plus the current year. current city map showing city boundaries with street level detail. 5.TRS will provide regular reports on the status of the audit to the City as needed. 6.Once the audit is completed, Tax Recovery Services will supply a copy of the audit to the City of Renton for review before a copy of the audit Is sent to the taxpayer. TRS will be happy to discuss an part of the audit with the City and answer any questions. 7.TRS will then work with the company to help them understand that the audit is done correctly and in accordance to the law, and that payment is due. Doing this helps insure that the audit recovery is submitted promptly, and that the taxpayer pays his future taxes correctly. 8.In no event will this contract be construed to require the Contractor to act as a collection agency or to provide legal representation In a litigation process. 8 of 10 000450 EXHIBIT A: SCOPE OF SERVICES Utility tax auditing and tax investigation services will be provided by the Contractor as follows: 1.Audits and tax investigations on selected businesses may be conducted by the Contractor as mutually agreed upon by the City and the Contractor. 2.In performing the audits, TRS will act as an agent of the City of Renton, contacting the appropriate businesses, examining their books, and working as necessary with their responsible financial officers and staff. 3.As audits are completed, TRS will keep Renton informed as to additional advantageous audits to consider next. 4.TRS will need certain items from the City including: access to City business license date, including the name of the company to be audited with its address, phone number, state UBU numbers and business license open date. if the company is registered, copies of the business' tax return for the past four years plus the current year. current city map showing city boundaries with street level detail. 5.TRS will provide regular reports on the status of the audit to the City as needed. 6.Once the audit is completed, Tax Recovery Services will supply a copy of the audit to the City of Renton for review before a copy of the audit Is sent to the taxpayer. TRS will be happy to discuss an part of the audit with the City and answer any questions. 7.TRS will then work with the company to help them understand that the audit is done correctly and in accordance to the law, and that payment is due. Doing this helps insure that the audit recovery is submitted promptly, and that the taxpayer pays his future taxes correctly. 8.In no event will this contract be construed to require the Contractor to act as a collection agency or to provide legal representation In a litigation process. 8 of 10 000450 EXHIBIT "B" COMPENSATION 1.Total Compensation: In return for the Services, the City shall pay the Contractor an amount not to exceed twenty-three percent (23%) of the actual revenue recovered. 2.Method of Compensation: In consideration of the Contractor performing the Services, the City agrees to pay the Contractor according to the following schedule: For each audit or tax investigation, the City agrees to pay the Contractor a fee in the amount of twenty-three percent (23%) of any revenue recovered due to the audit; however, Contractor will not be compensated for money the City receives from taxes owed for periods before or after the audit period. Contractor will be paid only when City receives actual tax revenue. "Revenues recovered" shall be construed to mean all funds received due to the final audit documents, plus any additional funds received during the audit phase directly attributable to the performing of the audit. 9 of 10 000451 EXHIBIT "B" COMPENSATION 1.Total Compensation: In return for the Services, the City shall pay the Contractor an amount not to exceed twenty-three percent (23%) of the actual revenue recovered. 2.Method of Compensation: In consideration of the Contractor performing the Services, the City agrees to pay the Contractor according to the following schedule: For each audit or tax investigation, the City agrees to pay the Contractor a fee in the amount of twenty-three percent (23%) of any revenue recovered due to the audit; however, Contractor will not be compensated for money the City receives from taxes owed for periods before or after the audit period. Contractor will be paid only when City receives actual tax revenue. "Revenues recovered" shall be construed to mean all funds received due to the final audit documents, plus any additional funds received during the audit phase directly attributable to the performing of the audit. 9 of 10 000451 EXHIBIT "C" INSURANCE 1.The Contractor agrees to carry as a minimum, the following insurance, in such forms and with such carriers who have a rating that is satisfactory to the City: a.Commercial general liability insurance covering liability arising from premises, operations, independent contractors,products -completed operations, stop gap liability, personal injury, bodily Injury, death, property damage, products liability, advertising injury, and liability assumed under an insured contract with limits no less than $1,000,000 for each occurrence and $1,000,000 general aggregate. b.Workers' compensation and employer's liability insurance in amounts sufficient pursuant to the laws of the State of Washington; c.Automobile liability insurance covering all owned, non -owned, hired and leased vehicles with a minimum combined single limits no less than $1,000,000 for each occurrence per accident for bodily injury, Including personal injury or death, and property damage. d.Professional liability insurance with limits no less than $500,000 per claim and $1,000,000 policy aggregate for damages sustained by reason of or in the course of operation under this Agreement, whether occurring by reason of acts, errors or omissions of the Contractor. 2.Contractor's maintenance of insurance as required by the agreement shall not be construed to limit the liability of the Contractor to the coverage provided by such insurance, or otherwise limit the City's recourse to any remedy available at law or in equity. The Contractor's insurance coverage shall be primary insurance as respect the City.Any insurance, self- insurance, or insurance pool coverage maintained by the City shall be excess of the Contractor's insurance and shall not contribute with it. 3.The City shall be named as additional insured on all such insurance policies, with the exception of any professional liability insurance and any workers' compensation coverage(s) if Contractor participates in a state -run workers' compensation program.Contractor shall provide certificates of insurance, concurrent with the execution of this Agreement, evidencing such coverage and, at City's request, furnish the City with copies of all insurance policies and with evidence of payment of premiums or fees of such policies.All insurance policies shall contain a clause of endorsement providing that they may not be terminated or materially amended during the Term of this Agreement, except after thirty (30) days prior written notice to the City.If Contractor's insurance policies are "claims made," Contractor shall be required to maintain tail coverage for a minimum period of three (3) years from the date this Agreement is actually terminated or upon project completion and acceptance by the City. 10 of 10 000452 EXHIBIT "C" INSURANCE 1.The Contractor agrees to carry as a minimum, the following insurance, in such forms and with such carriers who have a rating that is satisfactory to the City: a.Commercial general liability insurance covering liability arising from premises, operations, independent contractors,products -completed operations, stop gap liability, personal injury, bodily Injury, death, property damage, products liability, advertising injury, and liability assumed under an insured contract with limits no less than $1,000,000 for each occurrence and $1,000,000 general aggregate. b.Workers' compensation and employer's liability insurance in amounts sufficient pursuant to the laws of the State of Washington; c.Automobile liability insurance covering all owned, non -owned, hired and leased vehicles with a minimum combined single limits no less than $1,000,000 for each occurrence per accident for bodily injury, Including personal injury or death, and property damage. d.Professional liability insurance with limits no less than $500,000 per claim and $1,000,000 policy aggregate for damages sustained by reason of or in the course of operation under this Agreement, whether occurring by reason of acts, errors or omissions of the Contractor. 2.Contractor's maintenance of insurance as required by the agreement shall not be construed to limit the liability of the Contractor to the coverage provided by such insurance, or otherwise limit the City's recourse to any remedy available at law or in equity. The Contractor's insurance coverage shall be primary insurance as respect the City.Any insurance, self- insurance, or insurance pool coverage maintained by the City shall be excess of the Contractor's insurance and shall not contribute with it. 3.The City shall be named as additional insured on all such insurance policies, with the exception of any professional liability insurance and any workers' compensation coverage(s) if Contractor participates in a state -run workers' compensation program.Contractor shall provide certificates of insurance, concurrent with the execution of this Agreement, evidencing such coverage and, at City's request, furnish the City with copies of all insurance policies and with evidence of payment of premiums or fees of such policies.All insurance policies shall contain a clause of endorsement providing that they may not be terminated or materially amended during the Term of this Agreement, except after thirty (30) days prior written notice to the City.If Contractor's insurance policies are "claims made," Contractor shall be required to maintain tail coverage for a minimum period of three (3) years from the date this Agreement is actually terminated or upon project completion and acceptance by the City. 10 of 10 000452 ..--T- - ,7,ACOREI CERTIFICATE OF LIABILITY INSURANCE 8054k...----- DATE (MWODNYYVI 10-14-2011 THIS CERTIFICATEIS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER, IMPORTANT: If the certificate holder is an ADDITIONALINSORED, the policy(les) must be endorsed.If SUBROGATIONIS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER BROWN & BROWN OF WA INC/TACOMA/PHS 811153 P: (866)467-8730 F: (877)905-0457 PO BOX 33015 SAN ANTONIO TX 78265 CONTACT NAME: PHONE E i 10, No: (877)905-0457 '''' (866)467-8730 iE-MAIL PRODUCER cusromERIDO: INSURERISI AFFORDING COVERAGE NALCO INSURED TAX RECOVERY SERVICES LLC 1902 157TH ST. E. TACOMA WA 98445 INSURER A: Hartford Casualty Ins CO 29424 INSURER B : INSURER C : INSURER D: INSURER E ; INSURER F: COVERAGES CERTIFICATE NUMBER:REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT 70 ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR[TR TYPE OF INSURANCE AWLINV SUER WVD POLICY NUMBER POLICYEPP IMM/DO/YYVY) POLICY EXP IMM/DO/YYyyj LIMITS A GENERAL LIA8ILITY COMMERCIAL GENERAL UABIUTY 1 X I OCCUR Liab 52 SBA UQ2101 02/13/2011 02/13/2012 EACH OCCURRENCE 41,000,000 DAMAGE TO RENTED PREMISES (Ea occurrence)4300,000 CLAIMS -MADE MED EXP (Any one person)$10,000 X GENT General PERSONAL & ADV INJURY 41,000,000 GENERAL AGGREGATE 42,000,000 AGGREGATE LIMIT ApPLIES PER: POLICY II 28+I X Loc PRODUCTS - COMP/OP AGG * 2 , 000 , 000 $ A AUTOMOBILE- - ...A X LIABILITY ANY AUTO ALL OWNED AUTOS HIRED AUTOS SCHEDULED AUTOS NON -OWNED AUTOS 52 SBA UQ2101 02/13/2011 02/13/2012 COMBINED SINGLE LIMIT Ka Occident)$1,000,000 BODILY INJURY (Per person)4 BODILY INJURY Met eminent)4 ipplif sEccRLYentDiDAMAGE $ 0 4 UMBRELLA DAB EXCESS LIAR OCCUR CLAIMS -MADE EACH OCCURRENCE 4 AGGREGATE DEDUCTIBLE RETENTION B $ 0 A WOincElts COMPENSATIONAND1EMPLOYERS' LIABILITY ANY PROPRIETORM Y / N ARTNER/EXECUTIVE OFFICERJMEMBER EXCLUDED? (Mandatory h NH) NVAgtrrgPEWMONSWm 52 SBA UQ2101 02/13/2011 02/13/2012 WC STATU- I 0TH- TORY LIMITS ER E.L. EACH ACCIDENT *1,000,000 E.L. DISEASE - EA EMPLOYEE 43- r 000, 000 EL DISEASE - POLICY LIMIT $li 000,000 DESCRIPTION OF OPERATIONS /LOCATIONS/ VEHICLES (Attach ACORD 101, Additional Remarks Schedule, I/ more space Is required) Those usual to the Insured's Operations. CERTIFICATE HOLDER CANCELLATION City of Renton 1055 S GRADY WAY RENTON, WA 98057 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE 4--e--174taLy-k-, ACORD 25 (2009/09) 1988-2009 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD 000453 ---A eoRif CERTIFICATE OF LIABILITY INSURANCE R054 Illemer"--.. DATE (MWODNYYY) 10-14-2011 THIS CERTIFICATEIS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER, IMPORTANT: If the certificate holder is an ADDITIONALINSORED, the policy(ies) must be endorsed.If SUBROGATIONIS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER BROWN & BROWN OF WA INC/TACOMA/PHS 811153 P: (866)467-8730 F: (877)905-0457 PO BOX 33015 SAN ANTONIO TX 78265 CONTACT NAME: PHONE(NC No 5xo (866)467-8730 I k760); (877)905-0457j E-mAIL" PRODUCERADDRESS; cusromERIDO: INSURERIS) AFFORDING COVERAGE NALCO INSURED TAX RECOVERY SERVICES LLC 1902 157TH ST. E. TACOMA WA 98445 INSURER A: Hartford Casualty Ins CO 29424 INSURER B : INSURER C : INSURER D: INSURER E ; INSURER F: COVERAGES CERTIFICATE NUMBER:REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. msR[TR TYPE OF INSURANCE ADM INSR SIAM INVD POLICY NUMBER POLICYEPP IMMIDD/TY V V) POLICY EXP IMm/DO/YYTYI LIMITS A GENERAL LIABILITY COMMERCIAL GENERAL LIABILITY [ X I OCCUR Liab 52 SBA UQ2101 02/13/2011 02/13/2012 EACH OCCURRENCE *1,000,000 DAMAGE TO D PREMISES (EaRENoccurTErence)$300,000 CLAIMS -MADE MED EXP (Any one person)$10,000 X General PERSONAL & ADV INJURY $ 1,000,000 GENERAL AGGREGATE 42,000,000 GERI AGGREGAT, UMIT APPLIES PER: PRO-yPOLICYJECT`'LOC PRODUCTS - COMP/OP AGO 92,000,000 $ A AUTOMOBILE ,.A X LIABILITY ANY AUTO All. OWNED AUTOS SCHEDULED AUTOS HIRED AUTOS NON -OWNED AUTOS 52 SBA UQ2101 02/13/2011 02/13/2012 COMBINED SINGLE LIMIT lEa accident)$1,000,000 BODILY INJURY (Per person)S BODILY INJURY (Per accldenti S (PF.R.OrPsEcrentDIAMAGE $ 0 S UMBRELLA LIAR EXCESS ma OCCUR CLAIMS -MADE EACH OCCURRENCE 4 AGGREGATE DEDUCTIBLE RETENTION a S $ A WORkERS COMPENSATION AND EMPLOYERS' LIABILITY ANY PROPRIETOR/PARTNER/EXECUTIVE Y / N OFFICERJMEMBER EXCLUDED? (Mandatory h NH) NVArgrrgPEWMONSWm 52 SBA UQ2101 02/13/2011 02/13/2012 WC STATu-0TH - TORY LIMITS ER E.L. EACH ACCIDENT 41,000,000 E.L. DISEASE - EA EMPLOYEE S 1,000,000 E.L. DISEASE - POLICY LIMIT $ 1,000,000 DESCRIPTION OF OPERATIONS I LOCATIONS / VEHICLES (Attach ACORD 101, AddNonal Rem ota Schedule 0 more space Is requtred1 Those usual to the Insureds Operations. CERTIFICATE HOLDER CANCELLATION City of Renton 1055 S GRADY WAY RENTON, WA 98057 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE ACORD 25 (2009/09) 1988-2009 ACORD CORPORATION. All rights reserved, The ACORD name and logo are registered marks of ACORD 000453 ACORD CERTIFICATE OF LIABILITY INSURANCE DATE (Mht/D0fYYTY) 10/13/2011 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIESBELOW.THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZEDREPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(les) must be endorsed. If SUBROGATION IS WAIVED, subject to theterms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to thecertificate holder in lieu of such endorsement(s), PRODUCER Chilcott Insurance Agency, Inc. 10202 Pacific Ave S, Suite 105 Tacoma, WA 98444 INSURED Tax Recovery Services, LLC 1902 157Ih Ave E Tacoma, WA 98445 COTACT , NAME:Praia PHONE .(AL.c, Ng, ext). 253,4.Z3.7321......._..__ E-MAIL 4P Q.ElgSS_bchilcott@farmersagent,com__ PRODUCER ..P.V.S.I.O.MER t4 /t: BracLChilcoit N SUR EllASIAFFORDING COVERAGE INSURER A : Underwriters at Lloyds,_LondOn INSURERS: INSURER C: INSURER 0 : INSURER E INSURER F : , FAX(NC, No): 253.475.6818 NAIL COVERAGES CERTIFICATE NUMBER:REVISION NUMBER: THIS IS INDICATED. CERTIFICATE EXCLUSIONS INSR' LTR TO CERTIFY THAT THE POLICIES NOTWITHSTANDING ANY REQUIREMENT, h.lAY BE ISSUED OR MAY AND CONDITIONS OF SUCH OF INSURANCE LISTED BELOW HAVE BEEN TERM OR CONDITION OF ANY PERTAIN, THE INSURANCE AFFORDED BY POLICIES. LIMITS SHOWN MAY HAVE BEEN TADTgl-_,S-ULII:r . IN5J2 I vivo POLICY NUMBER ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, REDUCED BY PAID CLAIMS. POLICY EFF I POUCY EX07-- (MMIDDNYYY) I thIM/DDIYYM r LIMITSTYPE OF INSURANCE GENERAL LIABILITY ComhIERCIAL GENERAL LIABILITY CLAIMS-M.ADE I I OCCUR...... I GEN L AGGREGATE LIMIT APPLIES PER,...._ i POLICY t I fltlei t i LOC I 1-- I F- I 1 I I I I EACH OCCURRENCE $DAMKOE"TOFLENTED-1 pF,opgs1E....e.,4___......_..._._ MED EXP (My one person) PERSONAL & ADV INJURY I $ [_GENERAL AGGREGATE 1 $ PRODUCTS - COMP/OP AGG 15 $ I AUTOMOBILE LIABILITY i :_ ANY AUTO ; ALL O14NE0 AUTOSI----' I SCHEDULED AUTOS I ' HIRED AUTOS I ; NON-01ANED AUTOSI I _j I I COMBINED SINGLE LIMIT 1 I (Ea accident) I BODILY INJURY (Per Person)1 5 ,_. ....______ .............._._.. I BODILY INJURY Per accident 5 I PROPERTY DAMAGE I I (Per accident)$ $ .. ' .UMBRELLA LIPS :; OCCUR._ EXCESS MB i CLAWS -MAUI DEDUCTIBLE : RETENTION $ I EACH OCCURRENCE 1-$--- ! AGGREGATE i ! :.I $ ! 1 S WORKERS COMPENSATION I : AND EMPLOYERS' LIABILITY Y I ..INI ANY PROPRIETOR/PARTNER/EXECUTIVE I OFFICER:MEMBER EXCLUDED'IIN:Al (Mandatory In NH)I iII yes. describe under SPFQAI PROVISIONS hnr v I i, - I I I 1 WC &TATO-I IONII 1 ..._LISIRY_LIMITSI__L. ER i ...._....... I E L EACH ACCIDENT I$ E L DISEASE. - EA EMPLOYEE: $ I E L DISEASE POLICY LIMIT S A Errors and Omissions r "1I F1I 330647111192 1 06/14/2011 1106/14/2012 $1,000,000 Per Claim i $1,000,000 Aggregate 1 DESCRIPTION OF OPERATIONS I LOCATIONS /VEHICLES (Attach ACORD 101, Additional Remarks Schedule, If morn space Is required) Evidence of Insurance CERTIFICATE HOLDER CANCELLATION City of Renton 1055 South Grady Way Renton, WA 98057 Attn: Iwen Wang ACORD 25 (2009/09) SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATT.-^-- ©1988.2009 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD 000454 ACORD CERTIFICATE OF LIABILITY INSURANCE DATE (Mht/D0fYYTY) 10/13/2011 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIESBELOW.THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZEDREPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(les) must be endorsed. If SUBROGATION IS WAIVED, subject to theterms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to thecertificate holder in lieu of such endorsement(s), PRODUCER Chilcott Insurance Agency, Inc. 10202 Pacific Ave S, Suite 105 Tacoma, WA 98444 INSURED Tax Recovery Services, LLC 1902 157Ih Ave E Tacoma, WA 98445 COTACT , NAME:Praia PHONE .(AL.c, Ng, ext). 253,4.Z3.7321......._..__ E-MAIL 4P Q.ElgSS_bchilcott@farmersagent,com__ PRODUCER ..P.V.S.I.O.MER t4 /t: BracLChilcoit N SUR EllASIAFFORDING COVERAGE INSURER A : Underwriters at Lloyds,_LondOn INSURERS: INSURER C: INSURER 0 : INSURER E INSURER F : , FAX(NC, No): 253.475.6818 NAIL COVERAGES CERTIFICATE NUMBER:REVISION NUMBER: THIS IS INDICATED. CERTIFICATE EXCLUSIONS INSR' LTR TO CERTIFY THAT THE POLICIES NOTWITHSTANDING ANY REQUIREMENT, h.lAY BE ISSUED OR MAY AND CONDITIONS OF SUCH OF INSURANCE LISTED BELOW HAVE BEEN TERM OR CONDITION OF ANY PERTAIN, THE INSURANCE AFFORDED BY POLICIES. LIMITS SHOWN MAY HAVE BEEN TADTgl-_,S-ULII:r . IN5J2 I vivo POLICY NUMBER ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, REDUCED BY PAID CLAIMS. POLICY EFF I POUCY EX07-- (MMIDDNYYY) I thIM/DDIYYM r LIMITSTYPE OF INSURANCE GENERAL LIABILITY ComhIERCIAL GENERAL LIABILITY CLAIMS-M.ADE I I OCCUR...... I GEN L AGGREGATE LIMIT APPLIES PER,...._ i POLICY t I fltlei t i LOC I 1-- I F- I 1 I I I I EACH OCCURRENCE $DAMKOE"TOFLENTED-1 pF,opgs1E....e.,4___......_..._._ MED EXP (My one person) PERSONAL & ADV INJURY I $ [_GENERAL AGGREGATE 1 $ PRODUCTS - COMP/OP AGG 15 $ I AUTOMOBILE LIABILITY i :_ ANY AUTO ; ALL O14NE0 AUTOSI----' I SCHEDULED AUTOS I ' HIRED AUTOS I ; NON-01ANED AUTOSI I _j I I COMBINED SINGLE LIMIT 1 I (Ea accident) I BODILY INJURY (Per Person)1 5 ,_. ....______ .............._._.. I BODILY INJURY Per accident 5 I PROPERTY DAMAGE I I (Per accident)$ $ .. ' .UMBRELLA LIPS :; OCCUR._ EXCESS MB i CLAWS -MAUI DEDUCTIBLE : RETENTION $ I EACH OCCURRENCE 1-$--- ! AGGREGATE i ! :.I $ ! 1 S WORKERS COMPENSATION I : AND EMPLOYERS' LIABILITY Y I ..INI ANY PROPRIETOR/PARTNER/EXECUTIVE I OFFICER:MEMBER EXCLUDED'IIN:Al (Mandatory In NH)I iII yes. describe under SPFQAI PROVISIONS hnr v I i, - I I I 1 WC &TATO-I IONII 1 ..._LISIRY_LIMITSI__L. ER i ...._....... I E L EACH ACCIDENT I$ E L DISEASE. - EA EMPLOYEE: $ I E L DISEASE POLICY LIMIT S A Errors and Omissions r "1I F1I 330647111192 1 06/14/2011 1106/14/2012 $1,000,000 Per Claim i $1,000,000 Aggregate 1 DESCRIPTION OF OPERATIONS I LOCATIONS /VEHICLES (Attach ACORD 101, Additional Remarks Schedule, If morn space Is required) Evidence of Insurance CERTIFICATE HOLDER CANCELLATION City of Renton 1055 South Grady Way Renton, WA 98057 Attn: Iwen Wang ACORD 25 (2009/09) SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATT.-^-- ©1988.2009 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD 000454 Amendment to Professional Service Agreement For Tax Recovery Services, LLC This Amendment ("Amendment No. 1") is made between the City of Renton,a Washington municipal corporation ("City") and Tax Recovery Services LLC, (TRS), a Washington Corporation ("Corporation"). The City and Contractor (together "Parties"), for valuable consideration and by mutual consent of the parties, agree to amend the original Agreement for Tax Recovery Services, LLC ("Agreement") dated effective October 11, 2011 as amended by Amendment No(s) 1, as follows: 1.AMENDED TERM. The term of the Agreement as referred to by Section 1 of the Agreement and any prior amendment thereto, shall be amended and shall continue until the completion of the Services, but in any event no later than December 31, 2014 (Amended Term"). 2.GENERAL PROVISIONS. All other terms and provision of the Agreement, together with any prior amendments thereto not modified by this Amendment, shall remainin full force and effect. Any and all acts done by either Party consistent with the authority of the Agreement, together with any prior amendments thereto, after the previous expiration date and prior to the effective date of this amendment, is hereby ratified as having been performed under the Agreement, as modified by any prior amendments, as it existed prior to this Amendment. The parties whose names appear below swear under penalty of perjury that they are authorized to enter into the Amendment, which is binding on parties of this contract. IN WITNESS, the Parties execute this Agreement below, effective the last date written below: City of Renton By: Iwen Wang, Adm(nistrative Services Administrator Date: Tax Recovery Services, LLC. By:\ Printed Name: 4\t"---, Title;s , Date: 000455 Amendment to Professional Service Agreement For Tax Recovery Services, LLC This Amendment ("Amendment No. 1") is made between the City of Renton,a Washington municipal corporation ("City") and Tax Recovery Services LLC, (TRS), a Washington Corporation ("Corporation"). The City and Contractor (together "Parties"), for valuable consideration and by mutual consent of the parties, agree to amend the original Agreement for Tax Recovery Services, LLC ("Agreement") dated effective October 11, 2011 as amended by Amendment No(s) 1, as follows: 1.AMENDED TERM. The term of the Agreement as referred to by Section 1 of the Agreement and any prior amendment thereto, shall be amended and shall continue until the completion of the Services, but in any event no later than December 31, 2014 (Amended Term"). 2.GENERAL PROVISIONS. All other terms and provision of the Agreement, together with any prior amendments thereto not modified by this Amendment, shall remainin full force and effect. Any and all acts done by either Party consistent with the authority of the Agreement, together with any prior amendments thereto, after the previous expiration date and prior to the effective date of this amendment, is hereby ratified as having been performed under the Agreement, as modified by any prior amendments, as it existed prior to this Amendment. The parties whose names appear below swear under penalty of perjury that they are authorized to enter into the Amendment, which is binding on parties of this contract. IN WITNESS, the Parties execute this Agreement below, effective the last date written below: City of Renton By: Iwen Wang, Adm(nistrative Services Administrator Date: Tax Recovery Services, LLC. By:\ Printed Name: 4\t"---, Title;s , Date: 000455 AMENDMENT to contract between the City of Renton and Tax Recovery Services, LLC The contract between the City of Renton, Washington and Tax Recovery Services, LLC for Business Tax Auditing Services dated October 11, 2011 is hereby amended as follows: Provision No 1 under TERM is changed to extend the contract through December 31, 2017. All other terms and conditions of the above reference contract shall remain the same. This change shall be effective immediately. CITY ENTO TAX RECOVERY SERVICES, LLC By:By:\ik-cLCL /,\_ N. , :-, \- i ;.--.2 ,izs'Title: Administrative S rvices Administrator Title:S ,(' Date:Date:\\ 000460 AMENDMENT to contract between the City of Renton and Tax Recovery Services, LLC The contract between the City of Renton, Washington and Tax Recovery Services, LLC for Business Tax Auditing Services dated October 11, 2011 is hereby amended as follows: Provision No 1 under TERM is changed to extend the contract through December 31, 2017. All other terms and conditions of the above reference contract shall remain the same. This change shall be effective immediately. CITY ENTO TAX RECOVERY SERVICES, LLC By:By:\ik-cLCL /,\_ N. , :-, \- i ;.--.2 ,izs'Title: Administrative S rvices Administrator Title:S ,(' Date:Date:\\ 000460 Nate Malone From:TRS <crisp@trs-integrity.com> Sent:Wednesday, June 5, 2013 5:03 PM To:Iwen Subject:June 2013 Update Attachments:June 2013 Renton Update.odt Hi Iwen, Here is the update for June 2013. Let me know if you have any questions. Also, let me know if you would like us to do TracFone. After doing a lot of research on this company, I believe this would be a good audit to do for the City of Renton. Thanks Iwen. Have a good afternoon. Mike 1 000531 Nate Malone From:TRS <crisp@trs-integrity.com> Sent:Wednesday, June 5, 2013 5:03 PM To:Iwen Subject:June 2013 Update Attachments:June 2013 Renton Update.odt Hi Iwen, Here is the update for June 2013. Let me know if you have any questions. Also, let me know if you would like us to do TracFone. After doing a lot of research on this company, I believe this would be a good audit to do for the City of Renton. Thanks Iwen. Have a good afternoon. Mike 1 000531 July 5, 2013 Audit/Tax Investigation Update - Renton (253) 223-4986 1902 157th St. E. Tacoma, WA 98445 TRS@Integritycorn 000001 July 5, 2013 Audit/Tax Investigation Update - Renton (253) 223-4986 1902 157th St. E. Tacoma, WA 98445 TRS@Integritycorn 000001 TracFone Wireless, Inc. The City of Renton has asked TRS to conduct an audit on TracFone. TracFone is a prepaid wireless service provider operating in the United States and is a subsidiary of Amaerica Movil. TracFone Wireless, Inc. offers its wireless products under multiple brands which each also offer distinctive service plans, the brands include TracFone, NET10 Wireless, Straight Talk, Telcel America and Simple Mobile. TRS sent an email dated June 6, 2013 to TracFone informing them that our company would be conducting an audit on their company. The City of Renton sent a letter dated June TracFone Wireless, Inc. The City of Renton has asked TRS to conduct an audit on TracFone. TracFone is a prepaid wireless service provider operating in the United States and is a subsidiary of Amaerica Movil. TracFone Wireless, Inc. offers its wireless products under multiple brands which each also offer distinctive service plans, the brands include TracFone, NETIO Wireless, Straight Talk, Telcel America and Simple Mobile. TRS sent an email dated June 6, 2013 to TracFone informing them that our company would be conducting an audit on their company. The City of Renton sent a letter to TracFone informing them that TRS has been contracted by the City to conduct an audit on their company. TRS received a call from Mr. John Cavalieri of TracFone on June 20, 2013 stating that he would need us to sign a Non -Disclosure Agreement (NDA). Mr. Cavalieri said he would prepare the NDA and send us a copy. In addition, Mr. Cavalieri asked us to send him a (253) 223-4986 1902 157th St. E. Tacoma, WA 98445 TRS@Integrity.com 000002 TracFone Wireless, Inc. The City of Renton has asked TRS to conduct an audit on TracFone. TracFone is a prepaid wireless service provider operating in the United States and is a subsidiary of Amaerica Movil. TracFone Wireless, Inc. offers its wireless products under multiple brands which each also offer distinctive service plans, the brands include TracFone, NET10 Wireless, Straight Talk, Telcel America and Simple Mobile. TRS sent an email dated June 6, 2013 to TracFone informing them that our company would be conducting an audit on their company. The City of Renton sent a letter dated June TracFone Wireless, Inc. The City of Renton has asked TRS to conduct an audit on TracFone. TracFone is a prepaid wireless service provider operating in the United States and is a subsidiary of Amaerica Movil. TracFone Wireless, Inc. offers its wireless products under multiple brands which each also offer distinctive service plans, the brands include TracFone, NETIO Wireless, Straight Talk, Telcel America and Simple Mobile. TRS sent an email dated June 6, 2013 to TracFone informing them that our company would be conducting an audit on their company. The City of Renton sent a letter to TracFone informing them that TRS has been contracted by the City to conduct an audit on their company. TRS received a call from Mr. John Cavalieri of TracFone on June 20, 2013 stating that he would need us to sign a Non -Disclosure Agreement (NDA). Mr. Cavalieri said he would prepare the NDA and send us a copy. In addition, Mr. Cavalieri asked us to send him a (253) 223-4986 1902 157th St. E. Tacoma, WA 98445 TRS@Integrity.com 000002 copy of the contract between the City of Renton and TRS. TRS sent a copy of the contract between the City of Renton and TRS on June 28, 2013. In addition, TRS sent the initial information that we will need for the audit. These items include: L A chart of accounts for all revenues including inside the City of Renton with a breakout of what is intrastate and what is interstate. 1. A breakout (including all back-up information) of how TracFone pays taxes to the City of Renton (using March 2008, June of 2010 and September of 2012 tax return as a sampling). This would include a list of all revenues totaling the gross amount made in the City of Renton and any deductions. 2. Invoices for March of 2008, June of 2010 and September of 2012. Go ahead and edit out any personal customer information. 3. Copies of tax returns for January 1, 2007 through March 31, 2013. 4. Sales revenues for prepaid cards 5. Revenues for recharge of prepaid cards TRS received the NDA from Mr. Cavalieri on July 3, 2013. TRS will review the NDA and get back with TracFone with any changes. TRS received a call from Mr. John Cavalieri of TracFone on June 20, 2013 stating that he would need us to sign a Non -Disclosure Agreement (NDA). Mr. Cavalieri said he would prepare the NDA and send us a copy. In addition, Mr. Cavalieri asked us to send him a copy of the contract between the City of Renton and TRS. TRS sent a copy of the contract between the City of Renton and TRS on June 28, 2013. In addition, TRS sent the initial information that we will need for the audit. These items include: A chart of accounts for all revenues including inside the City of Renton with a breakout of what is intrastate and what is interstate. A breakout (including all back-up information) of how TracFone pays taxes to the City of Renton (using March 2008, June of 2010 and September of 2012 tax return as a sampling). This would include a list of all revenues totaling the gross amount made in the City of Renton and any deductions. Invoices for March of 2008, June of 2010 and September of 2012. Go ahead and edit out any personal customer information. Copies of tax returns for January 1, 2007 through March 31, 2013. Sales revenues for prepaid cards Revenues for recharge of prepaid cards TRS received the NDA from Mr. Cavalieri on July 3, 2013. TRS will review the NDA and get back with TracFone with any changes. (253) 223-4986 1902 157th St. E. Tacoma, WA 98445 TRS@Integrity.corn 000003 copy of the contract between the City of Renton and TRS. TRS sent a copy of the contract between the City of Renton and TRS on June 28, 2013. In addition, TRS sent the initial information that we will need for the audit. These items include: L A chart of accounts for all revenues including inside the City of Renton with a breakout of what is intrastate and what is interstate. 1. A breakout (including all back-up information) of how TracFone pays taxes to the City of Renton (using March 2008, June of 2010 and September of 2012 tax return as a sampling). This would include a list of all revenues totaling the gross amount made in the City of Renton and any deductions. 2. Invoices for March of 2008, June of 2010 and September of 2012. Go ahead and edit out any personal customer information. 3. Copies of tax returns for January 1, 2007 through March 31, 2013. 4. Sales revenues for prepaid cards 5. Revenues for recharge of prepaid cards TRS received the NDA from Mr. Cavalieri on July 3, 2013. TRS will review the NDA and get back with TracFone with any changes. TRS received a call from Mr. John Cavalieri of TracFone on June 20, 2013 stating that he would need us to sign a Non -Disclosure Agreement (NDA). Mr. Cavalieri said he would prepare the NDA and send us a copy. In addition, Mr. Cavalieri asked us to send him a copy of the contract between the City of Renton and TRS. TRS sent a copy of the contract between the City of Renton and TRS on June 28, 2013. In addition, TRS sent the initial information that we will need for the audit. These items include: A chart of accounts for all revenues including inside the City of Renton with a breakout of what is intrastate and what is interstate. A breakout (including all back-up information) of how TracFone pays taxes to the City of Renton (using March 2008, June of 2010 and September of 2012 tax return as a sampling). This would include a list of all revenues totaling the gross amount made in the City of Renton and any deductions. Invoices for March of 2008, June of 2010 and September of 2012. Go ahead and edit out any personal customer information. Copies of tax returns for January 1, 2007 through March 31, 2013. Sales revenues for prepaid cards Revenues for recharge of prepaid cards TRS received the NDA from Mr. Cavalieri on July 3, 2013. TRS will review the NDA and get back with TracFone with any changes. (253) 223-4986 1902 157th St. E. Tacoma, WA 98445 TRS@Integrity.corn 000003 (253) 223-4986 1902 157th St. E. Tacoma, WA 98445 TRS@Integrity.com 000004 (253) 223-4986 1902 157th St. E. Tacoma, WA 98445 TRS@Integrity.com 000004 r 4 Nate Malone From:Iwen Wang <iwang@rentonwa.gov> Sent:Thursday, June 13, 2013 11:40 AM To:'TRS' Subject:RE: TracFone Attachments:2012 Utility Tax.xls I didn't go either. I am okay with conducting TracFone audit. We have not seen returns from them for a while. Also, on.. audit, I think Hai mentioned to you that we are unable to find that we have received September 2007 return or payment from them. Can you follow up with them on that as soon as possible and in advance of actual audit which could take a while to conclude. Iwen Wang Administrative Services Administrator City of Renton (425) 430-6858 lwang@rentonwa.gov RENTC)1\i From:TRS [mailto:crisp©trs-integrity.com] Sent:Thursday, June 13, 2013 11:06 AM To:Iwen Wang Subject:TracFone Hi Iwen, Hope things have been going great for you.I was hoping to attend the Tax Round Table meeting yesterday, but I was unable to attend. I also wanted to check and see if you have had a chance to think about TRS doing an audit on TracFone. I think this should be a good audit to do. Have a great day. Thanks, Mike 1 000533 r 4 Nate Malone From:Iwen Wang <iwang@rentonwa.gov> Sent:Thursday, June 13, 2013 11:40 AM To:'TRS' Subject:RE: TracFone Attachments:2012 Utility Tax.xls I didn't go either. I am okay with conducting TracFone audit. We have not seen returns from them for a while. Also, on.. audit, I think Hai mentioned to you that we are unable to find that we have received September 2007 return or payment from them. Can you follow up with them on that as soon as possible and in advance of actual audit which could take a while to conclude. Iwen Wang Administrative Services Administrator City of Renton (425) 430-6858 lwang@rentonwa.gov RENTC)1\i From:TRS [mailto:crisp©trs-integrity.com] Sent:Thursday, June 13, 2013 11:06 AM To:Iwen Wang Subject:TracFone Hi Iwen, Hope things have been going great for you.I was hoping to attend the Tax Round Table meeting yesterday, but I was unable to attend. I also wanted to check and see if you have had a chance to think about TRS doing an audit on TracFone. I think this should be a good audit to do. Have a great day. Thanks, Mike 1 000533 Nate Malone From:Iwen Wang <iwang@rentonwa.gov> Sent:Thursday, June 13, 2013 11:40 AM To:'TRS' Subject:RE: TracFone Attachments:2012 Utility Tax.xls I didn't go either. I am okay with conducting TracFone audit. We have not seen returns from them for a while. Also, on audit, I think Hai mentioned to you that we are unable to find that we have received September 2007 return or payment from them. Can you follow up with them on that as soon as possible and in advance of actual audit which could take a while to conclude. Iwen Wang Administrative Services Administrator City of Renton (425) 430-6858 lwang@rentonwa.gov RENT()N From: TRS [mailto:crisp@trs-integrity.com] Sent: Thursday, June 13, 2013 11:06 AM To: Iwen Wang Subject: TracFone Hi Iwen, Hope things have been going great for you.I was hoping to attend the Tax Round Table meeting yesterday, but I was unable to attend. I also wanted to check and see if you have had a chance to think about TRS doing an audit on TracFone.I think this should be a good audit to do. Have a great day. Thanks, Mike Exhibit Witness TV1.ctt Date jtIG Buell Realtirne Reporting 2061 2S7-9066 000533 Nate Malone From:Iwen Wang <iwang@rentonwa.gov> Sent:Thursday, June 13, 2013 11:40 AM To:'TRS' Subject:RE: TracFone Attachments:2012 Utility Tax.xls I didn't go either. I am okay with conducting TracFone audit. We have not seen returns from them for a while. Also, on audit, I think Hai mentioned to you that we are unable to find that we have received September 2007 return or payment from them. Can you follow up with them on that as soon as possible and in advance of actual audit which could take a while to conclude. Iwen Wang Administrative Services Administrator City of Renton (425) 430-6858 lwang@rentonwa.gov RENT()N From: TRS [mailto:crisp@trs-integrity.com] Sent: Thursday, June 13, 2013 11:06 AM To: Iwen Wang Subject: TracFone Hi Iwen, Hope things have been going great for you.I was hoping to attend the Tax Round Table meeting yesterday, but I was unable to attend. I also wanted to check and see if you have had a chance to think about TRS doing an audit on TracFone.I think this should be a good audit to do. Have a great day. Thanks, Mike Exhibit Witness TV1.ctt Date jtIG Buell Realtirne Reporting (20612J7-9066 000533 Denis Law Mayor February 21, 2014 John Cavalieri Senior Manager, Tax TracFone Wireless, Inc. 9700 112th Avenue, Miami, FL 33178 Dear Mr. Cavalier': City of Administrative Services lwen Wang, Administrator The City of Renton has contracted with Tax Recovery Services, LLC (TRS) to perform a tax audit on TracFone Wireless, Inc. Renton Municipal Code under 5-11-1 states in part that: "In addition to the license fees provided elsewhere in this Title, there is hereby levied upon and shall be collected from the business enterprises engaged in certain business activities and occupations described in this Section, taxes in the amounts to be determined by the application of the rates herein stated against gross income. " TRS will act as a limited agent for the City of Renton to assess taxes that are due to the City of Renton. The City of Renton requests that your company allow TRS to examine your books during appropriate business time and work with your company representativesto complete the audit. Per our agreement with TRS, TRS is required by law to follow the confidentiality provisions under Renton Municipal Code 5-5-6 and has agreed to maintain any tax information received in completing tax audits in the strictest confidence. If you have any questions, I can be reached at (425) 430-6858, or you can contact Mr. Michael Crisp of TRS at (253) 223-4986. Sincerely, n Wang Finance and Techn City of Renton ogy Administrator Renton City Hall 1055 South Grady Way Renton,Washington 98057 rentonwa.gov 000974 Denis Law Mayor February 21, 2014 John Cavalieri Senior Manager, Tax TracFone Wireless, Inc. 9700 112th Avenue, Miami, FL 33178 Dear Mr. Cavalier': City of Administrative Services lwen Wang, Administrator The City of Renton has contracted with Tax Recovery Services, LLC (TRS) to perform a tax audit on TracFone Wireless, Inc. Renton Municipal Code under 5-11-1 states in part that: "In addition to the license fees provided elsewhere in this Title, there is hereby levied upon and shall be collected from the business enterprises engaged in certain business activities and occupations described in this Section, taxes in the amounts to be determined by the application of the rates herein stated against gross income. " TRS will act as a limited agent for the City of Renton to assess taxes that are due to the City of Renton. The City of Renton requests that your company allow TRS to examine your books during appropriate business time and work with your company representativesto complete the audit. Per our agreement with TRS, TRS is required by law to follow the confidentiality provisions under Renton Municipal Code 5-5-6 and has agreed to maintain any tax information received in completing tax audits in the strictest confidence. If you have any questions, I can be reached at (425) 430-6858, or you can contact Mr. Michael Crisp of TRS at (253) 223-4986. Sincerely, n Wang Finance and Techn City of Renton ogy Administrator Renton City Hall 1055 South Grady Way Renton,Washington 98057 rentonwa.gov 000974 Nate Malone From:TRS <crisp@trs-integrity.com> Sent:Friday, June 30, 2017 3:41 PM To:Jan Hawn Subject:TracFone Schedules Attachments:ExcelPrelimRenton Tracfone.xls; Renton TracFone Methodology.doc Hi Jan, Hope you are doing well and enjoying the sunshine. Here is a copy of the TracFone tax schedules and the methodology of how we did the audit. Below is the explanation that will help you navigate how, what and why we have done them this way: So much of this audit had to be estimated; the information we needed was not available, so we estimated the data we needed by using data they actually had collected. If you have questions on the schedules, since they are much more complicated than typical ones, the Methodology sheet should help. To read the schedules: 1. Notice that the Original Tax Reported Sheet is blank. No tax was reported. That part is easy! 2. The Unreported Revenue Sheet has columns defined on the Methodology sheet, but to simplify: -The Non -Direct Sales column D is calculated by multiplying all the Direct Sales (sum of next 4 columns) times proportions given to us by TracFone. -Page Plus Air and Page Plus don't show up until 2014 so those columns are empty. -The actual Billing Platform Sales and APP Direct Sales values that were given to us from TracFone are listed in columns U and V. -Columns U and V are read into columns D and H and reduced by the factors explained on the chart that is found in columns J through Z. 3. The rest of how the charts work you are familiar with. Also, this audit stops in May of 2013, and TracFone wanted us to stay within the original audit period. The revenues have been increasing greatly over the years, so if we open another audit to recover the rest of it, the second audit would probably be about the same amount as this one if not more. Also, have you had a chance to review our proposal of conducting an audit on do believe that this audit would be a very good audit for the City of Renton. Let us know if you have any questions. Thanks Jan. Have a great weekend. Mike 1 000634 Nate Malone From:TRS <crisp@trs-integrity.com> Sent:Friday, June 30, 2017 3:41 PM To:Jan Hawn Subject:TracFone Schedules Attachments:ExcelPrelimRenton Tracfone.xls; Renton TracFone Methodology.doc Hi Jan, Hope you are doing well and enjoying the sunshine. Here is a copy of the TracFone tax schedules and the methodology of how we did the audit. Below is the explanation that will help you navigate how, what and why we have done them this way: So much of this audit had to be estimated; the information we needed was not available, so we estimated the data we needed by using data they actually had collected. If you have questions on the schedules, since they are much more complicated than typical ones, the Methodology sheet should help. To read the schedules: 1. Notice that the Original Tax Reported Sheet is blank. No tax was reported. That part is easy! 2. The Unreported Revenue Sheet has columns defined on the Methodology sheet, but to simplify: -The Non -Direct Sales column D is calculated by multiplying all the Direct Sales (sum of next 4 columns) times proportions given to us by TracFone. -Page Plus Air and Page Plus don't show up until 2014 so those columns are empty. -The actual Billing Platform Sales and APP Direct Sales values that were given to us from TracFone are listed in columns U and V. -Columns U and V are read into columns D and H and reduced by the factors explained on the chart that is found in columns J through Z. 3. The rest of how the charts work you are familiar with. Also, this audit stops in May of 2013, and TracFone wanted us to stay within the original audit period. The revenues have been increasing greatly over the years, so if we open another audit to recover the rest of it, the second audit would probably be about the same amount as this one if not more. Also, have you had a chance to review our proposal of conducting an audit on do believe that this audit would be a very good audit for the City of Renton. Let us know if you have any questions. Thanks Jan. Have a great weekend. Mike 1 000634 This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. 2 000635 This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. 2 000635 TracFone Audit Methodology Methodology (Note: For definitions of terms used, see Definition section below) Usual data is not collected by TracFone: We have found that typically, for prepaid telephone UUT taxes, a company collects usage information for the entire state, and applies a percentage ratio found by comparing the number of customers from a specific city to Washington State usage in order to calculate the total owed to the specific city. But TracFone only collects information on sales, not on usage, and they don't track the number of customers they have in each municipality. Why sales and not usage is used in the estimate: While it is true that taxation of this prepaid phone activity is properly owed on usage, not sales, usage figures are not available from TracFone, so an estimate must be made via sales, which approximates usage. We would like to stress here that taxes are not being levied on sales, but rather sales are being used as a method to estimate usage. How the taxable usage was estimated for direct sales (Billing Platform Sales and APP Sales): TracFone doesn't collect sales information for particular cities, either. What they do collect is sales information for zip codes. So our first step was to collect and sum up the direct -sales information for the city's zip codes, then we reduced the zip code sales sum by a percentage ratio found by comparing population of the city to the sum of the zip codes populations. Direct sales were further reduced by percentages that removed data sales and interstate and international calls from the total, resulting in amounts that would represent a good estimate of direct -sales -related taxable utility usage. However, this only gave us an idea of city taxable revenues for direct sales to TracFone, and the larger proportion of TracFone customers buy indirectly from TracFone, via outside carriers such as Walmart. Estimation of non -direct sales (sold through outside carriers): In order to estimate the amount of non -direct sales (and thus usage) that the company collects from city customers, it was necessary for us to turn to information from TracFone company -wide sales figures (more localized data was unavailable). We checked that the data for company -wide direct and non -direct sales included basically the same types of items, and came up with a ratio to estimate how much direct vs. non -direct sales were occurring (and thereby estimate usage from the non -direct sales). Summing direct sales (these numbers were figured using the direct -sales amounts, which were already reduced by percentages that removed data, interstate and international usage), the non- direct/direct revenues ratio was then applied to produce the taxable non -direct sales usage estimate. Finding total taxable revenue: Total taxable revenue was found 1) by summing up direct sales from internet sales and billing platform sales (reduced by percentages that removed data, interstate and international usage), and 000636 TracFone Audit Methodology Methodology (Note: For definitions of terms used, see Definition section below) Usual data is not collected by TracFone: We have found that typically, for prepaid telephone UUT taxes, a company collects usage information for the entire state, and applies a percentage ratio found by comparing the number of customers from a specific city to Washington State usage in order to calculate the total owed to the specific city. But TracFone only collects information on sales, not on usage, and they don't track the number of customers they have in each municipality. Why sales and not usage is used in the estimate: While it is true that taxation of this prepaid phone activity is properly owed on usage, not sales, usage figures are not available from TracFone, so an estimate must be made via sales, which approximates usage. We would like to stress here that taxes are not being levied on sales, but rather sales are being used as a method to estimate usage. How the taxable usage was estimated for direct sales (Billing Platform Sales and APP Sales): TracFone doesn't collect sales information for particular cities, either. What they do collect is sales information for zip codes. So our first step was to collect and sum up the direct -sales information for the city's zip codes, then we reduced the zip code sales sum by a percentage ratio found by comparing population of the city to the sum of the zip codes populations. Direct sales were further reduced by percentages that removed data sales and interstate and international calls from the total, resulting in amounts that would represent a good estimate of direct -sales -related taxable utility usage. However, this only gave us an idea of city taxable revenues for direct sales to TracFone, and the larger proportion of TracFone customers buy indirectly from TracFone, via outside carriers such as Walmart. Estimation of non -direct sales (sold through outside carriers): In order to estimate the amount of non -direct sales (and thus usage) that the company collects from city customers, it was necessary for us to turn to information from TracFone company -wide sales figures (more localized data was unavailable). We checked that the data for company -wide direct and non -direct sales included basically the same types of items, and came up with a ratio to estimate how much direct vs. non -direct sales were occurring (and thereby estimate usage from the non -direct sales). Summing direct sales (these numbers were figured using the direct -sales amounts, which were already reduced by percentages that removed data, interstate and international usage), the non- direct/direct revenues ratio was then applied to produce the taxable non -direct sales usage estimate. Finding total taxable revenue: Total taxable revenue was found 1) by summing up direct sales from internet sales and billing platform sales (reduced by percentages that removed data, interstate and international usage), and 000636 2) by adding in non -direct sales found by summing taxable direct usage estimates and applying the percentage of company -wide non -direct vs. direct sales. Finding population proportion: Population percentage is the percentage which compares city population and zip code populations, which is used to reduce the sales figures for the zip codes down to approximate city -only sales. City populations are available yearly, but we needed to use census years in order to get the zip code populations. Because of this, we used the most recent census, 2010, to calculate the population percentages. While this was reasonably accurate post -annexation, the large 2010 Renton annexation would impact the proportion, overestimating the proportion for years previous to the annexation. So for years before 2010, we calculated zip code change for one year by using change since 2000 divided by 10, in order to get a zip population sum for 2009 to compare with the 2009 city population. This new proportion was then applied previous to 2010. Note: For the years previous to given information, estimates were used as follows: -For data, percent values were increasing drastically every year, increasing nearly 36% in four years, starting low in 2010 at 3.96%. Because of this, data percentage was presumed to be zero previous to 2010. -For intrastate percentage, the percentages were rather constant throughout the audit, showing a slight downward trend, dropping only 4 percentage points in 4 years, so the earliest year value available of 84.07% was used previous to 2009. Available information Zip code specific sales data for direct sales only: APP sales by zip code for each month Billing Platform sales by zip code for each month Accessory sales by zip code for each month Company -wide data showing non -direct and direct sales amounts and proportions Percent of sales representing data for years 2010 to 2014 Percent of sales representing intra-state calling from years 2009 to 2014 Missing information Usage data at any level Local data showing non -direct sales or usage City -specific sales or usage figures Definitions Direct sales: The Billing Platform, Internet Sales, and Telephone Sales shown on the excel format reports 000637 2) by adding in non -direct sales found by summing taxable direct usage estimates and applying the percentage of company -wide non -direct vs. direct sales. Finding population proportion: Population percentage is the percentage which compares city population and zip code populations, which is used to reduce the sales figures for the zip codes down to approximate city -only sales. City populations are available yearly, but we needed to use census years in order to get the zip code populations. Because of this, we used the most recent census, 2010, to calculate the population percentages. While this was reasonably accurate post -annexation, the large 2010 Renton annexation would impact the proportion, overestimating the proportion for years previous to the annexation. So for years before 2010, we calculated zip code change for one year by using change since 2000 divided by 10, in order to get a zip population sum for 2009 to compare with the 2009 city population. This new proportion was then applied previous to 2010. Note: For the years previous to given information, estimates were used as follows: -For data, percent values were increasing drastically every year, increasing nearly 36% in four years, starting low in 2010 at 3.96%. Because of this, data percentage was presumed to be zero previous to 2010. -For intrastate percentage, the percentages were rather constant throughout the audit, showing a slight downward trend, dropping only 4 percentage points in 4 years, so the earliest year value available of 84.07% was used previous to 2009. Available information Zip code specific sales data for direct sales only: APP sales by zip code for each month Billing Platform sales by zip code for each month Accessory sales by zip code for each month Company -wide data showing non -direct and direct sales amounts and proportions Percent of sales representing data for years 2010 to 2014 Percent of sales representing intra-state calling from years 2009 to 2014 Missing information Usage data at any level Local data showing non -direct sales or usage City -specific sales or usage figures Definitions Direct sales: The Billing Platform, Internet Sales, and Telephone Sales shown on the excel format reports 000637 submitted to TRS, also called by TracFone "retail sales" amounts. These amounts are from customer purchases made via the internet (i.e., the TracFone's website) and over the phone. Refills of airtime that a customer can purchase via the internet (i.e., the TracFone's website), and over the phone are included in the Billing Platform and Internet Sales retail reports. Non -Direct sales: TracFone refers to these sales as "wholesale," as they are sales made through outside carriers such as Walmart. On the company -wide data chart TRS received from TracFone, these were referred to as "net airtime sales." Internet sales, APP sales: The Alternative Payment Plan ("APP") is TracFone's credit card transaction interface for retail sales. Under the APP, customers engage in one-time credit card based transactions via the internet or phone. APP based customer transactions are consummated predominantly via the internet. Furthermore, any TracFone plan program which is not available to be set up for an automated- recurring charge gets processed through APP. Note: Although internet sales are not taxable, for this audit, internet sales are simply used to estimate usage, which is taxable. Billing Platform: The Billing Platform ("BP") is a supplement to the Alternative Payment Plan ("APP") to provide a system for automated -recurring charges. Customers can make a one-time purchase or enroll into programs available for automated or recurring charges, most of which include airtime on a monthly (30 day) basis. Accessories: Mobile phone accessories include any hardware or software that is not integral to the operation of a mobile phone as designed by the manufacturer. Note: Accessories are not taxable under the city utility tax laws, and were not included in taxable amounts for this audit. Data usage: The transmission of data via cellphone. Also called "mobile data" and a separate service from voice calling, cellular data is used for e-mail, Web pages, media and app downloads and software updates. Text messaging (SMS) is also a different service. Note: Data usage is not taxable under the city utility tax laws, and was removed from taxable amounts for this audit. Example of estimating Non -direct Sales from Direct Sales using percent data from TracFone 2010: Proportion from TracFone: Non -direct Sales = .83 x all sales ;Direct Sales = .17 x all sales Thus: Therefore: Non -direct Sales = .83 x all sales ;Non -direct Sales = .83 ; Direct Sales .17 x all sales Direct Sales .17 Non -direct Sales = Direct Sales x .83/.17 000638 submitted to TRS, also called by TracFone "retail sales" amounts. These amounts are from customer purchases made via the internet (i.e., the TracFone's website) and over the phone. Refills of airtime that a customer can purchase via the internet (i.e., the TracFone's website), and over the phone are included in the Billing Platform and Internet Sales retail reports. Non -Direct sales: TracFone refers to these sales as "wholesale," as they are sales made through outside carriers such as Walmart. On the company -wide data chart TRS received from TracFone, these were referred to as "net airtime sales." Internet sales, APP sales: The Alternative Payment Plan ("APP") is TracFone's credit card transaction interface for retail sales. Under the APP, customers engage in one-time credit card based transactions via the internet or phone. APP based customer transactions are consummated predominantly via the internet. Furthermore, any TracFone plan program which is not available to be set up for an automated- recurring charge gets processed through APP. Note: Although internet sales are not taxable, for this audit, internet sales are simply used to estimate usage, which is taxable. Billing Platform: The Billing Platform ("BP") is a supplement to the Alternative Payment Plan ("APP") to provide a system for automated -recurring charges. Customers can make a one-time purchase or enroll into programs available for automated or recurring charges, most of which include airtime on a monthly (30 day) basis. Accessories: Mobile phone accessories include any hardware or software that is not integral to the operation of a mobile phone as designed by the manufacturer. Note: Accessories are not taxable under the city utility tax laws, and were not included in taxable amounts for this audit. Data usage: The transmission of data via cellphone. Also called "mobile data" and a separate service from voice calling, cellular data is used for e-mail, Web pages, media and app downloads and software updates. Text messaging (SMS) is also a different service. Note: Data usage is not taxable under the city utility tax laws, and was removed from taxable amounts for this audit. Example of estimating Non -direct Sales from Direct Sales using percent data from TracFone 2010: Proportion from TracFone: Non -direct Sales = .83 x all sales ;Direct Sales = .17 x all sales Thus: Therefore: Non -direct Sales = .83 x all sales ;Non -direct Sales = .83 ; Direct Sales .17 x all sales Direct Sales .17 Non -direct Sales = Direct Sales x .83/.17 000638 Period of Adjustments: Firm Name: Business Address: City of Renton, Washington Department of Finance Field Auditor's Report SUMMARY SHEET January 01, 2007 through May 31, 2013 Tracfone Wireless Tax Department 9700 NW 112th Avenue Miami, FL 33178 ATTN:Nicholas Ford, Sr. Tax Manager Registration Classes 2007 2008 2009 2010 2011 2012 2013 2014 2015 TOTAL UTILITY TAX 0 Rounding Corrected Tax 0 Reported Tax 0 DEBIT/(CRE 0 0 0 0 0 0 0 0 0 0 0 Date:Audit submitted by: Michael J. Crisp REMARKS:YEARLY YEAR INTEREST DR/(CR) 2007 2008 2009 2010 2011 2012 2013 0 Total Interest Dr(Cr): Total Tax (Shown Above) DR/(CR) Total Penalty (Per Calc Sheet) Dr./(Cr,) Total Due Extensions Dr. Noted Date Reviewer Cr. Noted Date Code Classif.Hours TOTALS 0 0 0 000639 Period of Adjustments: Firm Name: Business Address: City of Renton, Washington Department of Finance Field Auditor's Report SUMMARY SHEET January 01, 2007 through May 31, 2013 Tracfone Wireless Tax Department 9700 NW 112th Avenue Miami, FL 33178 ATTN:Nicholas Ford, Sr. Tax Manager Registration Classes 2007 2008 2009 2010 2011 2012 2013 2014 2015 TOTAL UTILITY TAX 0 Rounding Corrected Tax 0 Reported Tax 0 DEBIT/(CRE 0 0 0 0 0 0 0 0 0 0 0 Date:Audit submitted by: Michael J. Crisp REMARKS:YEARLY YEAR INTEREST DR/(CR) 2007 2008 2009 2010 2011 2012 2013 0 Total Interest Dr(Cr): Total Tax (Shown Above) DR/(CR) Total Penalty (Per Calc Sheet) Dr./(Cr,) Total Due Extensions Dr. Noted Date Reviewer Cr. Noted Date Code Classif.Hours TOTALS 0 0 0 000639 Ij ; I ti is I I : I II is I Ij ; I ti is I I : I II is I flinliMIIIMIME:(111::1 1101111111.811111,tailinn.....i .,.iPiioqiMirtlin *}; Inl;,!i;!Mill!i;',1!liniiii:.;iliM11,;i1Tiiiii!iiiiiiiill;.a ,IF I i II WI- a It%I ! I :1 4i1 i 1 ..._ I I .4 ,tli ! I .11 111 :11:."111 1111,4 II,I, miii .1 VII INlill PIIIIMIMMIllildllithhilgillitlinalgirt 111...,:;I:aminpalinomoimionilammt" Illemosem'llimillionsiosimollomunillismimill flinliMIIIMIME:(111::1 1101111111.811111,tailinn.....i .,.iPiioqiMirtlin *}; Inl;,!i;!Mill!i;',1!liniiii:.;iliM11,;i1Tiiiii!iiiiiiiill;.a ,IF I i II WI- a It%I ! I :1 4i1 i 1 ..._ I I .4 ,tli ! I .11 111 :11:."111 1111,4 II,I, miii .1 VII INlill PIIIIMIMMIllildllithhilgillitlinalgirt 111...,:;I:aminpalinomoimionilammt" Illemosem'llimillionsiosimollomunillismimill .1::-- ',It,41,ifflio In .1::-- ',It,41,ifflio In "Providing cities with experienced research and auditing services" August 4, 2017 Audit/Tax Investigation Update - Renton LLC TracFone Wireless, Inc. On July 26, 2017, TRS received the following email from Mr. Ford of TracFone: As far as your methodology goes, yes we do anticipate that we will have questions but think it is better we put that on the agenda for our meeting so that we could walk through it in conjunction with your estimate, as well as ask questions. On July 28, 2017, TRS sent the following email to the City of Renton: We received an email from Mr. Ford, and he said he did have some questions about the methodology and would like to have a meeting: As far as your methodology goes, yes we do anticipate that we will have questions but think it is better we put that on the agenda for our meeting so that we could walk through it in conjunction with your estimate, as well as ask questions. So as you can see, they would like to get together for a meeting to review the methodology. But I would suggest that we instead send TracFone a copy of the tax schedules (if they look okay to you) and let them know that if they have any questions, they can send them to us by email and we can answer their questions electronically. And if they think a meeting is still necessary, we could consider it at that time. Let us know what you think. TRS then received the following email from the City of Renton: I am fine with your proposed approach. Thank you for the update. On August 4, 2017, TRS sent the following email to Mr. Ford of TracFone: I had a chance to talk with [the City Renton] and [they] have told me that they would like to send you a copy of the tax schedules for your review. They believe that having you first review the tax schedules and come up with questions by (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000122 W27 "Providing cities with experienced research and auditing services" August 4, 2017 Audit/Tax Investigation Update - Renton LLC TracFone Wireless, Inc. On July 26, 2017, TRS received the following email from Mr. Ford of TracFone: As far as your methodology goes, yes we do anticipate that we will have questions but think it is better we put that on the agenda for our meeting so that we could walk through it in conjunction with your estimate, as well as ask questions. On July 28, 2017, TRS sent the following email to the City of Renton: We received an email from Mr. Ford, and he said he did have some questions about the methodology and would like to have a meeting: As far as your methodology goes, yes we do anticipate that we will have questions but think it is better we put that on the agenda for our meeting so that we could walk through it in conjunction with your estimate, as well as ask questions. So as you can see, they would like to get together for a meeting to review the methodology. But I would suggest that we instead send TracFone a copy of the tax schedules (if they look okay to you) and let them know that if they have any questions, they can send them to us by email and we can answer their questions electronically. And if they think a meeting is still necessary, we could consider it at that time. Let us know what you think. TRS then received the following email from the City of Renton: I am fine with your proposed approach. Thank you for the update. On August 4, 2017, TRS sent the following email to Mr. Ford of TracFone: I had a chance to talk with [the City Renton] and [they] have told me that they would like to send you a copy of the tax schedules for your review. They believe that having you first review the tax schedules and come up with questions by (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000122 email would be the most efficient. Then if you still have more questions, or see something that we may need to adjust, we can consider talking over the telephone to walk you through any items that you are not sure about on how we came up with the estimate. Enclosed with this email you will find the tax schedules.The spreadsheets are pretty complex, since we had to approximate the taxable values using sales figures, and then reduce them by various factors. Here are some additional explanations that will make reading the schedules easier: 1. Notice that the Original Tax Reported Sheet is blank. No tax was reported. That part is easy! 2. The Unreported Revenue Sheet has columns defined on the Methodology sheet, but to simplify: -The Non -Direct Sales column D is calculated by multiplying all the Direct Sales (sum of next 4 columns) times proportions given to us by TracFone. -Page Plus Air and Page Plus don't show up until 2014 so those columns are mostly empty. -The actual Billing Platform Sales and APP Direct Sales values that were given to us from TracFone are listed in columns U and V. -Columns U and V are read into columns D and H and reduced by the factors explained on the chart that is found in columns J through Z. TRS will be following up with Mr. Ford concerning the audit. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000123 email would be the most efficient. Then if you still have more questions, or see something that we may need to adjust, we can consider talking over the telephone to walk you through any items that you are not sure about on how we came up with the estimate. Enclosed with this email you will find the tax schedules.The spreadsheets are pretty complex, since we had to approximate the taxable values using sales figures, and then reduce them by various factors. Here are some additional explanations that will make reading the schedules easier: 1. Notice that the Original Tax Reported Sheet is blank. No tax was reported. That part is easy! 2. The Unreported Revenue Sheet has columns defined on the Methodology sheet, but to simplify: -The Non -Direct Sales column D is calculated by multiplying all the Direct Sales (sum of next 4 columns) times proportions given to us by TracFone. -Page Plus Air and Page Plus don't show up until 2014 so those columns are mostly empty. -The actual Billing Platform Sales and APP Direct Sales values that were given to us from TracFone are listed in columns U and V. -Columns U and V are read into columns D and H and reduced by the factors explained on the chart that is found in columns J through Z. TRS will be following up with Mr. Ford concerning the audit. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000123 1 Nate Malone From:TRS <crisp@trs-integrity.com> Sent:Tuesday, August 8, 2017 2:36 PM To:Jan Hawn; Nate Malone Subject:Re: TracFone Schedules Attachments:ExcelPrelim3Renton Tracfone.xls; Renton TracFone3Methodology.doc Thanks, Jan. This was very helpful. I found a source online that gives estimates for zip codes for all the years of the audit, and using the population numbers on your chart, I calculated a population ratio specific for each year. This seems to be the most straight forward way, especially since there is a missing 2000 census value for 98057 (no one has it) and the 2000 census value for 98055 is so large (compared to 2010) it might be a combination of the 98055 and the 98057 zips. This new method is straight forward, as each number comes directly from a reference-able source. Hopefully this new method will work for TracFone. The estimates that this zip code site gives are a bit lower for census years than the census numbers, so the advantage is on the city's side. If TracFone is unhappy with this, we can feel good about giving a little to make them happy. It is, after all, an estimate, the best we can come up with. The new total due is $298,228.55. Thanks again, and let us know if you have any questions, and if this approach looks good to you. If you are good with it, I will send it on to TracFone. And let me know if it is okay if I reference your Comprehensive Annual Report. I would assume that it is a public document. Hope you have been having a great day. Tamara This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. From: Jan Hawn <JHawn@Rentonwa.gov> To: 'TRS' <crisp@trs-integrity.com>; Nate Malone <NMalone@Rentonwa.gov> Sent: Monday, August 7, 2017 4:26 PM Subject: RE: TracFone Schedules Hi Tamara, The population growth over the years can be found in Table 5 of our Comprehensive Annual Financial Report on p. 7-7 of the linked report. The current population is 102,700. I hope that helps. Jan 000665 2 From: TRS [mailto:crisp@trs-integrity.com] Sent: Monday, August 7, 2017 4:17 PM To: Jan Hawn <JHawn@Rentonwa.gov>; Nate Malone <NMalone@Rentonwa.gov> Subject: TracFone Schedules Hi Jan and Nate, We have been looking harder at the population proportion calculations for Renton, and something has come up with how they were calculated. It turns out that the population sizes for various years for Renton that are found between census years online are not very correct at all. These online population figures show a very smooth, slight upward climb and then a bounce in 2010. But it turns out that the significant population bump for Renton occurred in 2008, when two large annexations were added. According to our records, the Benson Hill annexation added 16,272 residents, and the Aqua Barn annexation added another 2,200 new residents that same year. This means that the bump finally showing up during the census occurred two years earlier, but was not included in the more informal population counts used previous to the census. Because the population counts between censuses have proven so faulty, if it is alright with you, we would prefer to use only census years in our calculations. We have redone the schedules using the 2010 census's population proportion for 2008 onward, and the 2000 census population proportion for 2007. We believe that this would be a much more accurate approach to the estimation. But before we send this on to TracFone, we would like you to check to see if any of the other annexations were large population-wise. The 2010 jump online is more like 30,000, of which the Benson Hill/Aqua Barn annexations account for about 2/3, and the remainder may be due to regular population growth and small annexations, but it also may be due to a large one or two we are not aware of. We know that there have been a lot of annexations over the course of the audit (2007 to 2013), but we want to include the really big ones in our choice of methodology. So if there is any light you could shed on this situation, we would appreciate the additional information. We have attached the adjusted schedules so that you can see the effect of the new procedure. Thanks Jan and Nate. Hope you have been enjoying the sunshine. Tamara This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. 000666 TracFone Audit Methodology Renton Methodology (Note: For definitions of terms used, see Definition section below) Usual data is not collected by TracFone: We have found that typically, for prepaid telephone UUT taxes, a company collects usage information for the entire state, and applies a percentage ratio found by comparing the number of customers from a specific city to Washington State usage in order to calculate the total owed to the specific city. But TracFone only collects information on sales, not on usage, and they don't track the number of customers they have in each municipality. Why sales and not usage is used in the estimate: While it is true that taxation of this prepaid phone activity is properly owed on usage, not sales, usage figures are not available from TracFone, so an estimate must be made via sales, which approximates usage. We would like to stress here that taxes are not being levied on sales, but rather sales are being used as a method to estimate usage. How the taxable usage was estimated for direct sales (Billing Platform Sales and APP Sales): TracFone doesn't collect sales information for particular cities, either. What they do collect is sales information for zip codes. So our first step was to collect and sum up the direct-sales information for the city's zip codes, then we reduced the zip code sales sum by a percentage ratio found by comparing population of the city to the sum of the zip codes populations. Direct sales were further reduced by percentages that removed data sales and interstate and international calls from the total, resulting in amounts that would represent a good estimate of direct-sales-related taxable utility usage. However, this only gave us an idea of city taxable revenues for direct sales to TracFone, and the larger proportion of TracFone customers buy indirectly from TracFone, via outside carriers such as Walmart. Estimation of non-direct sales (sold through outside carriers): In order to estimate the amount of non-direct sales (and thus usage) that the company collects from city customers, it was necessary for us to turn to information from TracFone company-wide sales figures (more localized data was unavailable). We checked that the data for company-wide direct and non-direct sales included basically the same types of items, and came up with a ratio to estimate how much direct vs. non-direct sales were occurring (and thereby estimate usage from the non-direct sales). Summing direct sales (these numbers were figured using the direct-sales amounts, which were already reduced by percentages that removed data, interstate and international usage), the non- direct/direct revenues ratio was then applied to produce the taxable non-direct sales usage estimate. Finding total taxable revenue: Total taxable revenue was found 1) by summing up direct sales from internet sales and billing platform sales (reduced by percentages that removed data, interstate and international usage), and 000667 2) by adding in non-direct sales found by summing taxable direct usage estimates and applying the percentage of company-wide non-direct vs. direct sales. Finding population proportion: Population percentage is the percentage which compares city population and zip code populations, which is used to reduce the sales figures for the zip codes down to approximate city-only sales. Unlike other cities, Renton experienced a myriad of annexations, many small and some quite large, during the audit period, making it hard to guess what their city population would be at each year compared to the normal population growth for the zip codes. But clearly, one proportion factor would not be accurate from year to year. TRS found a solution for this difficulty at a website that estimated the size of the Renton area zip code populations for each of the years of the audit, and, using the City of Renton's own yearly population figures to compare with these, calculated unique population proportions for each year. Note: For the years previous to given information, estimates were used as follows: -For data, percent values were increasing drastically every year, increasing nearly 36% in four years, starting low in 2010 at 3.96%. Because of this, data percentage was presumed to be zero previous to 2010. -For intrastate percentage, the percentages were rather constant throughout the audit, showing a slight downward trend, dropping only 4 percentage points in 4 years, so the earliest year value available of 84.07% was used previous to 2009. Available information Zip code specific sales data for direct sales only: APP sales by zip code for each month Billing Platform sales by zip code for each month Accessory sales by zip code for each month Company-wide data showing non-direct and direct sales amounts and proportions Percent of sales representing data for years 2010 to 2014 Percent of sales representing intra-state calling from years 2009 to 2014 Missing information Usage data at any level Local data showing non-direct sales or usage City-specific sales or usage figures Definitions Direct sales: 000668 The Billing Platform, Internet Sales, and Telephone Sales shown on the excel format reports submitted to TRS, also called by TracFone “retail sales” amounts. These amounts are from customer purchases made via the internet (i.e., the TracFone’s website) and over the phone. Refills of airtime that a customer can purchase via the internet (i.e., the TracFone’s website), and over the phone are included in the Billing Platform and Internet Sales retail reports. Non-Direct sales: TracFone refers to these sales as “wholesale,” as they are sales made through outside carriers such as Walmart. On the company-wide data chart TRS received from TracFone, these were referred to as “net airtime sales.” Internet sales, APP sales: The Alternative Payment Plan (“APP”) is TracFone’s credit card transaction interface for retail sales. Under the APP, customers engage in one-time credit card based transactions via the internet or phone. APP ba sed customer transactions are consummated predominantly via the internet. Furthermore, any TracFone plan program which is not available to be set up for an automated- recurring charge gets processed through APP. Note: Although internet sales are not taxable, for this audit, internet sales are simply used to estimate usage, which is taxable. Billing Platform: The Billing Platform (“BP”) is a supplement to the Alternative Payment Plan (“APP”) to provide a system for automated-recurring charges. Customers can make a one-time purchase or enroll into programs available for automated or recurring charges, most of which include airtime on a monthly (30 day) basis. Accessories: Mobile phone accessories include any hardware or software that is not integral to the operation of a mobile phone as designed by the manufacturer. Note: Accessories are not taxable under the city utility tax laws, and were not included in taxable amounts for this audit. Data usage: The transmission of data via cellphone. Also called "mobile data" and a separate service from voice calling, cellular data is used for e-mail, Web pages, media and app downloads and software updates. Text messaging (SMS) is also a different service. Note: Data usage is not taxable under the city utility tax laws, and was removed from taxable amounts for this audit. Example of estimating Non-direct Sales from Direct Sales using percent data from TracFone 2010: Proportion from TracFone: Non-direct Sales = .83 x all sales ; Direct Sales = .17 x all sales Thus: Non-direct Sales = .83 x all sales ; Non-direct Sales = .83 ; Direct Sales .17 x all sales Direct Sales .17 Therefore: Non-direct Sales = Direct Sales x .83/.17 000669 City of Renton, WashingtonRegistrationDepartment of FinanceField Auditor's ReportSUMMARY SHEETPeriod of Adjustments:January 01, 2007 through May 31, 2013Firm Name:Tracfone WirelessBusiness Address:Tax Department9700 NW 112th AvenueMiami, FL 33178Nicholas Ford, Sr. Tax ManagerClasses 2007 2008 2009 2010 2011 2012 2013 2014 2015 T O T A LUTILITY TAX0RoundingCorrected Tax0Reported Tax0DEBIT/(CRE00000000000 Date:Audit submitted by: Michael J. Crisp REMARKS:YEARLYYEARINTEREST DR/(CR)TOTALS20072008200920102011201220130Total Interest Dr(Cr):0Total Tax (Shown Above) DR/(CR)0Total Penalty (Per Calc Sheet) Dr./(Cr.)Total Due 0Extensions Dr. Noted DateReviewerCr. Noted DateCodeClassif. Hours0\C {GOTO}GG282~ Copy Recap. from Database.wk1 to this Combined.wk1/FCCNQ27..AG87~DATA1.WK1~{BRANCH \P}~\P {GETNUMBER "Enter Code fr.1 to 17 for Int.computed to last day shown on Table:-> ",CODE}{IF CODE=1}{BRANCH \A}{IF CODE=2}{BRANCH \B}{IF CODE=3}{BRANCH \T}{IF CODE=4}{BRANCH \D}{IF CODE=5}{BRANCH \E}{IF CODE=6}{BRANCH \F}{IF CODE=7}{BRANCH \S}{IF CODE=8}{BRANCH \G}{IF CODE=9}{BRANCH \H}{IF CODE=10}{BRANCH \I}{IF CODE=11}{BRANCH \K}{IF CODE=12}{BRANCH \L}{IF CODE=13}{BRANCH \M}{IF CODE=14}{BRANCH \N}{IF CODE=15}{BRANCH \Q}{IF CODE=16}{BRANCH \R}{IF CODE=17}{BRANCH \U}\A {LET DN203,.5645}Jan. 1/14{LET DP203,.5185}Jan. 1/14{LET DR203,.4739}Jan. 1/14{LET DT203,.4306}Jan. 1/14{LET DX203,.3885}Jan. 1/14{LET DZ203,.3477}Jan. 1/14{LET EB203,.3081}Jan. 1/14{LET ED203,.2696}Jan. 1/14{LET EH203,.2323}Jan. 1/14{LET EJ203,.1960}Jan. 1/14{LET EL203,.1609}Jan. 1/14{LET EN203,.1267}Jan. 1/14{LET ER203,.0936}Jan. 1/14{LET ET203,.0615}Jan. 1/14{LET EV203,.0303}Jan. 1/14{GOTO}FT248~\B {LET DN203,.5801}Jan.15/31{LET DP203,.5337}Jan.15/31{LET DR203,.4886}Jan.15/31{LET DT203,.4449}Jan.15/31{LET DX203,.4024}Jan.15/31{LET DZ203,.3612}Jan.15/31{LET EB203,.3212}Jan.15/31{LET ED203,.2823}Jan.15/31{LET EH203,.2446}Jan.15/31{LET EJ203,.2080}Jan.15/31{LET EL203,.1725}Jan.15/31{LET EN203,.1380}Jan.15/31{LET ER203,.1045}Jan.15/31{LET ET203,.0721}Jan.15/31{LET EV203,.0406}Jan.15/31000670 {GOTO}FT248~\D {LET DN203,.5959} Feb.15/Mar.14{LET DP203,.5490} Feb.15/Mar.14{LET DR203,.5035} Feb.15/Mar.14{LET DT203,.4593} Feb.15/Mar.14{LET DX203,.4164} Feb.15/Mar.14{LET DZ203,.3748} Feb.15/Mar.14{LET EB203,.3344} Feb.15/Mar.14{LET ED203,.2951} Feb.15/Mar.14{LET EH203,.2570} Feb.15/Mar.14{LET EJ203,.2201} Feb.15/Mar.14{LET EL203,.1842} Feb.15/Mar.14{LET EN203,.1494} Feb.15/Mar.14{LET ER203,.1155} Feb.15/Mar.14{LET ET203,.0828} Feb.15/Mar.14{LET EV203,.0510} Feb.15/Mar.14{LET EX203,.0201} Feb.15/Mar.14{GOTO}FT248~\E {LET DN203,.6119} Mar.15/Apr.14{LET DP203,.5645} Mar.15/Apr.14{LET DR203,.5185} Mar.15/Apr.14{LET DT203,.4739} Mar.15/Apr.14{LET DX203,.4306} Mar.15/Apr.14{LET DZ203,.3885} Mar.15/Apr.14{LET EB203,.3477} Mar.15/Apr.14{LET ED203,.3081} Mar.15/Apr.14{LET EH203,.2696} Mar.15/Apr.14{LET EJ203,.2323} Mar.15/Apr.14{LET EL203,.1960} Mar.15/Apr.14{LET EN203,.1609} Mar.15/Apr.14{LET ER203,.1267} Mar.15/Apr.14{LET ET203,.0936} Mar.15/Apr.14{LET EV203,.0615} Mar.15/Apr.14{LET EX203,.0303} Mar.15/Apr.14{GOTO}FT248~\F {LET DN203,.6280} Apr.15/30{LET DP203,.5801} Apr.15/30{LET DR203,.5337} Apr.15/30{LET DT203,.4886} Apr.15/30{LET DX203,.4449} Apr.15/30{LET DZ203,.4024} Apr.15/30{LET EB203,.3612} Apr.15/30{LET ED203,.3212} Apr.15/30{LET EH203,.2823} Apr.15/30{LET EJ203,.2446} Apr.15/30{LET EL203,.2080} Apr.15/30{LET EN203,.1725} Apr.15/30{LET ER203,.1380} Apr.15/30{LET ET203,.1045} Apr.15/30{LET EV203,.0721} Apr.15/30{LET EX203,.0406} Apr.15/30{GOTO}FT248~\G {LET DN203,.6443} May 15/June 14{LET DP203,.5959} May 15/June 14{LET DR203,.5490} May 15/June 14{LET DT203,.5035} May 15/June 14{LET DX203,.4593} May 15/June 14{LET DZ203,.4164} May 15/June 14{LET EB203,.3748} May 15/June 14{LET ED203,.3344} May 15/June 14{LET EH203,.2951} May 15/June 14{LET EJ203,.2570} May 15/June 14{LET EL203,.2201} May 15/June 14{LET EN203,.1842} May 15/June 14{LET ER203,.1494} May 15/June 14{LET ET203,.1155} May 15/June 14{LET EV203,.0828} May 15/June 14{LET EX203,.0510} May 15/June 14{LET FB203,.0201} May 15/June 14{GOTO}FT248~\H {LET DN203,.6607} June 15/July 14{LET DP203,.6119} June 15/July 14{LET DR203,.5645} June 15/July 14{LET DT203,.5185} June 15/July 14{LET DX203,.4739} June 15/July 14{LET DZ203,.4306} June 15/July 14{LET EB203,.3885} June 15/July 14{LET ED203,.3477} June 15/July 14{LET EH203,.3081} June 15/July 14{LET EJ203,.2696} June 15/July 14{LET EL203,.2323} June 15/July 14{LET EN203,.1960} June 15/July 14{LET ER203,.1609} June 15/July 14{LET ET203,.1267} June 15/July 14{LET EV203,.0936} June 15/July 14{LET EX203,.0615} June 15/July 14{LET FB203,.0303} June 15/July 14{GOTO}FT248~\I {LET DN203,.6773}July 15/31{LET DP203,.6280}July 15/31\V {LET L54,D1}{LET DR203,.5801}July 15/31{LET V54,D1}{LET DT203,.5337}July 15/31{LET AF54,D1}{LET DX203,.4886}July 15/31{LET AP54,D1}{LET DZ203,.4449}July 15/31{LET BB54,D1}{LET EB203,.4024}July 15/31{LET DV175,D1}{LET ED203,.3612}July 15/31{LET EF175,D1}{LET EH203,.3212}July 15/31{LET EP175,D1}{LET EJ203,.2823}July 15/31{LET EZ175,D1}{LET EL203,.2446}July 15/31{LET FL175,D1}{LET EN203,.2080}July 15/31{LET BQ113,D1}{LET ER203,.1725}July 15/31{LET CA113,D1}{LET ET203,.1380}July 15/31{LET CK113,D1}{LET EV203,.1045}July 15/31{LET CU113,D1}{LET EX203,.0721}July 15/31{LET DG113,D1}{LET FB203,.0406}July 15/31{LET GC220,D1}{GOTO}FT248~{LET B54,F1}\K {LET DN203,.6773}Aug.1/14{LET D54,F2}{LET DP203,.6280}Aug.1/14{LET BG113,F1}{LET DR203,.5801}Aug.1/14{LET BI113,F2}{LET DT203,.5337}Aug.1/14{LET DL175,F1}{LET DX203,.4886}Aug.1/14{LET DN175,F2}{LET DZ203,.4449}Aug.1/14{LET FU225,F1}{LET EB203,.4024}Aug.1/14{LET N54,F2}{LET ED203,.3612}Aug.1/14{LET X54,F2}{LET EH203,.3212}Aug.1/14{LET AH54,F2}{LET EJ203,.2823}Aug.1/14{LET AR54,F2}{LET EL203,.2446}Aug.1/14{LET BS113,F2}{LET EN203,.2080}Aug.1/14{LET CC113,F2}{LET ER203,.1725}Aug.1/14{LET CM113,F2}{LET ET203,.1380}Aug.1/14{LET CW113,F2}{LET EV203,.1045}Aug.1/14{LET DX175,F2}{LET EX203,.0721}Aug.1/14{LET EH175,F2}{LET FB203,.0406}Aug.1/14{LET ER175,F2}{LET FD203,.01}Aug.1/14{LET FB175,F2}~{GOTO}FT248~\T {LET DN203,.5801}Feb.1/14{LET DP203,.5337}Feb.1/14{LET DR203,.4886}Feb.1/14{LET DT203,.4449}Feb.1/14{LET DX203,.4024}Feb.1/14{LET DZ203,.3612}Feb.1/14{LET EB203,.3212}Feb.1/14{LET ED203,.2823}Feb.1/14{LET EH203,.2446}Feb.1/14{LET EJ203,.2080}Feb.1/14{LET EL203,.1725}Feb.1/14{LET EN203,.1380}Feb.1/14{LET ER203,.1045}Feb.1/14{LET ET203,.0721}Feb.1/14{LET EV203,.0406}Feb.1/14{LET EX203,.01}Feb.1/14{GOTO}FT248~\S {LET DN203,.6280}May 1/14{LET DP203,.5801}May 1/14{LET DR203,.5337}May 1/14{LET DT203,.4886}May 1/14{LET DX203,.4449}May 1/14{LET DZ203,.4024}May 1/14{LET EB203,.3612}May 1/14{LET ED203,.3212}May 1/14{LET EH203,.2823}May 1/14{LET EJ203,.2446}May 1/14{LET EL203,.2080}May 1/14{LET EN203,.1725}May 1/14{LET ER203,.1380}May 1/14{LET ET203,.1045}May 1/14{LET EV203,.0721}May 1/14{LET EX203,.0406}May 1/14{LET FB203,.01}May 1/14{GOTO}FT248~\L {LET DN203,.6941}Aug.15/Sept.14{LET DP203,.6443}Aug.15/Sept.14{LET DR203,.5959}Aug.15/Sept.14{LET DT203,.5490}Aug.15/Sept.14{LET DX203,.5035}Aug.15/Sept.14{LET DZ203,.4593}Aug.15/Sept.14{LET EB203,.4164}Aug.15/Sept.14{LET ED203,.3748}Aug.15/Sept.14{LET EH203,.3344}Aug.15/Sept.14{LET EJ203,.2951}Aug.15/Sept.14{LET EL203,.2570}Aug.15/Sept.14{LET EN203,.2201}Aug.15/Sept.14{LET ER203,.1842}Aug.15/Sept.14{LET ET203,.1494}Aug.15/Sept.14000671 {LET EV203,.1155}Aug.15/Sept.14{LET EX203,.0828}Aug.15/Sept.14{LET FB203,.0510}Aug.15/Sept.14{LET FD203,.0201}Aug.15/Sept.14{GOTO}FT248~\MSept.15/Oct.14Sept.15/Oct.14Sept.15/Oct.14Sept.15/Oct.14Sept.15/Oct.14Sept.15/Oct.14Sept.15/Oct.14Sept.15/Oct.14Sept.15/Oct.14Sept.15/Oct.14Sept.15/Oct.14Sept.15/Oct.14Sept.15/Oct.14Sept.15/Oct.14Sept.15/Oct.14Sept.15/Oct.14Sept.15/Oct.14Sept.15/Oct.14\NOct.15/31Oct.15/31Oct.15/31Oct.15/31Oct.15/31Oct.15/31Oct.15/31Oct.15/31Oct.15/31Oct.15/31Oct.15/31Oct.15/31Oct.15/31Oct.15/31Oct.15/31Oct.15/31Oct.15/31Oct.15/31\QNov.1/14Nov.1/14Nov.1/14Nov.1/14Nov.1/14Nov.1/14Nov.1/14Nov.1/14Nov.1/14Nov.1/14Nov.1/14Nov.1/14Nov.1/14Nov.1/14Nov.1/14Nov.1/14Nov.1/14Nov.1/14Nov.1/14last1\o {goto}panel1~{getlabel "Enter the appropriate printing code, and press Enter:->",YRS}~{if YRS="ALL5"}{branch PRINT5}~{if YRS="FIRST4"}{branch PRINT4}~{if YRS="LAST4"}{branch PRINTL4}~{if YRS="FIRST3"}{branch PRINT3}~{if YRS="LAST3"}{branch PRINTL3}~{if YRS="FIRST2"}{branch PRINT2}~{if YRS="LAST2"}{branch PRINTL2}~{if YRS="FIRST1"}{branch PRINT1}~{if YRS="LAST1"}{branch 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4 of 4}~{let CA115,Page 1 of 4}{let CK115,Page 2 of 4}{let CU115,Page 3 of 4}{let DG115,Page 4 of 4}~{let EF177,Page 1 of 4}{let EP177,Page 2 of 4}{let EZ177,Page 3 of 4}{let FL177,Page 4 of 4}~/ppos{esc}\027(s0p12H\027&l1H~ml5~bcBTRN~{esc}rTRN2~agrTRN3~agrTRN4~agoml0~{esc}rTRN5~agoml5~bcBSCH2~{esc}rSCH22~agrSCH23~agrSCH24~agoml0~{esc}rSCH25~agoml5~bcBSCH1~{esc}rSCH12~agrSCH13~agrSCH14~agoml0~{esc}rSCH15~agos{esc}\027&l7.27C\027(s0p12H\027&l4H~{esc}cbrAS~agPRINT3 {let V56,Page 1 of 3}{let AF56,Page 2 of 3}{let BB56,Page 3 of 3}~{let CA115,Page 1 of 3}{let CK115,Page 2 of 3}{let DG115,Page 3 of 3}~{let EF177,Page 1 of 3}{let EP177,Page 2 of 3}{let FL177,Page 3 of 3}~/reAP54..AP56~/reCU113..CU115~/reEZ175..EZ177~/ppos{esc}\027(s0p12H\027&l1H~ml5~bcBTRN~{esc}rTRN2~agrTRN3~agoml0~{esc}rTRNS4~agoml5~bcBSCH2~{esc}rSCH22~agrSCH23~agoml0~{esc}rSCHE24~agoml5~bcBSCH1~{esc}rSCH12~agrSCH13~agoml0~{esc}rSCHE14~agos{esc}\027&l7.27C\027(s0p12H\027&l4H~{esc}cbrAS~agPRINTL3 {let AF56,Page 1 of 3}{let AP56,Page 2 of 3}{let BB56,Page 3 of 3}~{let CK115,Page 1 of 3}{let CU115,Page 2 of 3}{let DG115,Page 3 of 3}~{let EP177,Page 1 of 3}{let EZ177,Page 2 of 3}{let FL177,Page 3 of 3}~/ppos{esc}\027(s0p12H\027&l1H~ml5~bcBTRN~{esc}rTRN3~agrTRN4~agoml0~{esc}rTRN5~agoml5~bcBSCH2~{esc}rSCH23~agrSCH24~agoml0~{esc}rSCH25~agoml5~bcBSCH1~{esc}rSCH13~agrSCH14~agoml0~{esc}rSCH15~agos{esc}\027&l7.27C\027(s0p12H\027&l4H~{esc}cbrAS~agPRINT2 {let AF56,Page 1 of 2}{let BB56,Page 2 of 2}~{let CK115,Page 1 of 2}{let DG115,Page 2 of 2}~{let EP177,Page 1 of 2}{let FL177,Page 2 of 2}~/reAP54..AP56~/reCU113..CU115~/reEZ175..EZ177~/ppos{esc}\027(s0p12H\027&l1H~ml5~bcBTRN~{esc}rTRN3~agoml0~{esc}rTRNS3~agoml5~bcBSCH2~{esc}rSCH23~agoml0~{esc}rSCHE23~agoml5~bcBSCH1~{esc}rSCH13~agoml0~{esc}rSCHE13~agos{esc}\027&l7.27C\027(s0p12H\027&l4H~{esc}cbrAS~agPRINTL2 {let AP56,Page 1 of 2}{let BB56,Page 2 of 2}~{let CU115,Page 1 of 2}{let DG115,Page 2 of 2}~{let EZ177,Page 1 of 2}{let FL177,Page 2 of 2}~/ppos{esc}\027(s0p12H\027&l1H~ml5~bcBTRN~{esc}rTRN4~agoml0~{esc}rTRN5~agoml5~bcBSCH2~{esc}rSCH24~agoml0~{esc}rSCH25~agoml5~bcBSCH1~{esc}rSCH14~agoml0~{esc}rSCH15~agos{esc}\027&l7.27C\027(s0p12H\027&l4H~{esc}cbrAS~agPRINT1 {let Ap56,Page 1 of 1}~{let Cu115,Page 1 of 1}~{let Ez177,Page 1 of 1}~/ppos{esc}\027(s0p12H\027&l1H~ml5~bcBTRN~{esc}rTRN4~agoml5~bcBSCH2~{esc}rSCH24~agoml5~bcBSCH1~{esc}rSCH14~agoml0~{esc}os{esc}\027&l7.27C\027(s0p12H\027&l4H~{esc}cbrAS~agPRINTL1 {let AZ56,Page 1 of 1}~{let DE115,Page 1 of 1}~{let FJ177,Page 1 of 1}~/ppos{esc}\027(s0p12H\027&l1H~ml5~bcBTRN~{esc}rTRNl5~agoml5~bcBSCH2~{esc}rSCHL25~agoml5~bcBSCH1~{esc}rSCHL15~agoml0~{esc}os{esc}\027&l7.27C\027(s0p12H\027&l4H~{esc}cbrAS~agVERY IMPORTANT: BE SURE TO ENTER THE CORRECT PRINTING CODE= =====PRINTING CODE:= ====CodeExplanations----ALL5Printing all five pagesFIRST4Printing 4 yrs.(Yrs. 1, 2, 3 & 4)FIRST3Printing 3 yrs.(yrs.2, 3 & 4)FIRST2Printing 2 yrs.(yrs.3 & 4)FIRST1Printing yr.4LAST4Printing 4 yrs.(Yrs.2,3,4, & 5)LAST3Printing 3 yrs.(yrs.3,4, & 5)LAST2Printing 2 yrs.(yrs.4 & 5)LAST1Printing yr.5Year 5 = most recent year000673 ORIGINAL REVENUE AND TAX REPORTEDPage 1 of 7ORIGINAL REVENUE AND TAX REPORTEDPage 2 of 7ORIGINAL REVENUE AND TAX REPORTEDPage 3 of 7ORIGINAL REVENUE AND TAX REPORTEDPage 4 of 7ORIGINAL REVENUE AND TAX REPORTEDPage 5 of 7ORIGINAL REVENUE AND TAX REPORTEDPage 6 of 7ORIGINAL REVENUE AND TAX REPORTEDPage 7 of 7ORIGINAL REVENUE AND TAX REPORTEDPage 8 of 10ORIGINAL REVENUE AND TAX REPORTEDPage 9 of 10ORIGINAL REVENUE AND TAX REPORTEDPage 10 of 10GrandJanuary February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal Grand TotFebruary March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal TotalREPORTED UTILITY:Gross revenue reported:000000Reported deductions:Reported revenues:00000000000TAX PAID00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000674 Tracfone Wireless, IncData SheetBillingInternet Platform Revenue Non-DirecBilling PlatPage Plus Page Plus APP DirectTotal TaxableSales SalesMO/YR CATEGORYReported Intra-stateIntra-stateIntra-stateIntra-stateIntra-stateRevenue39083Utility TaxNone 8940.808 01962.616 10903.425169.093908939114Utility TaxNone 8197.276 01799.402 9996.6784739.223912039142Utility TaxNone 9381.735 02059.405 11441.14Note: Sales amounts are reduced by three factors. 5424.013914839173Utility TaxNone 8127.899 01784.173 9912.0721)Data is removed.4699.113917939203Utility TaxNone 6926.022 01520.346 8446.3682)Interstate and international is removed.4004.253920939234Utility TaxNone 8871.397 9.4692981937.91 10818.783)A factor to proportion sum of zip population down to city population.5104.02 24.94 3924039264Utility TaxNone 8612.067 9.4692981880.985 10502.524954.09 24.94 3927039295Utility TaxNone 8196.895 15.145561784.173 9996.214DATA:4699.11 39.89 3930139326Utility TaxNone 10324.2 55.016092211.271 12590.48Year 2007 2008 2009 2010 2011 2012 2013 20145823.99 144.9 3933239356Utility TaxNone 9052.977 62.598361924.64 11040.22Data Percentage00.0396 0.1865 0.2508 0.3842 0.41775069.07 164.87 3936239387Utility TaxNone 12433.77 58.771162670.593 15163.130 07033.74 154.79 3939339417Utility TaxNone 11847.41 70.518552530.133 14448.066663.8 185.73 3942339448Utility TaxNone 11360.34 93.510292233.306 13687.15INTRA-STATE:4509.11 188.8 3945439479Utility TaxNone 14968.1 77.160852988.595 18033.866034.06 155.79 3948539508Utility TaxNone 15335.08 137.50673003.414 18476 Year 2007 2008 2009 2010 2011 2012 2013 20146063.98 277.63 3951439539Utility TaxNone 13826.46 117.22962714.696 16658.38 Intrastate 0.8407 0.8407 0.8407 0.8573 0.8397 0.8338 0.8109 0.79335481.05 236.69 3954539569Utility TaxNone 14882.38 181.44362866.754 17930.57 Interstate 0.1539 0.1539 0.1539 0.1411 0.1558 0.1568 0.1717 0.19335788.06 366.34 3957539600Utility TaxNone 13710.31 139.01242669.124 16518.45 Internatio 0.0054 0.0054 0.0054 0.0016 0.0045 0.0094 0.0174 0.01345389.04 280.67 3960639630Utility TaxNone 14029.32 248.91172624.563 16902.79 Total:1 1 1 1 1 1 1 15299.07 502.56 3963639661Utility TaxNone 13671.33 242.48782557.665 16471.495164 489.59 3966739692Utility TaxNone 14747.59 232.5922787.998 17768.185629.05 469.61 3969839722Utility TaxNone 14849.27 216.22272825.194 17890.695704.15 436.56 3972839753Utility TaxNone 15132.05 259.32762840.009 18231.39POPULATION RATIO:5734.06 523.59 3975939783Utility TaxNone 17339.14 325.14143226.249 20890.536513.89 656.47 3978939814Utility TaxNone 16946.67 429.6113290.39 20666.67 Zip populahttps://www.unitedstateszipcodes.org/98057/6429.04 839.41 3982039845Utility TaxNone 13300.54 463.3492456.282 16220.172007 2008 2009 2010 2011 2012 2013 4799.29 905.33 3985139873Utility TaxNone 18442.84 494.55353553.876 22491.276943.86 966.3 3987939904Utility TaxNone 18328.93 597.38973426.033 22352.3598055 20151 19888 20228 20603 19863 19890 20190 6694.07 1167.23 3991039934Utility TaxNone 21610.99 504.24194239.633 26354.8698056 30295 30562 31751 31912 32733 33200 32960 8283.75 985.23 3994039965Utility TaxNone 20571.33 595.8853919.773 25086.9998057 9813 9768 10621 11305 11631 11680 11760 7658.78 1164.29 3997139995Utility TaxNone 20932.51 741.69723853.244 25527.4598058 41080 40762 41061 41326 40371 40450 40800 7528.79 1449.19 4000140026Utility TaxNone 20345.57 640.94913825.151 24811.6798059 32156 32741 33745 34618 35108 35770 36470 7473.9 1252.34 4003240057Utility TaxNone 21559.88 574.91144157.745 26292.54Sum: 133495 133721 137406 139764 139706 140990 142180 8123.75 1123.31 4006340087Utility TaxNone 19578.33 697.71813599.964 23876.017033.91 1363.26 4009340118Utility TaxNone 19461.63 810.29393461.772 23733.7 Renton Pohttps://edocs.rentonwa.gov/Documents/0/edoc/956723/2016%20CAFR%(Page 7-7)6763.9 1583.22 4012440148Utility TaxNone 23058.17 957.64154103.909 28119.728018.56 1871.12 4015440179Utility TaxNone 25916.62 1425.5093882.714 31224.842007 2008 2009 2010 2011 2012 2013 7248.58 2661.26 4018540210Utility TaxNone 25002.17 1388.053732.877 30123.1Renton Po60290 78780 83650 90927 92590 93910 95540 6968.85 2591.33 4021640238Utility TaxNone 29515.79 1956.3824089.021 35561.197633.73 3652.34 4024440269Utility TaxNone 28889.68 1927.2753989.888 34806.847448.66 3598 4027540299Utility TaxNone 29311.31 2128.7873874.733 35314.832007 2008 2009 2010 2011 2012 2013 7233.68 3974.2 4030540330Utility TaxNone 30372.83 2445.2663775.675 36593.77Population0.451627 0.589137 0.60878 0.650575 0.662749 0.666076 0.671965 7048.75 4565.03 4033640360Utility TaxNone 38402.85 2828.7025036.942 46268.499403.39 5280.86 4036640391Utility TaxNone 37172.09 3007.7814605.78 44785.658598.46 5615.18 4039740422Utility TaxNone 36842.89 3374.1564171.977 44389.027788.6 6299.16 4042840452Utility TaxNone 38918.86 3836.8844134.449 46890.27718.54 7163.02 4045840483Utility TaxNone 40788.68 3885.0934469.216 49142.998343.51 7253.02 4048940513Utility TaxNone 48338.65 4628.0045272.682 58239.339843.49 8639.95 4051940544Utility TaxNone 32784.67 4048.2644666.649 41499.5910308 8942.07 4055040575Utility TaxNone 30383.77 4134.1813942.517 38460.478708.49 9131.85 4058140603Utility TaxNone 33118.85 4485.5744318.172 41922.69538.26 9908.03 4060940634Utility TaxNone 33050.8 4637.2044148.451 41836.459163.37 10242.96 4064040664Utility TaxNone 36233.16 4950.8584680.742 45864.7710339.13 10935.78 4067040695Utility TaxNone 32994.03 4871.6413898.925 41764.68612.2 10760.8 4070140725Utility TaxNone 34147.32 4592.384484.755 43224.459906.22 10143.95 4073140756Utility TaxNone 37527.58 4766.7235208.964 47503.2711505.9 10529.05 4076240787Utility TaxNone 37521.11 4446.5995527.367 47495.0812209.21 9821.94 4079340817Utility TaxNone 34178.79 3822.6465262.856 43264.2911624.94 8443.71 4082340848Utility TaxNone 35912.74 3548.7545997.672 45459.1713248.05 7838.72 4085440878Utility TaxNone 36242.77 3504.8996129.255 45876.9213538.7 7741.85 4088440909Utility TaxNone 29608.81 3146.0396204.11 38958.9514910.64 7561.03 4091540940Utility TaxNone 30622.22 3425.6166244.558 40292.3915007.85 8232.95 4094640969Utility TaxNone 32202.46 3589.5546579.644 42371.6615813.18 8626.95 4097541000Utility TaxNone 32780.36 3693.5756658.118 43132.06 016001.78 8876.95 4100641030Utility TaxNone 31633.57 3802.646186.909 41623.1214869.3 9139.07 4103641061Utility TaxNone 34744.37 3977.8126994.095 45716.2816809.25 9560.07 4106741091Utility TaxNone 37745.75 4213.2967706.414 49665.4618521.2 10126.02 4109741122Utility TaxNone 37002.92 4309.847375.292 48688.0517725.4 10358.05 4112841153Utility TaxNone 38343.68 4285.2717823.259 50452.2118802.02 10299 4115941183Utility TaxNone 41082.91 5241.1957732.357 54056.4618583.55 12596.42 4118941214Utility TaxNone 40777.18 5460.1897416.813 53654.1817825.19 13122.74 4122041244Utility TaxNone 43383.7 5687.7518012.366 57083.82 019256.51 13669.65 4125041275Utility TaxNone 31350.87 5057.2546538.273 42946.419485.4 15071.66 4128141306Utility TaxNone 31404.87 4893.5586721.941 43020.3720032.77 14583.81 4131241334Utility TaxNone 33764.86 5978.046510.332 46253.2319402.13 17815.79 4134041365Utility TaxNone 32870.67 6136.5726021.074 45028.3217944.04 18288.25 4137141395Utility TaxNone 44607.07 6601.2799897.225 61105.5729495.77 19673.17 41401#N/A41426Utility TaxDID NOT REPORT0#N/A #N/A #N/A #N/A #N/A#N/A41456Utility TaxDID NOT REPORT041487Utility TaxDID NOT REPORT041518Utility TaxDID NOT REPORT041548Utility TaxDID NOT REPORT041579Utility TaxDID NOT R0041609Utility TaxDID NOT R00 Total Colu 1946395 116783.741640Utility TaxDID NOT R00 Column E: 174200.9 10452.0541671Utility TaxDID NOT R00 Column F: 0 041699Utility TaxDID NOT R00 Column G 0 041730Utility TaxDID NOT R00 Column H 331216 19872.9641760Utility TaxDID NOT R00 Column I: 2451812 147108.741791Utility TaxDID NOT R0041821Utility TaxDID NOT R0041852Utility TaxDID NOT R00Due check:41883Utility TaxDID NOT R00Sum check147108.741913Utility TaxDID NOT R00Horizontal041944Utility TaxDID NOT R0041974Utility TaxDID NOT R0042005Utility TaxDID NOT R0042036Utility TaxDID NOT R0042064Utility TaxDID NOT R0042095Utility TaxDID NOT R0042125Utility TaxDID NOT R0042156Utility TaxDID NOT R0042186Utility TaxDID NOT R0042217Utility TaxDID NOT R0042248Utility TaxDID NOT R0042278Utility TaxDID NOT R0042309Utility TaxDID NOT R0042339Utility TaxDID NOT R0042370Utility TaxDID NOT R0042401Utility TaxDID NOT R0042430Utility TaxDID NOT R0042461Utility TaxDID NOT R0042491Utility TaxDID NOT R0042522Utility TaxDID NOT R0042552Utility TaxDID NOT R0042583Utility TaxDID NOT R0042614Utility TaxDID NOT R00TAXABLE REVENUE PER AUDIT:(Horizontal Tabulation)GrandJanuary February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal Total0000000000000000000000000675 TAX, PENALTY & INTEREST SCHEDULETAX, PENALTY & INTEREST SCHEDULETAX, PENALTY & INTEREST SCHEDULETAX, PENALTY & INTEREST SCHEDULETAX, PENALTY & INTEREST SCHEDULE 0 TAX, PENALTY & INTEREST SCHEDULE0TAX, PENALTY & INTEREST SCHEDULE0TAX, PENALTY & INTEREST SCHEDULE0TAX, PENALTY & INTEREST SCHEDULE0TAX, PENALTY & INTEREST SCHEDULECOMPUTATIONS Page 1 of 7COMPUTATIONSPage 2 of 7COMPUTATIONSPage 3 of 7COMPUTATIONSPage 4 of 7COMPUTATIONSPage 5 of 7COMPUTATIONSPage 6 of 7COMPUTATIONSPage 7 of 7COMPUTATIONSPage 8 of 10COMPUTATIONSPage 9 of 10COMPUTATIONSGrandJanuary February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal Total February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May June July August SeptembeOctober NovemberDecemberTotal January February March April May Jun Jul August SeptembeOctober NovemberDecemberTotalUTILITY: Revenue Per Data Sheet:0 Deductions: Total Ta000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 Tax Due000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 Tax Paid:0000000000 DIFFERE0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 Rounding:-0.01TOTAL TAX0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000-0.01 0 000000000000000000000000000000000INTEREST:Note: Renton does not charge interest previous to May 2008.Note: Renton does not charge interest previous to May 2008. Interest 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.11.1 1.1 1.1 1.1 1.1 1.09 1.08 1.07 1.06 1.05 1.04 1.031.02 1.01 1 0.99 0.98 0.97 0.96 0.95 0.94 0.93 0.92 0.910.9 0.89 0.88 0.87 0.86 0.85 0.84 0.83 0.82 0.81 0.8 0.790.78 0.77 0.76 0.75 0.74 0.73 0.72 0.71 0.7 0.69 0.68 0.670.66 0.65 0.64 0.63 0.62 0.61 0.6 0.59 0.58 0.57 0.56 0.550.54 0.53 0.52 0.51 0.5 Interest0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000PENALTY: Penalty0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.250.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.250.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.250.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.250.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.250.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.250.25 0.25 0.25 0.25 0.25 Penalty0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 Penalty Paid: DIFFERE0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000TOTAL TAX, INTEREST ANDPENALTY D0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000-0.01 0 0000000000-0.0100000000000000000000000000000#N/ATax Rate: 0.06Tax Rate: 0.06Tax Rate: 0.06Tax Rate: 0.06Tax Rate: 0.06Tax Rate: 0Tax Rate: 0.06Interest St41455Interest En42886-0.002Penalty 000000#N/ADifference0.470466#N/ATax000000#N/A#N/AInt000000#N/A#N/A00#N/A000000000#N/A#N/A00428610414550140600.4622470000000000000000000000000000000000676 Nate Malone From:TRS <crisp@trs-integrity.com> Sent:Thursday, September 21, 2017 3:49 PM To:Jan Hawn Subject:TracFone audit Hi Jan, Hope things have been going well for you. We were contacted again by Mr. Ford of TracFone asking TRS to meet with him and his attorney to discuss the audit. We believe that this would not be a good idea. TRS, not being a law firm, would be at a disadvantage. Also, it is the policy of TRS not to meet with taxpayer's legal representatives without the client's legal representative.In addition, he seems to be more concerned about whether or not some or all of their business activity is taxable than how we came up with the methodology or the tax estimates. There are some other things that are happening concerning utility audits that may help this audit that we are not able to discuss right now due to non -disclosure agreements signed by our company, so if it is okay with you, we would like to hold off a little while on this audit until we see how things turn out. Let us know if this is okay with you and if you have any questions. Thanks Jan. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or i f you have received this email in error, please notify the person who sent it, and immediately delete it. 000682 Nate Malone From:TRS <crisp@trs-integrity.com> Sent:Thursday, September 21, 2017 3:49 PM To:Jan Hawn Subject:TracFone audit Hi Jan, Hope things have been going well for you. We were contacted again by Mr. Ford of TracFone asking TRS to meet with him and his attorney to discuss the audit. We believe that this would not be a good idea. TRS, not being a law firm, would be at a disadvantage. Also, it is the policy of TRS not to meet with taxpayer's legal representatives without the client's legal representative.In addition, he seems to be more concerned about whether or not some or all of their business activity is taxable than how we came up with the methodology or the tax estimates. There are some other things that are happening concerning utility audits that may help this audit that we are not able to discuss right now due to non -disclosure agreements signed by our company, so if it is okay with you, we would like to hold off a little while on this audit until we see how things turn out. Let us know if this is okay with you and if you have any questions. Thanks Jan. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or i f you have received this email in error, please notify the person who sent it, and immediately delete it. 000682 "Providing cities with experienced research and auditing services" November 6, 2017 Audit/Tax Investigation Update - Renton NMI LLC TracFone Wireless, Inc. TRS still has this audit in a holding pattern awaiting further developments, and will contact the City of Renton as soon as we believe it is a good time to move forward. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000129 "Providing cities with experienced research and auditing services" November 6, 2017 Audit/Tax Investigation Update - Renton NMI LLC TracFone Wireless, Inc. TRS still has this audit in a holding pattern awaiting further developments, and will contact the City of Renton as soon as we believe it is a good time to move forward. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000129 "Providing cities with experienced research and auditing services' December 6, 2017 Audit/Tax Investigation Update - Renton TELEPHONE COMPANIES LLC TracFone Wireless, Inc. Audit 1 and Audit 2. On November 28, 2017, TRS discovered that there needs to be an adjustment to the methodology sheet that we sent to TracFone. We have taken out the assertion that prepaid is taxed on usage, as prepaid is properly sourced differently from post-paid. Actually, usage has been used by other companies to estimate prepaid revenues; however, now that the bundles are done mostly with unlimited minutes, the movement has been toward companies using sales figures instead of usage. And as we have seen, that is the more correct method for estimation per the codes. TRS plans to send the update of the methodology to TracFone today (December 6, 2017.) On December 4, 2017, TRS sent a Statute of Limitations Waiver form for the second audit of TracFone so that we do not lose months during a year of the audit period. In addition, the City of Renton has already sent an estimated tax for the first audit which holds all years in place, so a waiver form is not needed for the first audit. TRS still has the first audit in a holding pattern awaiting further developments, and will contact the City of Renton as soon as we believe it is a good time to move forward. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity corn 000130 "Providing cities with experienced research and auditing services' December 6, 2017 Audit/Tax Investigation Update - Renton TELEPHONE COMPANIES LLC TracFone Wireless, Inc. Audit 1 and Audit 2. On November 28, 2017, TRS discovered that there needs to be an adjustment to the methodology sheet that we sent to TracFone. We have taken out the assertion that prepaid is taxed on usage, as prepaid is properly sourced differently from post-paid. Actually, usage has been used by other companies to estimate prepaid revenues; however, now that the bundles are done mostly with unlimited minutes, the movement has been toward companies using sales figures instead of usage. And as we have seen, that is the more correct method for estimation per the codes. TRS plans to send the update of the methodology to TracFone today (December 6, 2017.) On December 4, 2017, TRS sent a Statute of Limitations Waiver form for the second audit of TracFone so that we do not lose months during a year of the audit period. In addition, the City of Renton has already sent an estimated tax for the first audit which holds all years in place, so a waiver form is not needed for the first audit. TRS still has the first audit in a holding pattern awaiting further developments, and will contact the City of Renton as soon as we believe it is a good time to move forward. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity corn 000130 "Providing cities with experienced research and auditing services" January 5, 2018 Audit/Tax Investigation Update - Renton L L C TracFone Wireless, Inc. Audit 1 and Audit 2. On December 8, 2017, TRS sent the following email to the City of Renton: We discovered that we had revised an earlier methodology for TracFone, one that did not include the upgraded population estimation method. Fortunately, we had not sent the one we sent to you to TracFone before the error was discovered. So this is the correct one attached. On December 8, 2017, TRS sent the following email to Mr. Ford of TracFone: Hi Nicholas, Mr. Edwards pointed out that prepaid is not taxed based on usage, and our research found that this is a correct assertion. Our estimates did not change because they were not based on usage, as your company does not track usage rates, but we wanted to revise our methodology statements to reflect better understanding in this situation. Attached find the revisions for Renton. On December 22, 2017, TRS sent the following email to the City of Renton: Here is the TracFone second audit Statute of Limitations waiver. Remember the first audit is held by an estimated tax. You can return it to us with your signature, preferably before the 31st, and we will keep a copy for our records and send the fully executed one on to TracFone. On December 22, 2017, TRS received the following email from the City of Renton: (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000131 "Providing cities with experienced research and auditing services" January 5, 2018 Audit/Tax Investigation Update - Renton L L C TracFone Wireless, Inc. Audit 1 and Audit 2. On December 8, 2017, TRS sent the following email to the City of Renton: We discovered that we had revised an earlier methodology for TracFone, one that did not include the upgraded population estimation method. Fortunately, we had not sent the one we sent to you to TracFone before the error was discovered. So this is the correct one attached. On December 8, 2017, TRS sent the following email to Mr. Ford of TracFone: Hi Nicholas, Mr. Edwards pointed out that prepaid is not taxed based on usage, and our research found that this is a correct assertion. Our estimates did not change because they were not based on usage, as your company does not track usage rates, but we wanted to revise our methodology statements to reflect better understanding in this situation. Attached find the revisions for Renton. On December 22, 2017, TRS sent the following email to the City of Renton: Here is the TracFone second audit Statute of Limitations waiver. Remember the first audit is held by an estimated tax. You can return it to us with your signature, preferably before the 31st, and we will keep a copy for our records and send the fully executed one on to TracFone. On December 22, 2017, TRS received the following email from the City of Renton: (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000131 Attached is the signed waiver. On December 27, 2017, TRS sent the following email to Mr. Ford: Hope all is well. Here is a copy of the signed waiver form for the City of Renton. TRS still has the first audit in a holding pattern awaiting further developments, and will contact the City of Renton as soon as we believe it is a good time to move forward. We have found out that TracFone has lost some major court cases in another state concerning the same issues that we have with this audit. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000132 Attached is the signed waiver. On December 27, 2017, TRS sent the following email to Mr. Ford: Hope all is well. Here is a copy of the signed waiver form for the City of Renton. TRS still has the first audit in a holding pattern awaiting further developments, and will contact the City of Renton as soon as we believe it is a good time to move forward. We have found out that TracFone has lost some major court cases in another state concerning the same issues that we have with this audit. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000132 (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000133 (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000133 (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000134 (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000134 "Providing cities with experienced research and auditing services" April 6, 2018 Audit/Tax Investigation Update - Renton TELEPHONE COMPANIES L LC TracFone Wireless, Inc. Audit 1 and Audit 2: TRS is continuing to do research and to wait to see how certain outcomes turn out regarding this audit. We are hoping to hear something soon. TRS will contact the City of Renton soon to discuss possible next steps. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000136 "Providing cities with experienced research and auditing services" April 6, 2018 Audit/Tax Investigation Update - Renton TELEPHONE COMPANIES LLC TracFone Wireless, Inc. Audit 1 and Audit 2: TRS is continuing to do research and to wait to see how certain outcomes turn out regarding this audit. We are hoping to hear something soon. TRS will contact the City of Renton soon to discuss possible next steps. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000136 "Providing cities with experienced research and auditing services" May 4, 2018 Audit/Tax Investigation Update - Renton L L C TracFone Wireless, Inc. Audit 1 and Audit 2: TRS is continuing to do tax research on the issues concerning this audit. In addition, TRS is also waiting to see how a certain court case turn out that would affect this audit. TRS will contact the City of Renton when we hear something. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000137 "Providing cities with experienced research and auditing services" May 4, 2018 Audit/Tax Investigation Update - Renton L L C TracFone Wireless, Inc. Audit 1 and Audit 2: TRS is continuing to do tax research on the issues concerning this audit. In addition, TRS is also waiting to see how a certain court case turn out that would affect this audit. TRS will contact the City of Renton when we hear something. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000137 "Providing cities with experienced research and auditing services" October 5, 2018 Audit/Tax Investigation Update - Renton LLC TracFone Wireless, Inc. Audit 1 and Audit 2: TRS contacted the attorney (Mr. Davis) that is representing the City of Springfield Illinois (in the court case of TracFone v. the City of Springfield) and was told that the case is at the Illinois Supreme Court and that no decision has been made yet, but hopes to know something by early next month. TRS will contact the City of Renton once we hear something concerning the court case which deals with some of the issues that affect our court case. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000143 "Providing cities with experienced research and auditing services" October 5, 2018 Audit/Tax Investigation Update - Renton LLC TracFone Wireless, Inc. Audit 1 and Audit 2: TRS contacted the attorney (Mr. Davis) that is representing the City of Springfield Illinois (in the court case of TracFone v. the City of Springfield) and was told that the case is at the Illinois Supreme Court and that no decision has been made yet, but hopes to know something by early next month. TRS will contact the City of Renton once we hear something concerning the court case which deals with some of the issues that affect our court case. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000143 (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000144 (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000144 "Providing cities with experienced research and auditing services" November 6, 2018 Audit/Tax Investigation Update - Renton TELEPHONE COMPANIES 1.1.0 TracFone Wireless, Inc. Audit 1 and Audit 2: TRS has found out that the Missouri Supreme Court has let stand the Court of Appeal court case between the City of Springfield and TracFone Wireless. In this case, it turns out that the courts stated that the direct sales (sales made directly by TracFone to their customers) were taxable. They also stated that due to how the wording is made in their tax code that indirect sales (TracFone calling cards sold by Walmart and other stores) would not be taxable. After reviewing the wording of the City of Springfield which does not encompass what the City of Renton states as taxable, we believe that these items would be taxable too due to the City's code. Also, TRS contacted a Walmart that sales telephone calling cards for TracFone and was told that the sale of communications is by Tracfone and not Walmart. TRS will review this case with the City of Renton concerning the audit and how they would like us to move forward with the audit. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000145 "Providing cities with experienced research and auditing services" November 6, 2018 Audit/Tax Investigation Update - Renton TELEPHONE COMPANIES 1.1.0 TracFone Wireless, Inc. Audit 1 and Audit 2: TRS has found out that the Missouri Supreme Court has let stand the Court of Appeal court case between the City of Springfield and TracFone Wireless. In this case, it turns out that the courts stated that the direct sales (sales made directly by TracFone to their customers) were taxable. They also stated that due to how the wording is made in their tax code that indirect sales (TracFone calling cards sold by Walmart and other stores) would not be taxable. After reviewing the wording of the City of Springfield which does not encompass what the City of Renton states as taxable, we believe that these items would be taxable too due to the City's code. Also, TRS contacted a Walmart that sales telephone calling cards for TracFone and was told that the sale of communications is by Tracfone and not Walmart. TRS will review this case with the City of Renton concerning the audit and how they would like us to move forward with the audit. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000145 Nate Malone From:TRS <crisp@trs-integrity.com> Sent:Friday, December 8, 2017 5:03 PM To:Jan Hawn; Nate Malone Subject:Fw: December 2017 Update - Renton Attachments:Renton TracFone3MethodologyA.doc Hi Jan and Nate, We discovered that we had revised an earlier methodology for TracFone, one that did not include the upgraded population estimation method. Fortunately, we had not sent the one we sent to you to TracFone before the error was discovered. So this is the correct one attached. Sorry about any confusion. Tamara This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Forwarded Message From: TRS <crisp@trs-integrity.com> To: Jan Hawn <jhawn@rentonwa.gov>; Nate Malone <nmalone@rentonwa.gov> Sent: Wednesday, December 6, 2017 4:42 PM Subject: December 2017 Update - Renton Hi Jan and Nate, Hope you have been enjoying the sunshine. Here is the update for December 2017. Let us know if you have any questions. Thanks, Have a great afternoon. Mike 1 -OtEttBIT-33- - 11W: Crisp, Datc-11/5/4420 - -206nrieotr6- 000696 Nate Malone From:TRS <crisp@trs-integrity.com> Sent:Friday, December 8, 2017 5:03 PM To:Jan Hawn; Nate Malone Subject:Fw: December 2017 Update - Renton Attachments:Renton TracFone3MethodologyA.doc Hi Jan and Nate, We discovered that we had revised an earlier methodology for TracFone, one that did not include the upgraded population estimation method. Fortunately, we had not sent the one we sent to you to TracFone before the error was discovered. So this is the correct one attached. Sorry about any confusion. Tamara This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Forwarded Message From: TRS <crisp@trs-integrity.com> To: Jan Hawn <jhawn@rentonwa.gov>; Nate Malone <nmalone@rentonwa.gov> Sent: Wednesday, December 6, 2017 4:42 PM Subject: December 2017 Update - Renton Hi Jan and Nate, Hope you have been enjoying the sunshine. Here is the update for December 2017. Let us know if you have any questions. Thanks, Have a great afternoon. Mike 1 -OtEttBIT-33- - 11W: Crisp, Datc-11/5/4420 - -206nrieotr6- 000696 This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. 2 000697 This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. 2 000697 Nate Malone From:TRS <crisp@trs-integrity.com> Sent:Friday, December 28, 2018 4:13 PM To:Jan Hawn; Nate Malone Subject:TracFone Attachments:TracFone Recommendation to City of Renton.doc Hi Jan and Nate', Hope you are doing well and you had a great Christmas. I had been fighting a bad cold, but now feeling better.I was hoping to have sent our recommendation to you at the middle of December. Let us know if you have any questions. Have a great weekend and a Happy New Year! Thanks. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify thethe person who sent it, and immediately delete it. 1 000735 Nate Malone From:TRS <crisp@trs-integrity.com> Sent:Friday, December 28, 2018 4:13 PM To:Jan Hawn; Nate Malone Subject:TracFone Attachments:TracFone Recommendation to City of Renton.doc Hi Jan and Nate', Hope you are doing well and you had a great Christmas. I had been fighting a bad cold, but now feeling better.I was hoping to have sent our recommendation to you at the middle of December. Let us know if you have any questions. Have a great weekend and a Happy New Year! Thanks. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify thethe person who sent it, and immediately delete it. 1 000735 Recommendations for TracFone Audit for the City of Renton. TRS has been reviewing the State of Washington v. TracFone and the Springfield v. TracFone court cases. In the conclusion section of the court findings in the court case of the State of Washington v. TracFone, it states that: "The true object of TracFone's business was the sale of prepaid wireless telecommunication services, Even though in this situation, the tax dealt with the sales tax, we believe the definition of the company's business activity would still apply to our audit. In the court case of TracFone v. Springfield, the court case dealt with prepaid calling cards and prepaid revenues. In this case, the court decided that the direct sales were taxable and the indirect sales were not taxable per the City of Springfield Municipal Code. It turns out that their code (seen below) is very narrow and not inclusive compared to the definition of Renton's city code. In your code, TRS believes that taxable business would include both indirect and direct taxes. The indirect sales would include sales to customers via companies such as Target where Target sells the TracFone Prepaid cards to the customer. These revenues come to about 80% of the audit. The indirect sales is about 20% of the audit and this would include sales directly from TracFone to their customer. Section 70-452 of the City of Springfield Municipal Code states: "Every person engaged in the business of supplying telephones, and telecommunications and telephonic service, and telecommunications services, within the city shall pay as a license tax a sum equal to six percent of the gross receipts from such business." Section 70-452 was last amended in 1968, although re -codified in 2000 to include the words "telecommunications" and "telecommunications service." Compared to your code which partly states: The providing by any person of access to the local telephone network, local telephone network switching service, toll service, cellular telephone service, or coin telephone services, or the providing of telephonic, video, data or similar communication or transmission for hire, via a local telephone network, toll line or channel, cable, microwave, or similar communication or transmission system. It further indicates cooperative or farmer line telephone companies or associations operating an exchange. "Network telephone service" includes interstate service, including toll service, originating from or received on telecommunications equipment or apparatus in this State if the charge for the service is billed to a person in this State. "Network telephone service" does not include the providing of competitive telephone service, the providing of cable television service, nor the providing of broadcast services by radio or television stations. In the Springfied court case, it was stated that companies such as Target and Walmart would be telephone companies and are selling telecommunications. However, TRS talked with Walmart, and they assured TRS that they only sell the card but they are not selling telecommunications, and if a customer has any problems with the telephone prepaid card, that the customer would have to contact TracFone. In addition, as can be seen clearly at their website, TracFone controls all aspects and terms 000736 Recommendations for TracFone Audit for the City of Renton. TRS has been reviewing the State of Washington v. TracFone and the Springfield v. TracFone court cases. In the conclusion section of the court findings in the court case of the State of Washington v. TracFone, it states that: "The true object of TracFone's business was the sale of prepaid wireless telecommunication services, Even though in this situation, the tax dealt with the sales tax, we believe the definition of the company's business activity would still apply to our audit. In the court case of TracFone v. Springfield, the court case dealt with prepaid calling cards and prepaid revenues. In this case, the court decided that the direct sales were taxable and the indirect sales were not taxable per the City of Springfield Municipal Code. It turns out that their code (seen below) is very narrow and not inclusive compared to the definition of Renton's city code. In your code, TRS believes that taxable business would include both indirect and direct taxes. The indirect sales would include sales to customers via companies such as Target where Target sells the TracFone Prepaid cards to the customer. These revenues come to about 80% of the audit. The indirect sales is about 20% of the audit and this would include sales directly from TracFone to their customer. Section 70-452 of the City of Springfield Municipal Code states: "Every person engaged in the business of supplying telephones, and telecommunications and telephonic service, and telecommunications services, within the city shall pay as a license tax a sum equal to six percent of the gross receipts from such business." Section 70-452 was last amended in 1968, although re -codified in 2000 to include the words "telecommunications" and "telecommunications service." Compared to your code which partly states: The providing by any person of access to the local telephone network, local telephone network switching service, toll service, cellular telephone service, or coin telephone services, or the providing of telephonic, video, data or similar communication or transmission for hire, via a local telephone network, toll line or channel, cable, microwave, or similar communication or transmission system. It further indicates cooperative or farmer line telephone companies or associations operating an exchange. "Network telephone service" includes interstate service, including toll service, originating from or received on telecommunications equipment or apparatus in this State if the charge for the service is billed to a person in this State. "Network telephone service" does not include the providing of competitive telephone service, the providing of cable television service, nor the providing of broadcast services by radio or television stations. In the Springfied court case, it was stated that companies such as Target and Walmart would be telephone companies and are selling telecommunications. However, TRS talked with Walmart, and they assured TRS that they only sell the card but they are not selling telecommunications, and if a customer has any problems with the telephone prepaid card, that the customer would have to contact TracFone. In addition, as can be seen clearly at their website, TracFone controls all aspects and terms 000736 of the telecommunications provided by TracFone, even when the sale of the calling card is through a company such as Target. In another statement in the State of Washington v. Tracfone court case: ¶ 2 TracFone sells cell phones and prepaid wireless telephone services. It does not own or operate any wireless network facilities but instead contracts with other radio communication service companies to provide wireless telephone service and radio access lines and then resells the service. As of 2004, TracFone provided wireless service by reselling service offered by more than 35 licensed network operations in the United States. TracFone's prepaid wireless services and handsets are sold through more than 70,000 retail locations in this country, as well as through its Internet site. Approximately 30,000 cell phones are sold in this fashion every month. ¶ 3 The retailers also sell airtime cards for use with TracFone's cell phones. These cards have no value until activated upon sale to the subscriber. Activation requires that the subscriber provide TracFone with the cell phone's serial number and the zip code in which the subscriber will primarily use the cell phone. TracFone chooses an underlying carrier for the area and sends a code to the cell phone that programs it with the correct home area, telephone number, and rating information. Once a TracFone cell phone is active, a subscriber may purchase additional airtime minute cards in increments of 30 to 400 minutes or by contacting TracFone and adding additional time. TracFone retains the right to modify or cancel the service for any reason at any time. 4 A TracFone cell phone has a service end date. TracFone contacts its subscribers to notify them of pending end dates. Airtime minutes must be used prior to expiration of the service end date or they expire. If minutes are not used and no new minutes are added prior to expiration, the service is deactivated. For example, the service period for a 60 minute airtime card is 90 days. If the subscriber does not add additional minutes prior to the service end date, 90 days after activation, the cell phone is deactivated and any remaining minutes are lost. If the subscriber does purchase additional airtime prior to the service end date, the end date is extended by the service period that applies for the number of minutes added. Because of information such as that above, we believe TracFone owes the whole of taxes on both direct and indirect sales. TRS has been working with the City of Renton concerning the tax -ability of prepaid revenues. Currently, Tracfone has not paid your city any taxes for the revenues that they have received for conducting business activity inside your city. The original audit was for the period of January 1, 2007 through May 31, 2013. The second audit was for the period of June 1 2013 through October 31, 2017. Since TracFone has not consented with paying the initial amount due for the audit, TRS would recommend that the City of Renton open up another audit to cover the additional time that has passed (and come up with an estimate) or if there is a settlement, to have TRS come up with an estimate to bring TracFone current with their taxes due to the City of Renton. Or if you like, we can continue to hold off a little longer to see if another city will bring up a case against TracFone. Whatever the City of Renton would like TRS to do, TR.S is prepared to move forward with their direction. 000737 of the telecommunications provided by TracFone, even when the sale of the calling card is through a company such as Target. In another statement in the State of Washington v. Tracfone court case: ¶ 2 TracFone sells cell phones and prepaid wireless telephone services. It does not own or operate any wireless network facilities but instead contracts with other radio communication service companies to provide wireless telephone service and radio access lines and then resells the service. As of 2004, TracFone provided wireless service by reselling service offered by more than 35 licensed network operations in the United States. TracFone's prepaid wireless services and handsets are sold through more than 70,000 retail locations in this country, as well as through its Internet site. Approximately 30,000 cell phones are sold in this fashion every month. ¶ 3 The retailers also sell airtime cards for use with TracFone's cell phones. These cards have no value until activated upon sale to the subscriber. Activation requires that the subscriber provide TracFone with the cell phone's serial number and the zip code in which the subscriber will primarily use the cell phone. TracFone chooses an underlying carrier for the area and sends a code to the cell phone that programs it with the correct home area, telephone number, and rating information. Once a TracFone cell phone is active, a subscriber may purchase additional airtime minute cards in increments of 30 to 400 minutes or by contacting TracFone and adding additional time. TracFone retains the right to modify or cancel the service for any reason at any time. 4 A TracFone cell phone has a service end date. TracFone contacts its subscribers to notify them of pending end dates. Airtime minutes must be used prior to expiration of the service end date or they expire. If minutes are not used and no new minutes are added prior to expiration, the service is deactivated. For example, the service period for a 60 minute airtime card is 90 days. If the subscriber does not add additional minutes prior to the service end date, 90 days after activation, the cell phone is deactivated and any remaining minutes are lost. If the subscriber does purchase additional airtime prior to the service end date, the end date is extended by the service period that applies for the number of minutes added. Because of information such as that above, we believe TracFone owes the whole of taxes on both direct and indirect sales. TRS has been working with the City of Renton concerning the tax -ability of prepaid revenues. Currently, Tracfone has not paid your city any taxes for the revenues that they have received for conducting business activity inside your city. The original audit was for the period of January 1, 2007 through May 31, 2013. The second audit was for the period of June 1 2013 through October 31, 2017. Since TracFone has not consented with paying the initial amount due for the audit, TRS would recommend that the City of Renton open up another audit to cover the additional time that has passed (and come up with an estimate) or if there is a settlement, to have TRS come up with an estimate to bring TracFone current with their taxes due to the City of Renton. Or if you like, we can continue to hold off a little longer to see if another city will bring up a case against TracFone. Whatever the City of Renton would like TRS to do, TR.S is prepared to move forward with their direction. 000737 ) Nate Malone From:TRS <crisp@trs-integrity.com> Sent:Wednesday, February 6, 2019 4:44 PM To:Nate Malone Cc:Jan Hawn Subject:February 2019 Update and TracFone Recommendation Attachments:February 6, 2019 Update Renton.pdf; TracFone Recommendation to City of Renton-1.doc Hi Nate, Hope you are doing well. Here is the update for February 2019. I also thought I sent you the recommendation for TracFone, but I can't see where I sent it, so I have included a copy with this email. Let me know if you have any questions. Thanks Nate. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. 1 000745 ) Nate Malone From:TRS <crisp@trs-integrity.com> Sent:Wednesday, February 6, 2019 4:44 PM To:Nate Malone Cc:Jan Hawn Subject:February 2019 Update and TracFone Recommendation Attachments:February 6, 2019 Update Renton.pdf; TracFone Recommendation to City of Renton-1.doc Hi Nate, Hope you are doing well. Here is the update for February 2019. I also thought I sent you the recommendation for TracFone, but I can't see where I sent it, so I have included a copy with this email. Let me know if you have any questions. Thanks Nate. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. 1 000745 Recommendations for TracFone Audit for the City of Renton. TRS has been reviewing the State of Washington v. TracFone and the Springfield v. TracFone court cases. In the conclusion section of the court findings in the court case of the State of Washington v. TracFone, it states that: "The true object of TracFone's business was the sale of prepaid wireless telecommunication services, Even though in this situation, the tax dealt with the sales tax, we believe the definition of the company's business activity would still apply to our audit. In the court case of TracFone v. Springfield, the court case dealt with prepaid calling cards and prepaid revenues. In this case, the court decided that the direct sales were taxable and the indirect sales were not taxable per the City of Springfield Municipal Code. It turns out that their code (seen below) is very narrow and not inclusive compared to the definition of Renton's city code. In your code, TRS believes that taxable business would include both indirect and direct taxes. The indirect sales would include sales to customers via companies such as Target where Target sells the TracFone Prepaid cards to the customer. These revenues come to about 80% of the audit. The indirect sales is about 20% of the audit and this would include sales directly from TracFone to their customer. Section 70-452 of the City of Springfield Municipal Code states: "Every person engaged in the business of supplying telephones, and telecommunications and telephonic service, and telecommunications services, within the city shall pay as a license tax a sum equal to six percent of the gross receipts from such business." Section 70-452 was last amended in 1968, although re -codified in 2000 to include the words "telecommunications" and "telecommunications service." Compared to your code which partly states: 5-11-1 UTILITY TAX: In addition to the license fees provided elsewhere in this Title, there is hereby levied upon and shall be collected from the business enterprises engaged in certain business activities and occupations described in this Section, taxes in the amounts to be determined by the application of the rates herein stated against gross income. In computing said tax the business enterprise may deduct in computing gross income the actual amount of credit losses and uncollectibles sustained by the business enterprise, and amounts derived from transactions in interstate and foreign commerce which the City is prohibited from taxing under the laws and Constitution of the United States. The amount of tax shall be computed as follows: (Ord. 3773, 12-19-83, eff. 1- 1-84) A.Telephone Utility Tax: 1 The utility tax for the privilege of conducting a telephone business within the City limits shall be six percent (6%). 2.Definitions: For the purpose of this Section the following terms shall be defined as follows: 000746 Recommendations for TracFone Audit for the City of Renton. TRS has been reviewing the State of Washington v. TracFone and the Springfield v. TracFone court cases. In the conclusion section of the court findings in the court case of the State of Washington v. TracFone, it states that: "The true object of TracFone's business was the sale of prepaid wireless telecommunication services, Even though in this situation, the tax dealt with the sales tax, we believe the definition of the company's business activity would still apply to our audit. In the court case of TracFone v. Springfield, the court case dealt with prepaid calling cards and prepaid revenues. In this case, the court decided that the direct sales were taxable and the indirect sales were not taxable per the City of Springfield Municipal Code. It turns out that their code (seen below) is very narrow and not inclusive compared to the definition of Renton's city code. In your code, TRS believes that taxable business would include both indirect and direct taxes. The indirect sales would include sales to customers via companies such as Target where Target sells the TracFone Prepaid cards to the customer. These revenues come to about 80% of the audit. The indirect sales is about 20% of the audit and this would include sales directly from TracFone to their customer. Section 70-452 of the City of Springfield Municipal Code states: "Every person engaged in the business of supplying telephones, and telecommunications and telephonic service, and telecommunications services, within the city shall pay as a license tax a sum equal to six percent of the gross receipts from such business." Section 70-452 was last amended in 1968, although re -codified in 2000 to include the words "telecommunications" and "telecommunications service." Compared to your code which partly states: 5-11-1 UTILITY TAX: In addition to the license fees provided elsewhere in this Title, there is hereby levied upon and shall be collected from the business enterprises engaged in certain business activities and occupations described in this Section, taxes in the amounts to be determined by the application of the rates herein stated against gross income. In computing said tax the business enterprise may deduct in computing gross income the actual amount of credit losses and uncollectibles sustained by the business enterprise, and amounts derived from transactions in interstate and foreign commerce which the City is prohibited from taxing under the laws and Constitution of the United States. The amount of tax shall be computed as follows: (Ord. 3773, 12-19-83, eff. 1- 1-84) A.Telephone Utility Tax: 1 The utility tax for the privilege of conducting a telephone business within the City limits shall be six percent (6%). 2.Definitions: For the purpose of this Section the following terms shall be defined as follows: 000746 CELLULAR TELEPHONE SERVICE: Cellular telephone service is a two-way voice and data telephone/telecommunications system based in whole or substantially in part on wireless radio communications and which is not subject to regulation by the Washington Utilities and Transportation Commission (WUTC). This includes cellular mobile service. The definition of "cellular mobile service" includes other wireless radio communications services such as specialized mobile radio (SMR), personal communications services (PCS), and any other evolving wireless radio communications technology which accomplishes a purpose similar to cellular mobile service. COMPETITIVE TELEPHONE SERVICE: The providing by any person of telecommunications equipment or apparatus, or service related to that equipment or apparatus such as repair or maintenance service, if the equipment or apparatus is of a type which can be provided by persons that are not subject to regulation as telephone companies under Title 80 RCW and for which a separate charge is made. Transmission of communication through cellular telephones is classified as "telephone business" rather than "competitive telephone service". TELEPHONE BUSINESS: The providing by any person of access to the local telephone network, local telephone network switching service, toll service, cellular telephone service, or coin telephone services, or the providing of telephonic, video, data or similar communication or transmission for hire, via a local telephone network, toll line or channel, cable, microwave, or similar communication or transmission system. It further indicates cooperative or farmer line telephone companies or associations operating an exchange. "Network telephone service" includes interstate service, including toll service, originating from or received on telecommunications equipment or apparatus in this State if the charge for the service is billed to a person in this State. "Network telephone service" does not include the providing of competitive telephone service, the providing of cable television service, nor the providing of broadcast services by radio or television stations. 5-11-3 DEFINITION OF GROSS INCOME: "Gross income" shall mean the value proceeding or accruing from the sale of tangible property or service, and receipts (including all sums earned or charged, whether received or not) by reason of investment of capital in the business engaged in, including rentals, royalties, fees or other emoluments, however designated (excluding receipts or proceeds from the use or sale of real property or any interest therein, and proceeds from the sale of notes, bonds, mortgages or other evidence of indebtedness, or stocks and the like) and without any deduction on account of the cost of the property sold, cost of materials used, labor costs, interest or discount paid, taxes, or any expenses whatsoever, and without any deduction on account of losses. This definition shall apply as of March 1, 2000. (Ord. 4825, 12-20-99; amd. Ord. 4873, 11-20-00) In the Springfied court case, it was stated that companies such as Target and Walmart would be telephone companies and are selling telecommunications. However, TRS talked with Walmart, and they assured TRS that they only sell the card but they are not selling telecommunications, and if a customer has any problems with the telephone prepaid card, that the customer would have to contact TracFone. In addition, as can be seen clearly at their vvebsite, TracFone controls all aspects and terms of the telecommunications provided by TracFone, even when the sale of the calling card is through a company such as Target. In another statement in the State of Washington v. Tracfone court case: 000747 CELLULAR TELEPHONE SERVICE: Cellular telephone service is a two-way voice and data telephone/telecommunications system based in whole or substantially in part on wireless radio communications and which is not subject to regulation by the Washington Utilities and Transportation Commission (WUTC). This includes cellular mobile service. The definition of "cellular mobile service" includes other wireless radio communications services such as specialized mobile radio (SMR), personal communications services (PCS), and any other evolving wireless radio communications technology which accomplishes a purpose similar to cellular mobile service. COMPETITIVE TELEPHONE SERVICE: The providing by any person of telecommunications equipment or apparatus, or service related to that equipment or apparatus such as repair or maintenance service, if the equipment or apparatus is of a type which can be provided by persons that are not subject to regulation as telephone companies under Title 80 RCW and for which a separate charge is made. Transmission of communication through cellular telephones is classified as "telephone business" rather than "competitive telephone service". TELEPHONE BUSINESS: The providing by any person of access to the local telephone network, local telephone network switching service, toll service, cellular telephone service, or coin telephone services, or the providing of telephonic, video, data or similar communication or transmission for hire, via a local telephone network, toll line or channel, cable, microwave, or similar communication or transmission system. It further indicates cooperative or farmer line telephone companies or associations operating an exchange. "Network telephone service" includes interstate service, including toll service, originating from or received on telecommunications equipment or apparatus in this State if the charge for the service is billed to a person in this State. "Network telephone service" does not include the providing of competitive telephone service, the providing of cable television service, nor the providing of broadcast services by radio or television stations. 5-11-3 DEFINITION OF GROSS INCOME: "Gross income" shall mean the value proceeding or accruing from the sale of tangible property or service, and receipts (including all sums earned or charged, whether received or not) by reason of investment of capital in the business engaged in, including rentals, royalties, fees or other emoluments, however designated (excluding receipts or proceeds from the use or sale of real property or any interest therein, and proceeds from the sale of notes, bonds, mortgages or other evidence of indebtedness, or stocks and the like) and without any deduction on account of the cost of the property sold, cost of materials used, labor costs, interest or discount paid, taxes, or any expenses whatsoever, and without any deduction on account of losses. This definition shall apply as of March 1, 2000. (Ord. 4825, 12-20-99; amd. Ord. 4873, 11-20-00) In the Springfied court case, it was stated that companies such as Target and Walmart would be telephone companies and are selling telecommunications. However, TRS talked with Walmart, and they assured TRS that they only sell the card but they are not selling telecommunications, and if a customer has any problems with the telephone prepaid card, that the customer would have to contact TracFone. In addition, as can be seen clearly at their vvebsite, TracFone controls all aspects and terms of the telecommunications provided by TracFone, even when the sale of the calling card is through a company such as Target. In another statement in the State of Washington v. Tracfone court case: 000747 4112 TracFone sells cell phones and prepaid wireless telephone services. It does not own or operate any wireless network facilities but instead contracts with other radio communication service companies to provide wireless telephone service and radio access lines and then resells the service. As of 2004, TracFone provided wireless service by reselling service offered by more than 35 licensed network operations in the United States. TracFone's prepaid wireless services and handsets are sold through more than 70,000 retail locations in this country, as well as through its Internet site. Approximately 30,000 cell phones are sold in this fashion every month. 113 The retailers also sell airtime cards for use with TracFone's cell phones. These cards have no value until activated upon sale to the subscriber. Activation requires that the subscriber provide TracFone with the cell phone's serial number and the zip code in which the subscriber will primarily use the cell phone. TracFone chooses an underlying carrier for the area and sends a code to the cell phone that programs it with the correct home area, telephone number, and rating information. Once a TracFone cell phone is active, a subscriber may purchase additional airtime minute cards in increments of 30 to 400 minutes or by contacting TracFone and adding additional time. TracFone retains the right to modify or cancel the service for any reason at any time. ¶ 4 A TracFone cell phone has a service end date. TracFone contacts its subscribers to notify them of pending end dates. Airtime minutes must be used prior to expiration of the service end date or they expire. If minutes are not used and no new minutes are added prior to expiration, the service is deactivated. For example, the service period for a 60 minute airtime card is 90 days. If the subscriber does not add additional minutes prior to the service end date, 90 days after activation, the cell phone is deactivated and any remaining minutes are lost. If the subscriber does purchase additional airtime prior to the service end date, the end date is extended by the service period that applies for the number of minutes added. Because of information such as that above, we believe TracFone owes the whole of taxes on both direct and indirect sales. TRS has been working with the City of Renton concerning the tax -ability of prepaid revenues. Currently, Tracfone has not paid your city any taxes for the revenues that they have received for conducting business activity inside your city. Since TracFone has not consented with paying the initial amount due for the audit, TRS would recommend that the City of Renton open up another audit to cover the additional time that has passed (and come up with an estimate) or if there is a settlement, to have TRS come up with an estimate to bring Tracfone current with their taxes due to the City of Renton. Or if you like, we can continue to hold off a little longer to see if another city will bring up a case against TracFone. Whatever the City of Renton would like TRS to do, TRS is prepared to move forward with their direction. 000748 4112 TracFone sells cell phones and prepaid wireless telephone services. It does not own or operate any wireless network facilities but instead contracts with other radio communication service companies to provide wireless telephone service and radio access lines and then resells the service. As of 2004, TracFone provided wireless service by reselling service offered by more than 35 licensed network operations in the United States. TracFone's prepaid wireless services and handsets are sold through more than 70,000 retail locations in this country, as well as through its Internet site. Approximately 30,000 cell phones are sold in this fashion every month. 113 The retailers also sell airtime cards for use with TracFone's cell phones. These cards have no value until activated upon sale to the subscriber. Activation requires that the subscriber provide TracFone with the cell phone's serial number and the zip code in which the subscriber will primarily use the cell phone. TracFone chooses an underlying carrier for the area and sends a code to the cell phone that programs it with the correct home area, telephone number, and rating information. Once a TracFone cell phone is active, a subscriber may purchase additional airtime minute cards in increments of 30 to 400 minutes or by contacting TracFone and adding additional time. TracFone retains the right to modify or cancel the service for any reason at any time. ¶ 4 A TracFone cell phone has a service end date. TracFone contacts its subscribers to notify them of pending end dates. Airtime minutes must be used prior to expiration of the service end date or they expire. If minutes are not used and no new minutes are added prior to expiration, the service is deactivated. For example, the service period for a 60 minute airtime card is 90 days. If the subscriber does not add additional minutes prior to the service end date, 90 days after activation, the cell phone is deactivated and any remaining minutes are lost. If the subscriber does purchase additional airtime prior to the service end date, the end date is extended by the service period that applies for the number of minutes added. Because of information such as that above, we believe TracFone owes the whole of taxes on both direct and indirect sales. TRS has been working with the City of Renton concerning the tax -ability of prepaid revenues. Currently, Tracfone has not paid your city any taxes for the revenues that they have received for conducting business activity inside your city. Since TracFone has not consented with paying the initial amount due for the audit, TRS would recommend that the City of Renton open up another audit to cover the additional time that has passed (and come up with an estimate) or if there is a settlement, to have TRS come up with an estimate to bring Tracfone current with their taxes due to the City of Renton. Or if you like, we can continue to hold off a little longer to see if another city will bring up a case against TracFone. Whatever the City of Renton would like TRS to do, TRS is prepared to move forward with their direction. 000748 Nate Malone From:Nate Malone <nmalone@rentonwa.gov> Sent:Thursday, February 7, 2019 2:52 PM To:'TRS' Cc:Jan Hawn Subject:RE: February 2019 Update and TracFone Recommendation Hi Mike, I think we should move forward with issuing the assessment for the audit as completed through October 2017. We can adjust more current periods once we have a resolution on the audit results. Thank you, Nate Malone Tax & License Program Manager City of Renton 1055 S Grady Way Renton, WA 98057 (425) 430-6936 From: TRS <crisp@trs-integrity.com> Sent: Wednesday, February 6, 2019 4:44 PM To: Nate Malone <NMalone@Rentonwa.gov> Cc: Jan Hawn <JHawn@Rentonwa.gov> Subject: February 2019 Update and TracFone Recommendation Hi Nate, Hope you are doing well. Here is the update for February 2019. I also thought I sent you the recommendation for TracFone, but I can't see where I sent it, so I have included a copy with this email. Let me know if you have any questions. Thanks Nate. Have a great afternoon. 1 000749 Nate Malone From:Nate Malone <nmalone@rentonwa.gov> Sent:Thursday, February 7, 2019 2:52 PM To:'TRS' Cc:Jan Hawn Subject:RE: February 2019 Update and TracFone Recommendation Hi Mike, I think we should move forward with issuing the assessment for the audit as completed through October 2017. We can adjust more current periods once we have a resolution on the audit results. Thank you, Nate Malone Tax & License Program Manager City of Renton 1055 S Grady Way Renton, WA 98057 (425) 430-6936 From: TRS <crisp@trs-integrity.com> Sent: Wednesday, February 6, 2019 4:44 PM To: Nate Malone <NMalone@Rentonwa.gov> Cc: Jan Hawn <JHawn@Rentonwa.gov> Subject: February 2019 Update and TracFone Recommendation Hi Nate, Hope you are doing well. Here is the update for February 2019. I also thought I sent you the recommendation for TracFone, but I can't see where I sent it, so I have included a copy with this email. Let me know if you have any questions. Thanks Nate. Have a great afternoon. 1 000749 Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or i f you have received this email in error, please notify the person who sent it, and immediately delete it. 2 000750 Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or i f you have received this email in error, please notify the person who sent it, and immediately delete it. 2 000750 February 14, 2019 Nicholas Ford. TracF one Wireless Tax Department 9700 NW 112th A\ Miami, FL 33178 "Providing cities with experienced research and auditing services" - c -kr \ A -Sr 4=S.Lto `a k"."C:`"1"--%,-.-L' X-A-4. ti j Chic.\\\\c.SS C eVs.1 0.; Re: TracFoneTracFone Wireless utility tax audit, City of Renton Dear Mr. Ford: 6\:'v L.v -Lis 42"\ LLC kJ\ Tax Recovery Services, LLC (TRS) conducted an audit per the City of Renton's Utility Tax Code Title 5 Section 5-11-1 and Section 5-23-4 on TracFone Wireless. TracFone provides telephone services to their customers in the City of Renton. The audit period was from January 1, 2007 through May 31, 2013. Listed below are the principal TracFone Wireless information submittals that TRS analyzed for the tax audit: -Zip code specific sales data for direct sales only: APP sales by zip code for each month Billing Platform sales by zip code for each month Accessory sales by zip code for each month -Company-wide data showing non -direct and direct sales amounts and proportions -Percent of sales representing data use revenue for years 2007 to May 31, 2013 -Percent of sales representing infra -state calling for years 2007 to May 31, 2013 After reviewing the information that was provided by TracFone Wireless and tax returns, it was determined that TracFone did not pay any of the utility taxes that were due to the City of Renton under Utility Tax Code Title 5 Section 5-11-1. The total amount due to the City of Renton is $326,145.06, due and payable to the City of Renton; including $147,108.72 for the taxes, penalty amount of $36,777.30 and an amount of $142,259.04 for interest. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp©TRS-Integrity.com 000473 February 14, 2019 Nicholas Ford. TracF one Wireless Tax Department 9700 NW 112th A\ Miami, FL 33178 "Providing cities with experienced research and auditing services" - c -kr \ A -Sr 4=S.Lto `a k"."C:`"1"--%,-.-L' X-A-4. ti j Chic.\\\\c.SS C eVs.1 0.; Re: TracFoneTracFone Wireless utility tax audit, City of Renton Dear Mr. Ford: 6\:'v L.v -Lis 42"\ LLC kJ\ Tax Recovery Services, LLC (TRS) conducted an audit per the City of Renton's Utility Tax Code Title 5 Section 5-11-1 and Section 5-23-4 on TracFone Wireless. TracFone provides telephone services to their customers in the City of Renton. The audit period was from January 1, 2007 through May 31, 2013. Listed below are the principal TracFone Wireless information submittals that TRS analyzed for the tax audit: -Zip code specific sales data for direct sales only: APP sales by zip code for each month Billing Platform sales by zip code for each month Accessory sales by zip code for each month -Company-wide data showing non -direct and direct sales amounts and proportions -Percent of sales representing data use revenue for years 2007 to May 31, 2013 -Percent of sales representing infra -state calling for years 2007 to May 31, 2013 After reviewing the information that was provided by TracFone Wireless and tax returns, it was determined that TracFone did not pay any of the utility taxes that were due to the City of Renton under Utility Tax Code Title 5 Section 5-11-1. The total amount due to the City of Renton is $326,145.06, due and payable to the City of Renton; including $147,108.72 for the taxes, penalty amount of $36,777.30 and an amount of $142,259.04 for interest. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp©TRS-Integrity.com 000473 Please submit the amount of $326,145.06 to the City of Renton within 20 days. The audit of TracFone Wireless utility taxes remitted to the City of Renton, Washington was conducted according to Generally Accepted Accounting Principals, federal laws and regulations, and the laws and regulations of the State of Washington and of the City of Renton, Washington. In addition, please continue to file and report all taxable business activity under Title 5 Section 5-11-1 of the City of Renton Municipal Code. We would like to thank you and your staff for your help in this audit. If you have any questions, I can be reached at (253) 223-4986. Sincerely, Michael J. Crisp President Tax Recovery Services, LLC cc: Nate Malone (253) 2214986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000474 Please submit the amount of $326,145.06 to the City of Renton within 20 days. The audit of TracFone Wireless utility taxes remitted to the City of Renton, Washington was conducted according to Generally Accepted Accounting Principals, federal laws and regulations, and the laws and regulations of the State of Washington and of the City of Renton, Washington. In addition, please continue to file and report all taxable business activity under Title 5 Section 5-11-1 of the City of Renton Municipal Code. We would like to thank you and your staff for your help in this audit. If you have any questions, I can be reached at (253) 223-4986. Sincerely, Michael J. Crisp President Tax Recovery Services, LLC cc: Nate Malone (253) 2214986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000474 "Providing cities with experienced research and auditing services" February 14, 2019 Nicholas FOrd TracF one Wireless Tax Department 9700 NW 112' Avenue Miami, FL 33178 Dear Mr. Ford: LLC Please find enclosed the results of the City of Renton's audit of the tax periods January 1, 2007 through May 31, 2013. The total amount due is $326,145.06. Please remit the amount due within 20 days of receipt of this tax assessment to the City of Renton at the following address: Nate Malone Tax and License Program Manager City of Renton Finance Department Renton City Hall 1055 South Grady Way Renton WA 98057 Thank you for your assistance in completing this audit. If you have any questions, 1. can be reached at (253) 223-4986 or you can contact Mr. Malone at the City of Renton at (425) 430-6936. Sincerely, Michael J. Crisp President Tax Recovery Services, LLC cc: Nate Malone 000475 "Providing cities with experienced research and auditing services" February 14, 2019 Nicholas FOrd TracF one Wireless Tax Department 9700 NW 112' Avenue Miami, FL 33178 Dear Mr. Ford: LLC Please find enclosed the results of the City of Renton's audit of the tax periods January 1, 2007 through May 31, 2013. The total amount due is $326,145.06. Please remit the amount due within 20 days of receipt of this tax assessment to the City of Renton at the following address: Nate Malone Tax and License Program Manager City of Renton Finance Department Renton City Hall 1055 South Grady Way Renton WA 98057 Thank you for your assistance in completing this audit. If you have any questions, 1. can be reached at (253) 223-4986 or you can contact Mr. Malone at the City of Renton at (425) 430-6936. Sincerely, Michael J. Crisp President Tax Recovery Services, LLC cc: Nate Malone 000475 City of Renton, WashingtonDepartment of FinanceField Auditor's ReportSTE,MARY S, -MEETPeriod of Adjustments:January 01, 2007 through May 31, 2013Firm Name:Tracfone WirelessBusiness Address:Tax Department9700 NW 112th AvenueMiami, FL33178'Nicholas Ford, Sr. Tax ManagerRegistrationClasses200720082009201020112012201320142018T 0 T A LUTILITY TAXRounding$8,115.54$12,567.55$17,132.00020,600.42031,450.30$33,941.69$14,301.23$0.00$0.00$147,108.73-00.01Corrected TaxReported Tax$8,115.54$0.00$12,567.55017,132.00$29,600.42$0.00$31,450.30$0.00$33,941.6900.00$14,301.23$0.00$0.00$0.00$147,108.73$0.00DE8IT1(CREDIT)88,115.54012,567.55017,132.00-$29,600.42$31,450.30033,941.69$14,301.23$0.00$0.0000.00$147,108.72Date:Q. \ 1,1 \ ' :,-T,\Audit submitted by:Michael 3. Crisp,...--REMARKS:YEARYEARLYNITRES? 001 (CR.TOTALS20072008200920102011201220130$10,469.05915,902.62$19,735.03$30,446.32$29,730.46$26,844.69010,130.87Total InterestDr)Cr):$142,259.04Total. Tax (Shown Above) DR/(CR)$147,108.72Total Penalty (Per CabSheet)Dr./(Cr.)$36,777.30Total Due$336,145.06ExtensionsDr. NotedDate_ReviewerCr. NotedClassi17---RoursDate_CodeCity of Renton, WashingtonDepartment of FinanceField Auditor's ReportSTE,MARY S, -MEETPeriod of Adjustments:January 01, 2007 through May 31, 2013Firm Name:Tracfone WirelessBusiness Address:Tax Department9700 NW 112th AvenueMiami, FL33178'Nicholas Ford, Sr. Tax ManagerRegistrationClasses200720082009201020112012201320142018T 0 T A LUTILITY TAXRounding$8,115.54$12,567.55$17,132.00020,600.42031,450.30$33,941.69$14,301.23$0.00$0.00$147,108.73-00.01Corrected TaxReported Tax$8,115.54$0.00$12,567.55017,132.00$29,600.42$0.00$31,450.30$0.00$33,941.6900.00$14,301.23$0.00$0.00$0.00$147,108.73$0.00DE8IT1(CREDIT)88,115.54012,567.55017,132.00-$29,600.42$31,450.30033,941.69$14,301.23$0.00$0.0000.00$147,108.72Date:Q. \ 1,1 \ ' :,-T,\Audit submitted by:Michael 3. Crisp,...--REMARKS:YEARYEARLYNITRES? 001 (CR.TOTALS20072008200920102011201220130$10,469.05915,902.62$19,735.03$30,446.32$29,730.46$26,844.69010,130.87Total InterestDr)Cr):$142,259.04Total. Tax (Shown Above) DR/(CR)$147,108.72Total Penalty (Per CabSheet)Dr./(Cr.)$36,777.30Total Due$336,145.06ExtensionsDr. NotedDate_ReviewerCr. NotedClassi17---RoursDate_Code TAX, PENALTY I t INTEREST SCHEDULECOMPUTATIONS2007 Page 1 of 7Tracfone WirelessJanuaryPohl -naryMarchApril MayJuneJuly August September OctoberNovember December TotalUTILITY :Revenue Pe r Da ta Sheet$10,903 .4469,996 .67511,441 .175931206$8,446 .39510,818 .78610,502 .50$9,996.22$12.590.50$11,040.22515.163.11$14,448.06$136,259.12Deductions:Total Taxab le Revenue :$10,903 .4439,996.67$11,441.1755,9120658,446 .39$10,818 .78510,50250$9,996.22$12590.50611,040.22$15163.11914,448.069135,259.12Tax Due:$654.21$544806686.47$594.728506.78$649.13$630.155599,775755.43$682.41$909.7991366. 88 58,11954Tea Paid$0.00$0.0050.0050.00$0.00$0.00$0.00$0.0050.00$0.00$0.00$0.00$0.00DIFFERENCE:$654.21$596806686.475994.72$505.78$649.13$630.15$599.77$755.43$68141$909.795866.885E115.54RounSogTOTAL TAX DUE1(CR )8654,212099.805686.475594.725506.78$549.13$630.15$599.775755.439682.41$909.79$866.889.115.54INTEREST :Note: Ren ton does not cha rge in terest previous to May 2038. In tere st Rate:129.0s129.0%129.0%129.0%129.0%129.0%129.0%129.0%129.0%129.0%129.0%129.0%Interest Due :$943.935773.745885.555767.195653.759633728581289$773.70$974.50S851.51$1,173 .6331,11829$10,469.05PENALTY:Penalty Rate :0.250.250.250.250.250.250250.250.250.250.250.25Penalty Due :$163.55$149.95$171.62$148.68$126.70$162.28$157.54$14964$188.86$166.605227.46521672$2,028.89Penalty PaidDIFFERENCE:$163.55$149.95$171.623148686126.70516228S15754$149.94$188.86maw9227.455216.72$2,028.89TOTALTAX, INTEREST ANDpENALTY DUEXCREDIT) :$1,661 .69$1,523.49$1,743.64$1,510.59$1.287 .23$1,648.79$1,600 .58$1,523.41$1,918.79$168252$2310.8752,201 .86$20,613.48TAX, PENALTY I t INTEREST SCHEDULECOMPUTATIONS2007 Page 1 of 7Tracfone WirelessJanuaryPohl -naryMarchApril MayJuneJuly August Septembe r OctoberNovemberDecemberTota lUTILITY :Revenue Per Data Sheet$10,903 .4469,996.67511,441 .175931206$8,446 .39510,818.78610,502 .50$9,996.22$12.590.50$11,040.22515.163.11$14,448.06$136,259.12Deductions:Tota l Taxab le Revenue :$10,903 .4439,996.67$11,441.1755,9120658,446 .39$10,818.78510,50250$9,996.22$12590.50611,040.22$15163.11914,448.069135,259.12Tax Due:$654.21$544806686.47$594.728506.78$649.13$630.155599,775755.43$682.41$909.7991366.8858,11954Tea Paid $0.00$0.0050.0050.00$0.00$0.00$0.00$0.0050.00$0.00$0.00$0.00$0.00DIFFERENCE:$654.21$596806686.475994.72$505.78$649.13$630.15$599.77$755.43$68141$909.795866.885E115.54RounSogTOTAL TAX DUE1(CR )8654,212099.805686.475594.725506.78$549.13$630.15$599.775755.439682.41$909.79$866.889.115.54INTEREST:Note: Ren ton does not cha rge in terest prev ious to May 2038.Interest Rate:129.0s129.0%129.0%129.0%129.0%129.0%129.0%129.0%129.0%129.0%129.0%129.0%Interest Due :$943.935773.745885.555767.195653.759633728581289$773.70$974.50S851.51$1,173.6331,11829$10,469.05PENALTY:Penalty Rate :0.250.250.250.250.250.250250.250.250.250.250.25Penalty Due :$163.55$149.95$171.62$148.68$126.70$162.28$157.54$14964$188.86$166.605227.46521672$2,028 .89Penalty PaidDIFFERENCE:$163.55$149.95$171.623148686126.70516228S15754$149.94$188.86maw9227.455216.72$2,028.89TOTALTAX, INTEREST ANDpENALTY DUEXCREDIT ) :$1,661.69$1,523.49$1,743.64$1,510.59$1.287 .23$1,648 .79$1,600.58$1,523.41$1,918.79$168252$2310.8752,201.86$20,613.48 CONTractone W irelessUTIL ITY :JanuaryFebruary MarchAPO'TAX, PENALTY & INTEREST SCHEDULECOMPUTATIONS2008May-JuneJuly August September October NovemberDecember 0Page 2 of 7TotalRevenue Pe r Data Sheet$1668718$18,033 .82$18,476.00S18,658.41$17,930.53516,518.41816,902 .76516.471 .47517,768 .18517,890.65$18,231A1$20,890.53$209,459.35Deductions:Tota l Taxab le Revenue :$t3,587.18518,033 .82$18,47600516,658.41517,930.53516,51641$16,902 .76516,471 .47517,788 .18517,890.65$1E251.41$2E890.53$209,459.35Tax Due;$821.2351,082.03$1,108.56$999.5061,075 .83$991.10$1,014.17$988.29$1,066.09$1,073.44$1,093 .88$1,253 .43$12,567.55Tax Paid$0.00$uit]$0.0050.0050.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00DIFFERENCE:3621.23$1,082.03$1,108.56$999.5051,07593$991.10$1,014.17$988.29$1,058.0931,0734461,093 .88$1,253 .43$12567.55RoundingTOTAL TAX DUE /(CR )$82123$1,082.03$1,108.563999.5051.07583$991.1051014.17998E2951,066.09$1,07144$1,093 .88$1,253 .43$12,567.55 INTEREST :Note Renton does no t charge inte res t p rev ious to May 2008 .armrest Rate:1299%129.0%129.0%129.0%129.0%128.0%127.0%126.0%125.0%124.0%123.0%122.0%Inte rest Due:stossse51,39592$1,430.04$1,289 .38$1,387 .82$1,268.61$1288.00$1,24525$1,332.61$1,831.07$1,345.4751,529 .18515,9028ePENALTY:Penal ty Ra te:025.0.250250.250.250.250.250.250.250.250.25"0.25Penalty Due:520531$270.518377.145249.886268.965247.785253.54124707525E526268.36$273.475313.3653.141.90Penal ty Pa id :DIFFERENCE:$205.31$270.515277.141249.885288.965247.786253.545247,078288.525268.35$273.475313.38$3,141.90TOTAL TAX, INTEREST ANDPENALTY DUE(CRElaf f ) :$2,085.5352,7463562,815.7452,538 .7412732.6152,507.4962,555.7152,480.6152,865.22$2,672 .87$271282$3,095.97531,612.07CONTractone WirelessUTIL ITY :JanuaryFebruary MarchAPO'TAX, PENALTY & INTEREST SCHEDULECOMPUTATIONS2008May-JuneJuly August September October NovemberDecember0Page 2 of 7TotalRevenue Per Data Sheet$1668718$18,033 .82$18,476 .00S18,658.41$17,930.53516,518 .41816,902 .76516.471 .47517,768 .18517,890.65$18,231A1$20,890.53$209,459.35Deductions:Tota l Taxab le Revenue :$t3,587.18518,033 .82$18,47600516,658.41517,930.53516,51641$16,902 .76516,471 .47517,788 .18517,890.65$1E251.41$2E890.53$209,459.35Tax Due;$821.2351,082.03$1,108.56$999.5061,075 .83$991.10$1,014 .17$988.29$1,066.09$1,073.44$1,093.88$1,253 .43$12,567.55Tax Paid$0.00$uit]$0.0050.0050.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00DIFFERENCE:3621.23$1,082.03$1,108.56$999.5051,07593$991.10$1,014 .17$988.29$1,058.0931,0734461,093.88$1,253.43$12567.55RoundingTOTAL TAX DUE /(CR )$82123$1,082 .03$1,108.563999.5051.07583$991.1051014.17998E2951,066.09$1,07144$1,093.88$1,253 .43$12,567.55 INTEREST:Note Renton does no t charge inte rest p revious to May 2008 .armrest Rate:1299%129.0%129.0%129.0%129.0%128.0%127.0%126.0%125.0%124.0%123.0%122.0%Interest Due:stossse51,39592$1,430.04$1,289.38$1,387 .82$1,268.61$1288.00$1,24525$1,332.61$1,831.07$1,345.4751,529 .18515,9028ePENALTY:Penalty Ra te :025.0.250250.250.250.250.250.250.250.250.25 "0.25Penalty Due:520531$270.518377.145249.886268.965247.785253.54124707525E526268.36$273.475313.3653.141 .90Penalty Paid :DIFFERENCE:$205.31$270.515277.141249.885288.965247.786253.545247,078288.525268.35$273.475313.38$3,141 .90TOTAL TAX, INTEREST ANDPENALTY DUE(CRElaf f) :$2,085.5352,7463562,815.7452,538 .7412732.6152,507.4962,555.7152,480.6152,865.22$2,672.87$271282$3,095.97531,612.07 Tracfone WirelessUMW:JanuaryFebruaryMarchApril TAX, PENALTY & INTEREST SCHEDULECOMPUTATIONS2009MayJuneJu ly August SeptemberOctoberNovemberDecember Page 3 of 7TotalRevenue Per Data Sheet$20,668 .67$16,220.17322,491.23522,352.33S26,354.83$25.087 .00$25,527 .44$24,811.67$26,292.50$23,876.00$23.733.67128,11912$285,533.28Deductions:Total Taxable Revenue:$23,66667$16.220.17122,491.28$22,352.33$26,354.83$25,087 .00825,527 .44$24,811 .67$26,29250$23,876.00$23,733.67$28,119.728285,53328Tax Due :$1,240,003973.2131,349 .4851,341 .14$1,581.29$1.505.22S1,531.6531,4881021,577.5531,4325631.42492$1687.18$17,13203Tax PaidWOO$0.00$0.00$0.00$0.00WOO$0.00$0.0030.03$0.0050.00$0.0090.00DEFERENCE:$1,240.00S973.21$1,349.48$1,341 .14$5,581.29$1,50522$1.531.65$1,488.7051,577.55$1,432 .5631,424.0251,687 .18517,13203Rounding:TOTAL TAX DUEACRY$1,240.00$973.21$1,349 .4851,341 .14$1,581,29$1,505.22$1,531.6551,488.70$1,577.5551,432.56$1,424.0281,687 .18$17,13200INTEREST:Interest Pate121.0%120.0%119.0%118.0%117.0%116.0%115.0%114.0%113.0%112.0%111.0%110.0%Interest Due :$1,500.4031,1678531,6368851,58255$1,850 .11$1,746.06$1,761.4011,697.12$1,782.63$1,604 .47$1,580 .86$1,855.90$19,735 .03PENALTY:Penalty Rate:5250.250.250.250.250.250,250.250.250.250.25025Penalty Due :$310.005243305337.372135.293395.325376.315322.916372.18$394.393356141356.01$421.80$4,283.02Penalty Pa idDIFFERENCE :$310.005243305337.37$335.293395.325376.313382.91$372185394.390358.14$356.01$421.80$4,283.02TOTAL TAX, INTEREST ANDPENALTY DUEJ(CREDR):$3,050,4012,384.3603,292.7353,258.98$3.826.7253,627.5933675.9653,558.0053,754.5753,395.1753360.6983,964.88341,150 .05Tracfone WirelessUMW:JanuaryFebruaryMa rch April TAX, PENALTY & INTEREST SCHEDULECOMPUTATIONS2009MayJuneJulyAugust Septembe r October NovemberDecemberPage 3 of 7TotalRevenue Per Da ta Shee t $20,668.67$16,220.17322,491.23522,352 .33S26,354.83$25.087.00$25,527.44$24,811.67$26,292.50$23,876.00$23.733.67128,11912$285,533.28Deduc t ions:Total Taxable Revenue:$23,66667$16.220.17122,491.28$22,352 .33$26,354 .83$25,087.00825,527.44$24,811.67$26,29250$23,876.00$23,733 .67$28,119 .728285,53328Tax Due:$1,240,003973.2131,349.4851,341.14$1,581.29$1.505.22S1,531.6531,4881021,577.5531,4325631.42492$1687.18$17,13203Tax Paid WOO$0.00$0.00$0.00$0.00WOO$0.00$0.0030.03$0.0050.00$0.0090.00DEFERENCE:$1,240.00S973.21$1,349 .48$1,341.14$5,581.29$1,50522$1.531.65$1,488 .7051,577.55$1,432.5631,424.0251,687.18517,13203Rounding :TOTAL TAX DUEACRY$1,240.00$973.21$1,349 .4851,341.14$1,581,29$1,505.22$1,531.6551,488 .70$1,577 .5551,432.56$1,424.0281,687.18$17,13200 INTEREST :Inte res t Pate121.0%120.0%119.0%118.0%117.0%116.0%115.0%114.0%113.0%112.0%111.0%110.0%Inte res t Due :$1,500.4031,1678531,6368851,58255$1,850.11$1,746.06$1,761.4011,697 .12$1,782 .63$1,604.47$1,580.86$1,855.90$19,735.03PENALTY:Penalty Ra te :5250.250.250.250.250.250,250.250.250.250.25025Penalty Due:$310.005243305337.372135.293395.325376.315322.916372.18$394.393356141356.01$421.80$4,283.02Penalty PaidDIFFERENCE:$310.005243305337.37$335.293395.325376.313382.91$372185394.390358.14$356.01$421.80$4,283.02TOTAL TAX, INTEREST ANDPENALTY DUEJ(CREDR) :$3,050 ,4012,384 .3603,292.7353,258.98$3.826.7253,627.5933675.9653,558.0053,754 .5753,395.1753360.6983,964.88341,150.05 99'9W L9SZO ZetaZ2'409.9S0££.9S9 I'M 9S18'660'9SESIZSOD SZD'SS41, £1.9VSZZPMPSzl'Ogs'aszr iZ'n961'9V11:thaatio)onaCOW I83TELLN1 'XVI1V101Z1'004'LSSTUBSSI:LF-LSSVSOLSpawn6C14.9$SOVE9StleabZE437...45Ot ZZDSZtrtSSS93'1.94SLS'9914a0t431:84.4111Pled AlinedZI:COYLS6O£LBS9 VLSLSSSTOLS49'S99SSE lL9SSD1,69SWOKSZLEZSS0 l. ct..x.&MS391,54S/2'999$:Oa ApeuedSZOSZOSZT)SZOSZ-0Sr°Oil910SZ-OSZ*0SZIOSZ-0:eau ezeued:.U.WW9da'sWoeSLientrt$60"61.67St p's&eZsL6689tSSTOPLLLS6613S87SSteSSZ ZSSSW=1./.1 IraSO TZCZ-596. lSetS01 ZteD.ZS: ana pasam%OW%066WOOL%0'101%07.01.%DT%%DWI.960'SO t%0'901.%0101%DILA.ISO'SDI.:ECRU IS.01,11jti.S32131t0Z4009.6iSiSse'vents9981767.StirSIAVLS4E'S99'ZSVI'LeatS11'9LVZS£9'S61:ZS609117.31,1,990'MLOSS VZSsvmel.$%Taittxtobana xvi -tviat.150100e(5ZrOCeeitS9S'461753S899176YSLESIVZSte'Ess'esVVLS9Z$49LLTSSSW{ 'ZS62131.4ZS1.4990.ZSLOESVZS13S LAOISWW1' LSa0rr3teu41a000S0003OTOSOTOS000500 OS00 OSOTOSOTOS00'08CO -OSDUOS00'0SPled xelZY009'6LS9£'4663Swentsw mem4st99ZSpvzsVzsEsvei141390LS1.9SECZSESIOSIS64-9/94S9fOxe1E7.-042tE456C6SZ'9SS00'£41'64$91:069.94S90.69SW4S99S91'44$897.O4S591365.9S3Z9 PLVDES59'909'4£$St '1.95'5£$ZVEZVOSSZ21/ZZI.SSefIllanati elgexe11a1o1sumnpeacvontsys65'6sr9SS90'54 1.'64$81:069'914906904$Snertilit,89V94SatESS'OSSZWYLVSTSZ99094S591199'94ZVSZVOESzgraitswegs elect Jed EHlitereNunumMellaqt400e0JequienoN1eD01-10JeelweldeSzwsnvAlere+reeAeV9DAVUWE iryfueniqadkenuerssapaim alsopeaL*ZedCOO0000105swOuVilkiwOomaciamos 153li3ite V AZIVN3d '11/1Tractone Nf im lessMUTT:JanuaryFebruary March April TAX, PENALTY 21 INTEREST SCHEDULECOMPUTATIONS2010MayJune JulyAugust SeptemberOctobe r NovemberDecember Page 4 of 7TotalRevenue Per Data Sheet531,224.82$30,12312$35561.18534,80682$35,314.82$36.593.32$46,268.47$44,785.65$44,389.06$46,890.18$43143.00558,239 .29$493,340.23DeductionsTotal Taxab le Revenue :531,224.82530.123.12535,561.18534,806 .82$35,314 .82536,593.82$46,268.47$44,785.65644,389.06546,890.18549,14300$53,223 .29$493,340.23Tax Due51.873 .4951.807 .39$2,133.67$2,088.41$2118.83$2,195.63$2,776.11$2,687 .14$2,663 .3452,81341$2,948.58$3,494.36$29,600.42Tax Paid:$0.00$0.00$0.0030.00$0.00$0.00$0.00$0.00$0.00$0.00$0.0030.00$0.00DIFFERENCE:$1,873 .49$1,807 .39$2,133 .67$2,08341$2.116.8932195.63$2,776.11$2,687 .1452,663 .3452,813.4152,948.5853494.36329.600.42RousingTOTAL TAX IDUEI (CR)31.873 .49$1,807.39$2,133.87$2,088.4192.118.89$2.195.6352.776.1152587.1432,663.3452,8184153948.58$3,494,36529,600.42INTEREST:Interest Rate:109.0%108.0%107.0%106.0%105.0%104.0%103.0%1620%101.0%100.0%99.0%98.0%interes t Doe :$2,04210$1,551 .9682,283.03$2,213 .7152.224.83$2,293 .46$2.859 .3982,740.8802,68937$2,813.4152919.0993,424.47530,446.32PENALTY:Penalty Ra te :0.250.250.250.250.250.250.250250.250250250.25Penalty Due:6468.375451.85$533.42$522.10$529.72$548.9t5694.035671.79$665.84$703.35$737.155873.59$7,400.12Penalty PaktDIFFERENCE:$468.37$451.95$533.42$52210$529.72$548.91$694.03$671.76$665.845703.355737.15$873.5957,400.12TOTAL TAX, INTEREST ANDPENALTY DUEI(CREDIT5 54,383.9634,211 .22$4,950.1254,624.22$4573.44$5,028 .0086,329 .5356,09381$6,019.1556,330.17$6,604.8257.79242567,446.86 Tradone WirelessUTILITY:January February MarchApril TAX, PENALTY 8 INTEREST SCHEDULECOMPUTATIONS20/1MayJune'JulyAugust SeptemberOctober NovemberDecemberPage 5 of 7TotalRevenue Per Data Sheet$41,499.57338460.48941,92257$41836.43$45864.76541,764,57049774.43$47,503.24347,495 .10$43,284.33$45,459 .14$45,876 .959524,571.57Deduct ions:Total Taxab l e Revenue :541,499,57$38,460.48$41,92257$41,836 .43$45,864 .76541,76557$43,224.43547,50324547,495.10543,264.33$48459.14945,876.95$524,171.57Tax Due:$2439.97$2,307.6352515.3552,510.1932,751.8952.505.8752.593.47938501983,849.71$2,595.8652,727.5552,75262$31,450.30Tax Paid:50.00900030.0050.01$0.00$0.00$0.0050.00$0.00$0.003003$0.00$0.01DIFFERENCE:52,489.9752,307 .3332,515.35525101952751.8932,505.8792,593.47$2,850.1952.849.71$2,595.86$2,727.555375262531,450.30Rounding :TOTAL TAX MAWR )$2,489.5752,307 .6352,515.3552,510.1992751.8992,505.87$2,553.47$2,850 .19$2,849.7192595.8652,727 .55$2,75262631,493 .30 INTEREST :Interest Rate:97.0%96.0%95.0%94.0%93.0%920%91.0%90.0%99.0%88.0%87.0%880%Interest Due:52,4152792,215 .3252389.5852,359.58$2,559.26$2,305.40$2,360.0692,565 .1752536.24$2,284.3632372.9792,367.25528,730.46PENALTY:Penal ty Rate :0.250.250.250.250.250.250250.250.250.290.250.25Penalty Due:$622.49$576.915628.845627.555687.975628476648.37$712555712435848.979581.895588.165286260Penalty Paid 'DIFFERENCE:$822.49$576.915628.845627.559687.975626.47$648.37$71255$712.43$648.97$651.895688.16$7,862.60TOTAL TAY, INTEREST ANDPENALTY DUE4CREDITF.55,527.7350099.8535,533.7755,497.3235.999.1235,437.7455,601.9055,127.9150098.3895,529.1935,7824155,808.03368043.36Tradone WirelessUTILITY:January February MarchApril TAX, PENALTY 8 INTEREST SCHEDULECOMPUTATIONS20/1MayJune'JulyAugust SeptemberOctober NovemberDecemberPage 5 of 7TotalRevenue Per Data Sheet$41,499.57338460.48941,92257$41836.43$45864.76541,764,57049774.43$47,503.24347,495 .10$43,284.33$45,459 .14$45,876 .959524,571.57Deduct ions:Total Taxab l e Revenue :541,499,57$38,460.48$41,92257$41,836 .43$45,864 .76541,76557$43,224.43547,50324547,495.10543,264.33$48459.14945,876.95$524,171.57Tax Due:$2439.97$2,307.6352515.3552,510.1932,751.8952.505.8752.593.47938501983,849.71$2,595.8652,727.5552,75262$31,450.30Tax Paid:50.00900030.0050.01$0.00$0.00$0.0050.00$0.00$0.003003$0.00$0.01DIFFERENCE:52,489.9752,307 .3332,515.35525101952751.8932,505.8792,593.47$2,850.1952.849.71$2,595.86$2,727.555375262531,450.30Rounding :TOTAL TAX MAWR )$2,489.5752,307 .6352,515.3552,510.1992751.8992,505.87$2,553.47$2,850 .19$2,849.7192595.8652,727 .55$2,75262631,493 .30 INTEREST :Interest Rate:97.0%96.0%95.0%94.0%93.0%920%91.0%90.0%99.0%88.0%87.0%880%Interest Due:52,4152792,215 .3252389.5852,359.58$2,559.26$2,305.40$2,360.0692,565 .1752536.24$2,284.3632372.9792,367.25528,730.46PENALTY:Penal ty Rate :0.250.250.250.250.250.250250.250.250.290.250.25Penalty Due:$622.49$576.915628.845627.555687.975628476648.37$712555712435848.979581.895588.165286260Penalty Paid 'DIFFERENCE:$822.49$576.915628.845627.559687.975626.47$648.37$71255$712.43$648.97$651.895688.16$7,862.60TOTAL TAY, INTEREST ANDPENALTY DUE4CREDITF.55,527.7350099.8535,533.7755,497.3235.999.1235,437.7455,601.9055,127.9150098.3895,529.1935,7824155,808.03368043.36 4g 44 1g ® g 8 171 I g 8 Et 80 88 §§ § e §k A !p st 8 11,0 POi ?. P § 8 tr, 8 if re; 89 r ; 8 ;2 4 Fs' I E g I 000482 4g 44 1g ® g 8 171 I g 8 Et 80 88 §§ § e §k A !p st 8 11,0 POi ?. P § 8 tr, 8 if re; 89 r ; 8 ;2 4 Fs' I E g I 000482 vag .R3g gi P 5 t tl h g 1g NV 6 S ; 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 0 . 8 8 O 0 8 8 11, p3 IP g -&P 8 N ffi 8 81.8 -0 V 8 13 8 8 8 8 8 8 8 8 8 $ 8 8 0 0 8 8 8 8 8 g P P N G 8 8 8 8 8 8 8 0 8 0 B 8 43 B 8 88 8 o 8 o E 8 08 8 8 8 8 8 8 88 8 8 88? ..11" 8 s 8 8 8 8 8 o 8 -7 O I 8 3 B O 8 B 000483 vag .R3g gi P 5 t tl h g 1g NV 6 S ; 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 0 . 8 8 O 0 8 8 11, p3 IP g -&P 8 N ffi 8 81.8 -0 V 8 13 8 8 8 8 8 8 8 8 8 $ 8 8 0 0 8 8 8 8 8 g P P N G 8 8 8 8 8 8 8 0 8 0 B 8 43 B 8 88 8 o 8 o E 8 08 8 8 8 8 8 8 88 8 8 88? ..11" 8 s 8 8 8 8 8 o 8 -7 O I 8 3 B O 8 B 000483 Tractone Wireless, Inc Data Sheet 60106 CATEGORY Revenue Reported Nen-Direct Sales revgasiounutua allling Clatterer, sales ion.sutettymetese Page Plus Air irtreeeeYeeed pea Page Plus l'irdelYsWrheiDX4 APP Direct gales WraOlote Won onta Total Taxable Revenue ne ;,i1 .11,. Note $0.00 01,799.40 ar r.14IFIMIK911111111111MMINallimminumm ,M-971-1-mtvelkl. pr FUX16111Magaill Inkak=.. ,,-Ipmexa-cneTrimaim ., Caiaillii=51/231111101211111 "' 01,937.91 """-$13/115:98" 910,818.78 -TfInS7.1r.r.$u -y ex one . Aug 07 Utl tty Tex None 48,196.90 015.16 51,184.17 0,996.22 Sep -0/ Mer-rr Utility Tea None $10,324.21 655.02 52,211.27 512,590.50 lleility Tax 'one -5Y,052.9.8'., ov-y ax one ,433.75-E58717 ,.. Dec -07 Utility Tax None $11,847.41 $70.52 52,130.13 514,448.06 Jan -08 Utility Tax Noe $11,360.36 $03.51 52,233.31 013,681.18 o -'l Y ax ono Nat 08 Utility Tex None 915,335.08 9137.41 43,003.41 914,476.00 Apr 08 Utility Tea Nene $13,826.48 $117.23 $2,714.70 016,658.41 $17,930.53 -3T6TST.1 Nay-y Tax one $14,882.34---"'0l81.44 52,866.74 -727661717-Jun -08 Utility Tax None 513,710.28 0139.01 Jul -0B Utility Tax None $14,029,29 $240.91 92,024.56--WM. -3f7/811-.710--- 916,902.70 .9- op- t y 40 rirETTIR- ono -'11'689 ,. --$T17717759--- . .------$212:5I---- 110,4/1, - -V1:77161f.T0 Oat -08 Utility lax None 514,649.24 6216.22 92,024.19 517,490,0 Nov -08 Utility Tax None 615,132.07 6259.33 $2,840.01 $18,231.41 Doc -08 Utility Tax Nono 517,339.14 $325.14 $3,226.25 120,890,53 an -09 UtilityTax Mono $16,946.67 $429.61 53,290.39 $20,666.67'e -'Y ax One .. "33,559.88-aZ2;-lm17211 . a r-17611 -fry a "lone-8,142.85-.9 VT. S Apr -09 Utility Tax None $18,328.91 $597.38 May 09 Utility Tax None 521,510.96 $508.21 $4,239.63 525,354.83 Jun -09 Utility Tax Vona $20,571.34 5595.89 53,919.7/525,08/.00 701-09 Uti IL y Tax None 520,932.50 9741.70 53,843.24 924,527.44 Aug -09 Utilityan None 620,345.57 6680.95 03,825.15 428,411.6/ Sep-to y Tan cone ,..., -123,8..1'OZE 1 sty Tex None 759T577'33---1-6 ."M ;VA . K Nov 09 Mr- Utility Tex None 919,461.61 5810.29 53,461.7/ --9'17181.91 623,733.67 -T28:TI37/Silty Tex one -72371351r.77 5947.6 Jan -10 Utility Tax None 624,916.50 61,475701'93,842.71 531,224.02 Feb 10 Utility Tax None 925,002.19 51,380.04 63,/32.40 850,11.3.12 liar -10 Utility To Hone $29,515,78 $1,956.38 64,089.02 535,501.18 nr,-M-6713rApr -10 Utilitya None $28,889.66 $1,927.27 93,989.69 Roy-t eTrax f33,311.30 ..,. un-pumost one 6387172. ,7775769 u -4 y ax -11/7.17---T3 .,928770------,.,. 699-10 Utility Tax Nona 937,172.09 63,007.70 94,604.78 944,785.65 Sep -10 17E-0 Utility Tex None 836,042.92 93,374.16 94,171.99 944,399.06 Ili y To -Tao -08,919.85 -53,13.3 ,., av- 107:1T- lass y 69one 3'0,708760 31781157159",.,yy.raiz--$1,62. 8.00 91,212.06 558,239.29 Ion -11 Utlli y Tax None 632,784.56 94,048.26 54,606.05 941,499,5/ 141110112213MOMMINIIMIALIIILINIMINALILIIMIM LiMaLIENIELIMIIM10211111111=2112MMGrEatIllAUSZKEIMZEIMIIIEWIUMWEIMSILVINIIII ay 32.67:n Lty ax ifeiTtEr ex one,. ,. 1-1717.275 ,.,T'SM 018,. Hone 132,994.01-M,,,,lL.6C 63,090.92 081,704,57 604-11 Utility Tax Nono 634,147.30 84,592.36 $4,444./4 $44,224.83 Aug -11 Utility Tax None 937,527.56 $4,766.72 65,208.96 947,503.24 Sop 11 Utility Tax None 537,521.13 $4,446.60 $5,527.37 ,, L y ax one 615,459.14Utility Tax Nona 935,912,12 $5,99/.67 ----$6,129.26ec14121SE7i8ZI,. $45,8/5.95 Jan t y a nu ir yr_T,v. qui $T;Tr6761_,__-41-6,'. Feb -12 -otT a y Too--Musztkam -11-749r.... kmu illiMP1R1Ft 1414;36 .,./,. 14N 1etagse.932,700.39 03,193.58 943,132.08 "A11111031.11111MMIZZUMMILAIIMILIIIMI ., ELISWIMUSEE3=00111111ILLUNLIIIIIN MI Ft L 4 . ,,M723 ,706.4UM,. ILERUIVALUESIXIMELE= Likatillr"M121= LUSILICAME1011111=11=MIZMILMIIIIIIIIIILUMILLMIIq-jazintiumumgamigprimirrlgimmugiunAmm= 0 Of oneraiir-- , ,. 9667777:17 111111112tdarall..77,82372r,,.. i y a ma= 10.W221111111=111111111111 l one 11.11141=2141=rn INEOLUZUMMI i y ax one-s-rbn. One ELA11111a.1413.1111111111Mwassuumminiumam munitaum nutorq.movileige 1111.1=M111 000484 Tractone Wireless, Inc Data Sheet 60106 CATEGORY Revenue Reported Nen-Direct Sales revgasiounutua allling Clatterer, sales ion.sutettymetese Page Plus Air irtreeeeYeeed pea Page Plus l'irdelYsWrheiDX4 APP Direct gales WraOlote Won onta Total Taxable Revenue ne ;,i1 .11,. Note $0.00 01,799.40 ar r.14IFIMIK911111111111MMINallimminumm ,M-971-1-mtvelkl. pr FUX16111Magaill Inkak=.. ,,-Ipmexa-cneTrimaim ., Caiaillii=51/231111101211111 "' 01,937.91 """-$13/115:98" 910,818.78 -TfInS7.1r.r.$u -y ex one . Aug 07 Utl tty Tex None 48,196.90 015.16 51,184.17 0,996.22 Sep -0/ Mer-rr Utility Tea None $10,324.21 655.02 52,211.27 512,590.50 lleility Tax 'one -5Y,052.9.8'., ov-y ax one ,433.75-E58717 ,.. Dec -07 Utility Tax None $11,847.41 $70.52 52,130.13 514,448.06 Jan -08 Utility Tax Noe $11,360.36 $03.51 52,233.31 013,681.18 o -'l Y ax ono Nat 08 Utility Tex None 915,335.08 9137.41 43,003.41 914,476.00 Apr 08 Utility Tea Nene $13,826.48 $117.23 $2,714.70 016,658.41 $17,930.53 -3T6TST.1 Nay-y Tax one $14,882.34---"'0l81.44 52,866.74 -727661717-Jun -08 Utility Tax None 513,710.28 0139.01 Jul -0B Utility Tax None $14,029,29 $240.91 92,024.56--WM. -3f7/811-.710--- 916,902.70 .9- op- t y 40 rirETTIR- ono -'11'689 ,. --$T17717759--- . .------$212:5I---- 110,4/1, - -V1:77161f.T0 Oat -08 Utility lax None 514,649.24 6216.22 92,024.19 517,490,0 Nov -08 Utility Tax None 615,132.07 6259.33 $2,840.01 $18,231.41 Doc -08 Utility Tax Nono 517,339.14 $325.14 $3,226.25 120,890,53 an -09 UtilityTax Mono $16,946.67 $429.61 53,290.39 $20,666.67'e -'Y ax One .. "33,559.88-aZ2;-lm17211 . a r-17611 -fry a "lone-8,142.85-.9 VT. S Apr -09 Utility Tax None $18,328.91 $597.38 May 09 Utility Tax None 521,510.96 $508.21 $4,239.63 525,354.83 Jun -09 Utility Tax Vona $20,571.34 5595.89 53,919.7/525,08/.00 701-09 Uti IL y Tax None 520,932.50 9741.70 53,843.24 924,527.44 Aug -09 Utilityan None 620,345.57 6680.95 03,825.15 428,411.6/ Sep-to y Tan cone ,..., -123,8..1'OZE 1 sty Tex None 759T577'33---1-6 ."M ;VA . K Nov 09 Mr- Utility Tex None 919,461.61 5810.29 53,461.7/ --9'17181.91 623,733.67 -T28:TI37/Silty Tex one -72371351r.77 5947.6 Jan -10 Utility Tax None 624,916.50 61,475701'93,842.71 531,224.02 Feb 10 Utility Tax None 925,002.19 51,380.04 63,/32.40 850,11.3.12 liar -10 Utility To Hone $29,515,78 $1,956.38 64,089.02 535,501.18 nr,-M-6713rApr -10 Utilitya None $28,889.66 $1,927.27 93,989.69 Roy-t eTrax f33,311.30 ..,. un-pumost one 6387172. ,7775769 u -4 y ax -11/7.17---T3 .,928770------,.,. 699-10 Utility Tax Nona 937,172.09 63,007.70 94,604.78 944,785.65 Sep -10 17E-0 Utility Tex None 836,042.92 93,374.16 94,171.99 944,399.06 Ili y To -Tao -08,919.85 -53,13.3 ,., av- 107:1T- lass y 69one 3'0,708760 31781157159",.,yy.raiz--$1,62. 8.00 91,212.06 558,239.29 Ion -11 Utlli y Tax None 632,784.56 94,048.26 54,606.05 941,499,5/ 141110112213MOMMINIIMIALIIILINIMINALILIIMIM LiMaLIENIELIMIIM10211111111=2112MMGrEatIllAUSZKEIMZEIMIIIEWIUMWEIMSILVINIIII ay 32.67:n Lty ax ifeiTtEr ex one,. ,. 1-1717.275 ,.,T'SM 018,. Hone 132,994.01-M,,,,lL.6C 63,090.92 081,704,57 604-11 Utility Tax Nono 634,147.30 84,592.36 $4,444./4 $44,224.83 Aug -11 Utility Tax None 937,527.56 $4,766.72 65,208.96 947,503.24 Sop 11 Utility Tax None 537,521.13 $4,446.60 $5,527.37 ,, L y ax one 615,459.14Utility Tax Nona 935,912,12 $5,99/.67 ----$6,129.26ec14121SE7i8ZI,. $45,8/5.95 Jan t y a nu ir yr_T,v. qui $T;Tr6761_,__-41-6,'. Feb -12 -otT a y Too--Musztkam -11-749r.... kmu illiMP1R1Ft 1414;36 .,./,. 14N 1etagse.932,700.39 03,193.58 943,132.08 "A11111031.11111MMIZZUMMILAIIMILIIIMI ., ELISWIMUSEE3=00111111ILLUNLIIIIIN MI Ft L 4 . ,,M723 ,706.4UM,. ILERUIVALUESIXIMELE= Likatillr"M121= LUSILICAME1011111=11=MIZMILMIIIIIIIIIILUMILLMIIq-jazintiumumgamigprimirrlgimmugiunAmm= 0 Of oneraiir-- , ,. 9667777:17 111111112tdarall..77,82372r,,.. i y a ma= 10.W221111111=111111111111 l one 11.11141=2141=rn INEOLUZUMMI i y ax one-s-rbn. One ELA11111a.1413.1111111111Mwassuumminiumam munitaum nutorq.movileige 1111.1=M111 000484 1..(1111!"1-wil.111111,1111111.11111..PthilillIfil TaRaiffaffing PO Box 608 Spnnaway, WA 98387 Nicholas Ford TracFoite (Tax Department) 97001,1W 112th Avenue Miami, FL 33178 !vow° $8.20 023 411108181 Od 000485 1..(1111!"1-wil.111111,1111111.11111..PthilillIfil TaRaiffaffing PO Box 608 Spnnaway, WA 98387 Nicholas Ford TracFoite (Tax Department) 97001,1W 112th Avenue Miami, FL 33178 WaVYK" - !vow° $8.20 020 411108181 Od 000485 "Providing cities with experienced research and auditing services" June 5, 2019 Audit/Tax Investigation Update Renton L L C TracFone Wireless, Inc.Audit 1 and Audit 2: On June 4, 2019, TRS received the following email from the City of Renton: Do you have copies of any contracts from the Tracfone audit? On June 4, 2019, TRS sent the following email to the City of Renton: We do not have any contracts between TRS and TracFone. We only have a signed Non -Disclosure Agreement. Let me know if you have any other questions. On June 4, 2019, TRS received the following email from the City of Renton: I meant Tracfone and other companies like Wal-Mart, Sprint, ect. On June 4, 2019, IRS sent the following email to the City of Renton: We did not obtain any copies of contracts between TracFone and the companies like Wal-Mart. They would be interesting to see. However, there is plenty of information of the legal sort to be obtained on the back of the cards sold and on the internet at the TracFone site. The cards sold at the retailers plainly say on them that the buyer is to contact TracFone at www.TracFone.com for their Terms and Conditions. These terms and conditions delineate further the ongoing activity and control which TracFone exerts on the subscriber/customer: "We may, at any time and without prior notice to you, modify, cancel, and/or deactivate your Service and/or take other corrective action, for any reason in our sole discretion" and "Further, we may remotely (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000152 "Providing cities with experienced research and auditing services" June 5, 2019 Audit/Tax Investigation Update Renton L L C TracFone Wireless, Inc.Audit 1 and Audit 2: On June 4, 2019, TRS received the following email from the City of Renton: Do you have copies of any contracts from the Tracfone audit? On June 4, 2019, TRS sent the following email to the City of Renton: We do not have any contracts between TRS and TracFone. We only have a signed Non -Disclosure Agreement. Let me know if you have any other questions. On June 4, 2019, TRS received the following email from the City of Renton: I meant Tracfone and other companies like Wal-Mart, Sprint, ect. On June 4, 2019, IRS sent the following email to the City of Renton: We did not obtain any copies of contracts between TracFone and the companies like Wal-Mart. They would be interesting to see. However, there is plenty of information of the legal sort to be obtained on the back of the cards sold and on the internet at the TracFone site. The cards sold at the retailers plainly say on them that the buyer is to contact TracFone at www.TracFone.com for their Terms and Conditions. These terms and conditions delineate further the ongoing activity and control which TracFone exerts on the subscriber/customer: "We may, at any time and without prior notice to you, modify, cancel, and/or deactivate your Service and/or take other corrective action, for any reason in our sole discretion" and "Further, we may remotely (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000152 change your phone's software, applications, or programming without notice." and "All aspects of the Service, including, Plan rates, offerings, features, functionality and other product specifications are subject to change without notice or obligation". As you can see, it is not the retailer who is providing the telephone services; they are only the intermediary that is connecting (or providing the means of connecting) TracFone to their customer.It is actually TracFone who is providing telephone services to their customers. Also, we thought we would also send this information to you below In TracFone vs Washington DOR, Section 2, it states TracFone "contracts with other radio communication service companies to provide wireless telephone service and radio access lines and then resells the service". It also states in the same section: "TracFone provided wireless service ". And so the court does consider TracFone as a telephone service provider. Also, the following definitions show that TracFone is a telephone business, and a provider of network telephone service: RCW 82.16.010 (ii) "Network telephone service" means the providing by any person of access to a telephone network, telephone network switching service, toll service, or coin telephone services, or the providing of telephonic, video, data, or similar communication or transmission for hire, via a telephone network, toll line or channel, cable, microwave, or similar communication or transmission system. "Network telephone service" includes the provision of transmission to and from the site of an internet provider via a telephone network, toll line or channel, cable, microwave, or similar communication or transmission system. "Network telephone service" does not include the providing of competitive telephone service, the providing of cable television service, the providing of broadcast services by radio or television stations, nor the provision of internet access as defined in RCW 82.04.297, including the reception of dial -in connection, provided at the site of the internet service provider. (iii) "Telephone business" means the business of providing network telephone service. It includes cooperative or farmer line telephone companies or associations operating an exchange. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000153 change your phone's software, applications, or programming without notice." and "All aspects of the Service, including, Plan rates, offerings, features, functionality and other product specifications are subject to change without notice or obligation". As you can see, it is not the retailer who is providing the telephone services; they are only the intermediary that is connecting (or providing the means of connecting) TracFone to their customer.It is actually TracFone who is providing telephone services to their customers. Also, we thought we would also send this information to you below In TracFone vs Washington DOR, Section 2, it states TracFone "contracts with other radio communication service companies to provide wireless telephone service and radio access lines and then resells the service". It also states in the same section: "TracFone provided wireless service ". And so the court does consider TracFone as a telephone service provider. Also, the following definitions show that TracFone is a telephone business, and a provider of network telephone service: RCW 82.16.010 (ii) "Network telephone service" means the providing by any person of access to a telephone network, telephone network switching service, toll service, or coin telephone services, or the providing of telephonic, video, data, or similar communication or transmission for hire, via a telephone network, toll line or channel, cable, microwave, or similar communication or transmission system. "Network telephone service" includes the provision of transmission to and from the site of an internet provider via a telephone network, toll line or channel, cable, microwave, or similar communication or transmission system. "Network telephone service" does not include the providing of competitive telephone service, the providing of cable television service, the providing of broadcast services by radio or television stations, nor the provision of internet access as defined in RCW 82.04.297, including the reception of dial -in connection, provided at the site of the internet service provider. (iii) "Telephone business" means the business of providing network telephone service. It includes cooperative or farmer line telephone companies or associations operating an exchange. (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000153 Hope this helps, Let us know if you need anything else. 111=11111111 11111111111 (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000154 Hope this helps, Let us know if you need anything else. 111=11111111 11111111111 (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp@TRS-Integrity.com 000154 (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp(i-pTRS-Integrity.com 000155 (253) 223-4986 PO Box 608 Spanaway, WA 98387-0608 Crisp(i-pTRS-Integrity.com 000155 TRS 12-10-2020-001 TracFone – TRS Emails Renton TracFone Audit John Cavalieri <jcavalieri@tracfone.com> To:crisp@trs-integrity.com Thu, Jun 20, 2013 at 3:02 PMMichael, I received your message. Below is my email address. Per your message you will provide a letter from the [city] engaging you and your company as well as the contract you have with then to perform an audit. We will follow up with our own NDA for you to sign soon. Thank you, John F. Cavalieri Sr. Manager, Tax TracFone Wireless, Inc. 9700 NW 112th Ave | Miami, FL 33178 O: 305.715.6578 | F: 305.418.2612 jcavalieri@TracFone.com TracFone.com | NET10.com | StraightTalk.com | SafeLink.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Thu, Jun 20, 2013 at 5:00 PM Thanks John. I appreciate it. I will forward the information to the [city]. Mike TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Fri, Jun 21, 2013 at 2:12 PM 12.18.20 Crisp Vol II 63 Buell Realtime Reporting TRS 12-10-2020-002 Hi John, I have contacted [the city] and have asked them to send you a letter stating that our company has been contracted by them to conduct [the audit]. I have also enclosed a copy of the contract [ ]. Let me know if you have any questions. Thanks John. Mike TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Fri, Jun 28, 2013 at 4:48 PM Hi John, Hope things have been going well with you. While we are waiting for your NDA, we have compiled a list (below) of the initial items we will need for the audit: [ ] For the City of Renton: For the City of Renton audit we will initially need the following items:  Information as to whether TracFone is providing services in the City of Renton to any of the newly annexed locations which are listed in the attachment to this email. And if so, whether TracFone paid any taxes to the City of Renton for the services provided to these customers.  A chart of account for all revenues including inside the City of Renton with a breakout of what is intrastate and what is interstate.  A breakout (including all back-up information) of how TracFone pays taxes to the City of Renton (using March 2008, June 2010 and September of 2012 tax return as a sampling). This would include a list of all revenues totaling the gross amount made in the City of Renton and any deductions.  Invoices for March of 2008, June of 2010 and September of 2012. Go ahead and edit out any personal customer information.  Copies of tax returns for January 1, 2007 through March 31, 2013.  Sales revenues for prepaid cards  Revenues for recharge of prepaid cards TRS 12-10-2020-003 An area was annexed on March 1st of 2008. We have enclosed a copy of the addresses in the new annexed area. [ ] If your company has not paid any taxes to the [city] mentioned above, then please provide us with a breakout of gross income for each city (and new annexed area if it applies) by line item and your expenses instead of the tax returns along with the other information requested. Let me know if you have any questions. Thanks John. Mike John Cavalieri <jcavalieri@tracfone.com> To:crisp@trs-integrity.com Cc:CDillon@tracfone.com Wed, Jul 3, 2013 at 8:40 AM Mike, Attached is a TracFone Non-Disclosure Agreement (NDA) for your signature. Please print, fill out, sign and return to me along with a certificate of good standing for TRS (a recent one). If you need to propose changes, please request a Word version of the NDA to mark up using track changes. We will then review if necessary. Thank you, John TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Wed, Jul 3, 2013 at 12:59 PM Thanks John. We will take a look at it and will let you know if we have any changes. Have a great 4th. Mike John F. Cavalieri | Sr. Manager, Tax | TracFone Wireless, Inc. | O: 305.715.6578 | F: 305.418.2696 | jcavalieri@TracFone.com TRS <crisp@trs-integrity.com> TRS 12-10-2020-004 To:JCAVALIERI@tracfone.com Mon, Jul 15, 2013 at 11:42 AM Hi John, We need three changes on the NDA.  When TRS signs non-disclosure agreements, we do so as agents of the city (or cities) we represent, and so the NDA also must include the city as a party to the agreement. [ ]  I am pretty sure the [city] would require the Law Venue (item 17) to be in their own county, and in accordance with the laws of the State of Washington. Renton[is] in King County [ ].  Of course, the City [ ] would need signature lines. Thanks John. Tamara Crisp Vice President, Administration and Technical [Analysis] Tax Recovery Services, LLC John Cavalieri <jcavalieri@tracfone.com> To:crisp@trs-integrity.com Mon, Jul 15, 2013 at 11:42 AM I am out of the country with very limited access, if any, to email and phone messages. I am returning Monday 07/22. If this is an urgent matter, please contact Scott Myott smyott@tracfone.com or 315-715-6578. TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Fri, Jul 26, 2013 at 12:21 PM Hi John, Just checking to see how things are coming along with the NDA and to see if you have any questions. Thanks and have a good weekend. Tamara TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Fri, Aug 2, 2013 at 3:28 PM Hi John, Just checking to see how things are coming along with the NDAand to see if you have any questions. Thanks and have a good weekend. Mike TRS 12-10-2020-005 John Cavalieri <jcavalieri@tracfone.com> To:crisp@trs-integrity.com Fri, Aug 2, 2013 at 4:10 PM I will follow-up with you Monday or Tuesday Next week. Thank you, John John F. Cavalieri | Sr. Manager, Tax | TracFone Wireless, Inc. | O: 305.715.6578 | F: 305.418.2696 | jcavalieri@TracFone.com John Cavalieri <jcavalieri@tracfone.com> To:crisp@trs-integrity.com Mon, Aug 5, 2013 at 8:30 AM I will probably be forwarding you a word version of the NDA for you to do track-changes on. [ ] I will follow up shortly. Thank you, John John F. Cavalieri | Sr. Manager, Tax | TracFone Wireless, Inc. | O: 305.715.6578 | F: 305.418.2696 | jcavalieri@TracFone.com TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Mon, Aug 5, 2013 at 11:44 AM Thanks John. I appreciate it. Mike John Cavalieri <jcavalieri@tracfone.com> To:crisp@trs-integrity.com Mon, Aug 5, 2013 at 12:27 PM Here is the word document of the NDA. Please make any changes via “track changes” so our legal team can readily see your changes and return it to me. FYI, we will also need a recent certificate of good standing for TRS. Thank you, John John F. Cavalieri | Sr. Manager, Tax | TracFone Wireless, Inc. | O: 305.715.6578 | F: 305.418.2696 | jcavalieri@TracFone.com TRS 12-10-2020-006 Thanks John. We will take a look at it and we let you know if we have any changes or questions. Mike TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Thu, Aug 8, 2013 at 8:15 PM Hi John, Here are our adjustments on the NDA; let us know what your legal team thinks. We need to have the [city] on the document, as we are their agents, and must share the information with them, and we share responsibility for the information with them. [The] city will need its own document, but if TracFone and TRS can come to an agreement on an NDA, we can begin with that one for [the] city, and let [the] city make any adjustments they require. As far as a certificate of good standing, we are not sure what kind you are in need of, or from whom. Let us know, and we will see about obtaining one for you. Thanks, Tamara Crisp V.P. Administration and Technical Analysis Tax Recovery Services, LLC Cavalieri <jcavalieri@tracfone.com> To:crisp@trs-integrity.com Fri, Aug 9, 2013 at 7:54 AM We will take a look at the NDA. The Cert of Good Standing needs to come from TRS’s state of incorporation secretary of state. FYI, I will be on vacation next week. Thank you, John John F. Cavalieri | Sr. Manager, Tax | TracFone Wireless, Inc. | O: 305.715.6578 | F: 305.418.2696 | jcavalieri@TracFone.com TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Fri, Aug 9, 2013 at 12:19 PM Hi John, TRS 12-10-2020-007 We have ordered the Certificate of Good Standing, and it should arrive at your office in two weeks or less. If you need confirmation sooner, you can go to https://www.sos.wa.gov/corps/OrderDocs.aspx and put in our UBI (602 403 814) without any spaces and our company name will pop up. We also have our contracts and agent letters from the [city], which should confirm us as a registered company. Have a great vacation next week. Tamara John Cavalieri <jcavalieri@tracfone.com> To:crisp@trs-integrity.com Fri, Aug 9, 2013 at 12:20 PM I am out of the office, returning on Monday 8/18. I will have intermittent access to email and will respond as soon as possible. If this is an urgent matter, please contact Scott Myott (smyott@tracfone.com) or 315-715-6778 and he will direct you to proper assistance. TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Tue, Aug 20, 2013 at 12:21 PM Hi John, Hope things have been going great with you. We also wanted to check and see if you have had a chance to look at the NDA. Let us know if you have any questions. Thanks, Mike John Cavalieri <jcavalieri@tracfone.com> To:crisp@trs-integrity.com Thu, Aug 22, 2013 at 1:46 PM Mike, I am sorry but my vacation has be all backed up; pllus several fires to put out. I will review by tomorrow night and provide to legal by COB tomorrow. Again, my apologies. TRS 12-10-2020-008 Thank you, John John F. Cavalieri | Sr. Manager, Tax | TracFone Wireless, Inc. | O: 305.715.6578 | F: 305.418.2696 | jcavalieri@TracFone.com TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Thu, Aug 22, 2013 at 2:21 PMThanks John. I appreciate it. Mike John Cavalieri <jcavalieri@tracfone.com> To:crisp@trs-integrity.com Thu, Aug 29, 2013 at 1:23 PM Mike, Our legal dept. has informed me that they will prepare [an] NDA and incorporate your suggested changes. Thank you, John John F. Cavalieri | Sr. Manager, Tax | TracFone Wireless, Inc. | O: 305.715.6578 | F: 305.418.2696 | jcavalieri@TracFone.com TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Thu, Aug 29, 2013 at 1:26 PMThanks John. We look forward to taking a look at it. Have a good day. Mike TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Tue, Sep 10, 2013 at 12:07 PM Hi John, Hope things have been going great with you. Just wanted to check and see how things are coming along with the Non-Disclosure Agreement. Let me know if you have any questions. Thanks John. TRS 12-10-2020-009 Mike John Cavalieri <jcavalieri@tracfone.com> To:crisp@trs-integrity.com Cc:CDillon@tracfone.com Fri, Sep 13, 2013 at 9:16 AM Mike, Attached [is the NDA]. If there are no changes, please have the [document] signed and then return .pdf copies to me. We will do the same after receipt and return .pdfs to you. If any party wishes to make further changes, I will send a Word document so they can enter changes as they deem necessary. If you have any questions, please let us know. Thank you, John John F. Cavalieri | Sr. Manager, Tax | TracFone Wireless, Inc. | O: 305.715.6578 | F: 305.418.2696 | jcavalieri@TracFone.com TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Fri, Sep 13, 2013 at 11:00 AM Thanks John. We will take a look at it and let you know if we have any questions. Have a good weekend. Mike TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Mon, Sep 16, 2013 at 1:19 PM Hi John, After looking at the NDA, we had a couple of things come up. On item #11, Warranties: We are not sure, but it looks like TracFone is trying to cover itself as to inadvertent incompleteness or inaccuracies. But the verbiage ends up sounding as if the company is covering itself in providing inaccurate and incomplete information at will. We would like to see verbiage stating that TracFone will make every effort to supply accurate and complete information, as required by laws and codes, but that the NDA does not in itself require this. It also appears to say that TracFone will have no liability resulting from the audit information, yet the purpose of the audit is to establish tax liability to the [city]. Because of these two issues, we would like to propose the following changes: As is: TRS 12-10-2020-010 11. Warranties. Each Party acknowledges that neither Party is making express or implied representations or warranties as to the accuracy or completeness of the Confidential Information. The Parties further acknowledge that Provider shall have no liability to Recipient resulting from Recipient’s use of the Confidential Information, other than that legally required as specified in Section 12. As proposed: #11. Warranties. Each party acknowledges that accuracy and completeness of information is required by law; however, beyond this requirement, this agreement is not making express or implied representations or warranties as to the accuracy or completeness of the Confidential Information. The Parties further acknowledge that Provider shall have no liability to Recipient resulting from Recipient’s use of the Confidential Information other than the possible legally mandated tax, interest and fees owing due to the audit. Also, in #17, the City of [ ] Renton [is] in King County [.] We had only put down King [County] in our last NDA document that we sent to you. Let me know if you have any questions. Once we have these items cleared up, we will [send] to the city for their review. Thanks John. Mike John Cavalieri <jcavalieri@tracfone.com> To:crisp@trs-integrity.com Mon, Sep 16, 2013 at 2:04 PM Mike, Please use track changes in [[ ] the attached [ ] to make your suggested adjustments. Once complete, please return them to me and I will have our Legal Dept. review. Thank you, John John F. Cavalieri | Sr. Manager, Tax | TracFone Wireless, Inc. | O: 305.715.6578 | F: 305.418.2696 | jcavalieri@TracFone.com TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Mon, Sep 16, 2013 at 2:55 PM Thanks John. We will go ahead and make the changes and send them back to you. Mike TRS <crisp@trs-integrity.com> To:JCAVALIERI@trac fone.com Thu, Sep 19, 2013 at 2:14 PM Hi John, Here are the updated NDA[ ] for your review. Let us know if you have any questions. TRS 12-10-2020-011 Have a good day. Thanks, Mike John Cavalieri <jcavalieri@tracfone.com> To:crisp@trs-integrity.com Thu, Sep 19, 2013 at 4:34 PM Thank you. I sent [ ] in for review. TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Fri, Sep 20, 2013 at 1:17 PMThanks John. Have a good weekend. Mike John Cavalieri <jcavalieri@tracfone.com> To:crisp@trs-integrity.com Thu, Sep 26, 2013 at 12:17 PM Mike, Here are executable [NDA] with the changes inserted. Please send us executed [pdf]and we will return fully- executed [pdf] from our end. Thank you, John John F. Cavalieri | Sr. Manager, Tax | TracFone Wireless, Inc. | O: 305.715.6578 | F: 305.418.2696 | jcavalieri@TracFone.com TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Fri, Oct 18, 2013 at 5:00 PMHi John, Here is a signed copy of the Non-Disclosure Agreement for the City of Renton. [ ] Let me know if you have any questions. Have a good weekend. Thanks, Mike TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Tue, Nov 5, 2013 at 11:59 AM TRS 12-10-2020-012 Hi John, Hope things have been going well with you. [ ] Also, have you had a chance to look at the information we need for the Renton audit. [ ] Let me know if you have any questions. Thanks John. Mike John Cavalieri <jcavalieri@tracfone.com> To:crisp@trs-integrity.com Thu, Nov 7, 2013 at 1:57 PM Mike, Would you kindly tell me the date of the email you requested the info for the Renton audit. I have not started the gathering of any info. [ ] Thank you, John John F. Cavalieri | Sr. Manager, Tax | TracFone Wireless, Inc. | O: 305.715.6578 | F: 305.418.2696 | jcavalieri@TracFone.com TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Fri, Nov 29, 2013 at 12:34 PM Hi Anthony, Because we will not be able to complete the audit this year, a Statute of Limitations Waiver Form (attached) needs to be signed so that we can continue the audit according to the City of Renton's Municipal Code. We will need the form returned to us (electronically) before December 17, and we will send it on to the City. Without the signed waiver form, we will have to do an estimate for the year 2007. Let us know if you have any questions concerning the waiver. Thanks Anthony, hope you had a great weekend. Mike TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Thu, Dec 5, 2013 at 2:26 PM Sorry John, I accidentally put Anthony instead of your name. Let me know if you have any questions. Thanks John. TRS 12-10-2020-013 Mike Cavalieri <jcavalieri@tracfone.com> To:crisp@trs-integrity.com Fri, Dec 13, 2013 at 2:09 PM Mike, Would you kindly create a spreadsheet of [the municipality] (muni) that you have been hired to do an audit for. Please include the muni name, signed contracts received and sent to TracFone, period being audited, NDA in progress, NDA signed by muni, NDA signed by TracFone. [ ] What is the statute of limitations [ ]? Would you please include this in the spreadsheet as well? Would you send statute support please? I have received [waiver request for the following: [ ] Renton [ ] Finally, what is the last day I can get [it] to you [ ]? Thank you, John John F. Cavalieri | Sr. Manager, Tax | TracFone Wireless, Inc. | O: 305.715.6578 | F: 305.418.2696 | jcavalieri@TracFone.com TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Fri, Dec 13, 2013 at 2:59 PM Hi John, [ ] Also, we will work on the spreadsheet information that you requested [ ]. For the waiver form, [it] to us by the 20th, that will be okay. Let me know if you have any questions. Thanks John. Mike TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com TRS 12-10-2020-014 Thu, Dec 19, 2013 at 2:32 PM Hi John, Hope things have been gong well with you. I also wanted to check and see how the Statute of Limitations [form is] coming along and if you have any questions. We are also working on the spreadsheet that you requested and hope to have it to you soon. Let me know if you have any questions. Thanks John. Mike TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Mon, Dec 23, 2013 at 11:15 AM Hi John, Wanted to check and see if you are sending the waiver [form] today. Let me know if you have any questions. Thanks John. I appreciate it. Mike John Cavalieri <jcavalieri@tracfone.com> To:crisp@trs-integrity.com Mon, Dec 23, 2013 at 1:09 PM Mike, We are not comfortable with the language in [the waiver]. [It is] quite unlike any we have ever seen before. However, we do question why the [city is] asking for waivers at this time. Why [does the city] feel there is a need? We did agree to get [the NDA]signed first before beginning the gathering of any info. Thank you, John John F. Cavalieri | Sr. Manager, Tax | TracFone Wireless, Inc. | O: 305.715.6578 | F: 305.418.2696 | jcavalieri@TracFone.com TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Mon, Dec 23, 2013 at 2:03 PM Hi John, TRS 12-10-2020-015 The waiver form you received is the standard form used for audits. We have used this form for companies needing waivers for the last ten years, and the form is similar to one used by the City of Tacoma for decades. The reason why we need the waiver [form] is because the audit wasn't completed in the year filed, and, by the Statutes of Limitations for [the city], we need a waiver to complete the audit in the following year. If the [city does] not receive the waiver [form], they will have to submit an estimate for the audit so that they do not lose the first year of the audit. Generally, when a city sends out an estimate, your company will have certain legal obligations which will require your legal department to file certain forms under certain deadlines, without which you will lose the right to contest the estimate, and it will become due as submitted to you. I hope this helps, John. The [city] just [wants] to continue the current audit under the current audit period. Let me know what other concerns you have for the [waiver]. Thanks John. I appreciate it. Mike TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Cc:IWang@Rentonwa.gov Tue, Dec 31, 2013 at 3:07 PM Hi John, Here is the attached estimated tax for the City of Renton. Because you chose not to sign a waiver form, the City wanted us to send out the estimated tax due. Once we have the correct information, we can then send out the corrected tax due. A hard copy has been sent to you via regular mail. Let me know if you have any questions. Thanks John. Mike TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Mon, Feb 24, 2014 at 11:07 AM Hi John, TRS 12-10-2020-016 Here is a copy of the agent letter from the City of Renton. They are also mailing you a copy through the mail. [ ] Let me know if you have any questions. Thanks John. Have a good afternoon. Mike ----- Forwarded Message ----- From: Christine Seese <CSeese@Rentonwa.gov> To: "'crisp@trs-integrity.com'" <crisp@trs-integrity.com> Cc: Iwen Wang <IWang@Rentonwa.gov> Sent: Friday, February 21, 2014 4:54 PM Subject: TracFone Audit Letter 2/21/2014 Mike, Please see the attached TracFone Audit letter. This will be mailed out on Monday to TracFone. Let me know if you have further questions. Christine Seese ASD Administrative Assistant City of Renton 1055 South Grady Way, Floor 5 Renton WA 98057 PH (425) 430-6887 This E-mail was sent from "RNP11AAAD" (Aficio MP C5000). Scan Date: 02.21.2014 16:48:27 (-0800) Queries to: pdecopy@rentonwa.gov This E-mail was sent from "RNP11AAAD" (Aficio MP C5000). Scan Date: 02.21.2014 16:48:27 (-0800) Queries to: pdecopy@rentonwa.gov TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Tue, Mar 4, 2014 at 4:51 PM Hi John, Hope things have been going well for you. TRS 12-10-2020-017 I also wanted to check and see how things are coming along with the information that we requested for the [audit] and if there is anything else that you need from us concerning the [audit]. Thanks John. Have a great day. Mike John Cavalieri <jcavalieri@tracfone.com> To :crisp@trs-integrity.com Tue, Mar 11, 2014 at 1:47 PM Mike, Please see attached fully executed NDA[ ] between TracFone Wireless, Inc., Tax Recovery Services LLC, and the following [ ]: [ ] Renton [ ] Thank you, John F. Cavalieri Sr. Manager, Tax Tr acFone Wireless, Inc. 9700 NW 112th Ave | Miami, FL 33178 O: 305.715.6578 | F: 305.418.2612 jcavalieri@TracFone.com TracFone.com | NET10.com | StraightTalk.com | SafeLink.com TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Wed, Mar 12, 2014 at 3:23 PM Thanks John for the NDA[]. I appreciate it. Let me know if you have any questions on the information we will need for the audit[]. Mike TRS 12-10-2020-018 TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Fri, Mar 21, 2014 at 1:36 PM Hi John, Hope things have been going well for you. I also wanted to check and see how things are coming along with the information that we requested for the audit[] and if you have any questions. Thanks John. Have a great weekend. Mike TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Thu, Apr 3, 2014 at 11:18 AM Hi John, Hope things have been going well for you. I also wanted to check and see how things are coming along with the information that we requested for the audit[] and if you have any questions. Thanks John. Mike TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Thu, Apr 10, 2014 at 1:37 PM Hi John, Hope things are going well for you. I have been working with the [city], and they need an update on the audit information that was requested. Let me know if you have any questions. Thanks John. Mike TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Mon, Apr 21, 2014 at 3:55 PM TRS 12-10-2020-019 Hi John, I hope things are well with you. I have sent emails and left a telephone message for you to contact me, but I have not heard back from you. The [city needs] to have an update on how things are coming along with the information that we need for the audit. Let me know if you have any questions or if there is anything else that you need us to do for you. Thanks John. Mike TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Fri, Apr 25, 2014 at 12:54 PM Hi John, I got your voice mail today, and I would like to give you a call on Monday afternoon if that works for you. Would 4:00 your time (1:00 my time) work for you? If not, let me know what would be a good time. Thanks John. I look forward to reviewing the audit with you. Mike TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Fri, May 23, 2014 at 1:52 PM Hi John, Hope things have been going great for you. Also, wanted to check and see how things are coming along with the reply from your legal department and if you have any questions concerning the information that was requested for the audit. Have a great Memorial Day Weekend. Thanks John. Mike ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: John Cavalieri <JCAVALIERI@tracfone.com> Sent: Friday, May 9, 2014 2:30 PM Subject: TracFone TRS 12-10-2020-020 Hi John, Just checking to see how things are coming along with the reply from your legal department is coming along. Also, on the information we requested for the audit, do you have any idea how long it will take to gather this information. The [city] will still want to audit TracFone to verify what activity is being done in their city and if it is taxable. Let me know if you have any questions. Thanks John. Mike TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Fri, May 30, 2014 at 2:25 PM Hi John, Just checking to see how things are coming along with the reply from your legal department. Also, on the information we requested for the audit, do you have any idea how long it will take to gather this information? The [city] will still want to audit TracFone to verify what activity is being done in their city and if it is taxable. Let me know if you have any questions. Have a great weekend. Thanks John. Mike TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Tue, Jun 10, 2014 at 10:14 PM Hi John, We have been waiting for a reply from your company concerning the legal reply as far as the taxability of your business activity, but the [city] will still want to conduct an audit. We have done a lot of research on TracFone and the [city does] want to obtain the information that we requested for the audit. Of course, the [city is] more then willing to review your legal response, but they still want to conduct an audit. [The city is] anxious to move forward with this audit since it has been open for quite some time. Let me know if you have any questions. Thanks John. We appreciate it. TRS 12-10-2020-021 Mike Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Thu, Jun 12, 2014 at 7:26 AM Hi Mike -- by way of introduction, I work alongside John Cavalieri at TracFone. I will be taking over this Washington State [city’s] audit. As such, please let me know when you would be available to discuss your information requests. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. -----Original Message----- From: John Cavalieri Sent: Wednesday, June 11, 2014 7:56 AM To: Chesley Dillon; Nicholas Ford Subject: FW: TracFone informaion for the [audit] Fyi Thanks John Cavalieri TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Jun 12, 2014 at 12:40 PM Hi Nicholas, What about tomorrow (Friday) at 12:30 my time (3:30) your time? Thanks Nicholas. Mike Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Thu, Jun 12, 2014 at 12:59 PM Hi Mike – I’ve put you down for 3:30p tomorrow. You can phone me per my details below. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS 12-10-2020-022 TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Jun 12, 2014 at 1:02 PM Sounds great. Look forward to talking to you tomorrow. Thanks, Mike TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Jun 20, 2014 at 2:58 PM Hi Nicholas, It was good talking with you. We also wanted to ask you a few questions concerning the telephone prepaid cards: How does TracFone keep track of sales and revenue? Does TracFone source calls at all? How does TracFone keep record of calls and minutes used? Does TracFone break calls and revenues down geographically, i.e. jurisdictionally? Does TracFone keep track of the primary residence of the customers (primary place of use)? This would include both pre-paid calling cards and recharges. Also, it is our understanding that TracFone has several brands (telephone cards) that they sell. These include: TracFone, Net10, StraightTalk, Simple Mobile, Telcel America. If there are any other brands, please include those also with the information that we have requested for the audit. Lastly, we have checked with [Renton] and they would like to go ahead and extend the audit out to May 31, 2014. [ ] By doing it this way, your company will not have to go back and prepare all of these month's tax returns yourself to catch up, and we can bring everything current as much as possible. At this point, we will not need any additional information due to the extensions. Let me know if you have any questions concerning the items above or any questions on the information that was requested for the audit. Thanks Nicholas. We look forward to working with you on [this audit]. TRS 12-10-2020-023 Have a great weekend. Mike TRS <crisp@trs-integrity.com> To:nford@tracfone.com Mon, Jun 30, 2014 at 2:54 PM Hi Nicholas, Hope things have been going great for you. I also wanted to check and see how things are coming along with the information that we requested for the [audit] and if you have any questions. Thanks Nicholas. Mike Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Tue, Jul 1, 2014 at 10:23 AM Hi Mike – in reference to the WA [city]' Utility Tax Audit[ ] regarding TracFone, please find attached the company’s Chart of Accounts as you requested in your previous e-mail to John Cavalieri. Please note that the attached would apply [ ], as TracFone has a single standardized Chart of Accounts. Please note that we are continuing to work on your other information requests, as well as the questions you posed at the bottom of this e-mail chain. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Tue, Jul 1, 2014 at 12:10 PMHi Nicholas, Thanks for the chart of accounts and working on the other information that we need for the audit. We will let you know if we have any questions. Have a great 4th. TRS 12-10-2020-024 Mike TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Jul 18, 2014 at 2:51 PM Hi Nicholas, I just wanted to check in and see how things are coming along with the information that we requested for the audit and if you have any questions. Have a great weekend. Thanks, Mike TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Aug 8, 2014 at 2:24 PMHi Nicholas, Hope things have been going great for you. I also wanted to check and see how things are coming along with all of the information that was requested for the [city] (let me know if you would like me to resend you the list of items that were requested).[ ] If this is the case, go ahead and move forward with the other information that was requested for the audit. Also, wanted to check and see if you have had a chance to review the email below concerning some additional information that we requested for the audit. Thanks Nicholas. Have a great weekend. Mike Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Tue, Aug 12, 2014 at 1:08 PM Hi Mike – in reply to your e-mail below, do I not send anymore tax returns [ ]? …i.e., Renton,[ ]. As an aside, the V.P. of Tax is out of the office on vacation until next week and we will continue working on your questions below in order to provide you with feedback accordingly. Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ TRS 12-10-2020-025 This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Tue, Aug 12, 2014 at 1:52 PMHi Nicholas, If you have tax returns [ ] that would be great. I thought that TracFone had not submitted tax returns [ ]. Also, thanks for working on the other information that we requested. Let us know if you have any questions. Have a great afternoon. Mike Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Tue, Aug 19, 2014 at 3:21 PMHi Mike -- In regard to your TracFone-Renton, Washington State Utility Users' Tax Audit, please find attached to this e-mail a zip file containing TracFone’s Telephone Utility Users’ Tax Returns for the January 1, 2007 to December 31, 2007 period. * Renton, Washington State Utility Users' Tax Returns for the remaining periods under audit will be sent under separate e- mails.* Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com TRS <crisp@trs-integrity.com> To:nford@tracfone.com Tue, Aug 19, 2014 at 3:25 PMHi Nicholas, Thanks for the information. We will let you know if we have any questions. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> TRS 12-10-2020-026 To:crisp@trs-integrity.com Tue, Aug 19, 2014 at 3:28 PMHi Mike -- In regard to your TracFone-Renton, Washington State Utility Users' Tax Audit, please find attached to this e-mail a zip file containing TracFone’s Telephone Utility Users’ Tax Returns for the January 1, 2008 to December 31, 2008 period. * Renton, Washington State Utility Users' Tax Returns for the remaining periods under audit will be sent under separate e- mails.* Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Wed, Aug 20, 2014 at 8:06 AM Hi Mike -- In regard to your TracFone-Renton, Washington State Utility Users' Tax Audit, please find attached to this e-mail a zip file containing TracFone’s Telephone Utility Users’ Tax Returns for the January 1, 2009 to December 31, 2009 period. * Renton, Washington State Utility Users' Tax Returns for the remaining periods under audit will be sent under separate e- mails.* Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Wed, Aug 20, 2014 at 8:21 AM Hi Mike -- In regard to your TracFone-Renton, Washington State Utility Users' Tax Audit, please find attached to this e-mail a zip file containing TracFone’s Telephone Utility Users’ Tax Returns for the January 1, 2010 to December 31, 2010 period. * Renton, Washington State Utility Users' Tax Returns for the remaining periods under audit will be sent under separate e- mails.* Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Wed, Aug 20, 2014 at 8:37 AM TRS 12-10-2020-027 Hi Mike -- In regard to your TracFone-Renton, Washington State Utility Users' Tax Audit, please find attached to this e-mail a zip file containing TracFone’s Telephone Utility Users’ Tax Returns for the January 1, 2011 to December 31, 2011 period. * Renton, Washington State Utility Users' Tax Returns for the remaining periods under audit will be sent under separate e- mails.* Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Wed, Aug 20, 2014 at 8:49 AMHi Mike -- In regard to your TracFone-Renton, Washington State Utility Users' Tax Audit, please find attached to this e-mail a zip file containing TracFone’s Telephone Utility Users’ Tax Returns for the January 1, 2012 to December 31, 2012 period. * Renton, Washington State Utility Users' Tax Returns for the remaining periods under audit will be sent under separate e- mails.* Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Wed, Aug 20, 2014 at 8:56 AM Hi Mike -- In regard to your TracFone-Renton, Washington State Utility Users' Tax Audit, please find attached to this e-mail a zip file containing TracFone’s Telephone Utility Users’ Tax Returns for the January 1, 2013 to December 31, 2013 period. * Renton, Washington State Utility Users' Tax Returns for the remaining periods under audit will be sent under separate e- mails.* Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Fri, Aug 29, 2014 at 10:49 AM Hi Mike -- In regard to your TracFone-Renton, Washington State Utility Users' Tax Audit, please find attached to this e-mail a zip file containing TracFone’s Telephone Utility Users’ Tax Returns for the January 1, 2014 to May 31, 2014 period. TRS 12-10-2020-028 Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Aug 29, 2014 at 6:57 PMThanks Nicholas for the information. Have a great Labor Day Weekend. Mike Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Fri, Sep 5, 2014 at 2:28 PM Hi Mike – with regard to your questions concerning the telephone prepaid cards, please see our responses inserted below at the bottom of this e-mail chain in bold font. [ ] Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. From: TRS <crisp@trs-integrity.com> To: "nford@tracfone.com" <nford@tracfone.com> Sent: Friday, June 20, 2014 2:58 PM Subject: TracFone: Key issues regarding municipal taxation of calling cards Hi Nicholas, It was good talking with you. We also wanted to ask you a few questions concerning the telephone prepaid cards: TRS 12-10-2020-029 How does TracFone keep track of sales and revenue? TracFone tracks airtime sales revenue with airtime redemption as the general starting point. Does TracFone source calls at all? No, TracFone does not. How does TracFone keep record of calls and minutes used? TracFone does not own or operate any telephone facilities. Rather, it resells airtime purchased from third party carriers. The company receives some limited information about calls from the carriers. Does TracFone break calls and revenues down geographically, i.e. jurisdictionally? TracFone does not break calls down geographically, and the information received from carriers provides a limited ability to do so. We have some ability to identify redemption of airtime geographically and do so using the zip code assigned to the handset upon activation. Does TracFone keep track of the primary residence of the customers (primary place of use)? No, TracFone does not. This would include both pre-paid calling cards and recharges. Also, it is our understanding that TracFone has several brands (telephone cards) that they sell. These include: TracFone, Net10, StraightTalk, Simple Mobile, Telcel America. If there are any other brands, please include those also with the information that we have requested for the audit. Additional TracFone brands are Page Plus and SafeLink. Lastly, we have checked with the [City] of Renton, [ ] and they would like to go ahead and extend the audit out to May 31, 2014. [ ] By doing it this way, your company will not have to go back and prepare all of these month's tax returns yourself to catch up, and we can bring everything current as much as possible. At this point, we will not need any additional information due to the extension[]. Let me know if you have any questions concerning the items above or any questions on the information that was requested for the audit. Thanks Nicholas. We look forward to working with you on [this audit]. Have a great weekend. TRS 12-10-2020-030 Mike TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Sep 5, 2014 at 2:51 PMThanks Nicholas. We will let you know if we have any questions. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Wed, Sep 24, 2014 at 2:44 PM Hi Nicholas, Thanks for replying to our email. After reviewing your email(s), you have let us know that your company has not submitted any utility taxes to Renton [. ] In your email, you also said that TracFone does not source calls at all; but then you said that you identify redemption via zip codes collected from the customers. Isn't this a form of sourcing? It is our understanding that TracFone does pay the 911 taxes to the State of Washington, and so it does appear that you have to source calls at least for that purpose. We also noticed in your email that TracFone does not own or operate any telephone facilities. Perhaps when you say you don't own or operate a telephone facility, you mean that you don't have the towers or the satellites that make up the needed equipment to produce what you resell, and that would be true. But the city codes do not require this sort of facility as far as we can see. Looking into this, we could not find any definition of "telephone facilities," but the McMillan online dictionary defines facilities as "an area or building used for a particular purpose." TracFone does have areas inside each city for the sale of your services, and you have customer service, and an online presence, as well. TracFone is in the business of providing access to a telephone system, and provides wireless service by reselling the services purchased from others. TracFone also provides phones and connects these phones to various providers, [providing telecommunications equipment or apparatus or services related to that equipment or apparatus] including PCS, or personal communication services. [ ] The [city has] wording in their municipal code[ ]. And so it is our opinion that TracFone would owe the city utility taxes on these unreported revenues. TRS 12-10-2020-031 We were also looking at the court case TRACFONE WIRELESS INC v. WASHINGTON DEPARTMENT OF REVENUE. In this case, the Washington State Supreme Court issued a summary judgement in which it appears that the court definitely saw TracFone as a provider of telephone utility in that it states that TracFone provides wireless service by reselling services offered by others: ¶ 2 TracFone sells cell phones and prepaid wireless telephone services. It does not own or operate any wireless network facilities but instead contracts with other radio communication service companies to provide wireless telephone service and radio access lines and then resells the service. As of 2004, TracFone provided wireless service by reselling service offered by more than 35 licensed network operations in the United States. TracFone's prepaid wireless services and handsets are sold through more than 70,000 retail locations in this country, as well as through its Internet site. Approximately 30,000 cell phones are sold in this fashion every month. And also: ¶ 19 However, the language of RCW 82.14B.030(4) establishes that the legislature certainly intended that cell phone service be subject to the state E-911 excise tax. Whether prepaid or not, cell phone service is what is involved in this case. The plain language of the controlling statutes requires payment of the state E-911 excise tax on TracFone's prepaid wireless service. Although the case involved 911 taxes and not city tax, the two cases are very similar. The court was very clear that TracFone is liable for taxes on their radio access lines: ¶ 52 As the Department of Revenue correctly says, TracFone has effectively asked this court to find an implied exemption for prepaid wireless service. However, “taxation is the rule and exemption is the exception, and where there is an exception, the intention to make one should be expressed in unambiguous terms.” Columbia Irrig. Dist. v. Benton County, 149 Wash. 234, 240, 270 P. 813 (1928); accord Homestreet, Inc. v. Dep't of Revenue, 166 Wn.2d 444, 455, 210 P.3d 297 (2009); Budget Rent-A-Car of Wash .-Or., Inc. v. Dep't of Revenue, 81 Wn.2d 171, 174, 500 P.2d 764 (1972). RCW 82.14B.030(4) conclusively imposes the tax on the radio access lines within TracFone's service. To avoid the statute's plain language would require some language of exemption or exception. Belas v. Kiga, 135 Wn.2d 913, 934, 959 P.2d 1037 (1998) (the intent to exempt from taxation must be clear from the language of the statute(s)). Where taxing statutes are concerned, “[e]xemptions may not be created by implication.” Id. at 935. None of the statutes relied on by TracFone show clear intent to exempt prepaid wireless services from the state E-911 excise tax. To the contrary, the statutes leave no room for doubt that the “excise tax is imposed on all radio access lines.” RCW 82.14B .030(4) (emphasis added). The legislature's intent could not be clearer. - See more at: TRACFONE WIRELESS INC v. WASHINGTON DEPARTMENT OF REVENUE After reviewing all of the information mentioned above, we believe that TracFone owes the city utility taxes on these unreported revenues. Let us know if you have any questions. TRS 12-10-2020-032 Thanks Nicholas for all of your help with this audit. This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Oct 3, 2014 at 3:08 PM Hi Nicholas, Hope things have been going great for you. We also just wanted to check and see if you have any questions concerning our email that we sent to you. Have a great weekend. Thanks Nicholas. Mike TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Oct 10, 2014 at 1:51 PM Hi Nicholas, Hope things have been going great for you. We also just wanted to check and see if you have any questions concerning our email that we sent to you on September 24, 2014. Have a great weekend. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Fri, Oct 10, 2014 at 1:58 PM Hi Mike – yes we are aware of it and are still reviewing. We aim to get back to you sometime next week in that regard. TRS 12-10-2020-033 TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Oct 10, 2014 at 1:59 PM That's great. Thanks Nicholas. Mike Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Tue, Oct 21, 2014 at 11:34 AM Hi Mike – as you know, I am in receipt of your e-mail below. In that regard, we are contending with several competing audit related deadlines. As far as Washington is concerned, we are in the process of pulling Washington state-level data for purposes of furnishing on Nov. 17th in connection with a WA State excise tax audit. That said, we aim to discuss some numbers with you during the week of Nov. 17th regarding the [locality] that you are auditing—seeing that there will be data overlap where the WA state audit is concerned. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Tue, Oct 21, 2014 at 7:32 PM Hi Nicholas, Thanks for the update. Let me know if you need anything else from us. Hope things have been going great for you. Have a great day. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS 12-10-2020-034 TRS <crisp@trs-integrity.com> To:nford@tracfone.com Wed, Nov 19, 2014 at 3:52 PM Hi Nicholas, Hope everything has been going great for you. I also wanted to check and see how things are coming along with the information we requested for the audit. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Dec 5, 2014 at 2:10 PM Hi Nicholas, Hope things have been going well with you. I wanted to check and see how things are coming along with the information that we requested for the audit[ ]. Let us know if you have any questions. Thanks Nicholas. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Mon, Dec 8, 2014 at 2:27 PM TRS 12-10-2020-035 Hi Mike – [ ] And concerning your 9/24/14 e-mail to us, would you have availability on Friday of this week or sometime next week to discuss? Let me know some time slots that you may have. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com TRS <crisp@trs-integrity.com> To:nford@tracfone.com Tue, Dec 9, 2014 at 4:14 PM Hi Nicholas, [ ] As far as a telephone call, what about 12:30 (Pacific Standard Time)? I believe that would be 3:30 your time. Let us know if you have any questions. Thanks Nicholas. Have a great day. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Dec 11, 2014 at 5:56 PM Hi Nicholas, Just checking to see if 12:30 (PST)/3:30 tomorrow your time is still good for you. Thanks Nicholas. Have a great day. Mike TRS 12-10-2020-036 This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Fri, Dec 12, 2014 at 7:16 AM Hi Mike – can we move to next week? Our holiday party is actually this afternoon. I had thought the party was supposed to be next Friday. My mistake. Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Dec 12, 2014 at 11:42 AM Hi Nicholas, What about Tuesday at 12:30 our time and 3:30 your time? If not, let me know what would be a good time for you. [ ] Thanks Nicholas. Have a great time at your party. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Mon, Dec 15, 2014 at 12:58 PM Hi Nicholas, Hope you had a great weekend. I also wanted to check and see if 12:30 (PST) 3:30 your time works for you tomorrow? TRS 12-10-2020-037 Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Mon, Dec 15, 2014 at 1:01 PM Hi Mike – our V.P. of Tax is not in today but should be tomorrow. I will check with him in first thing in the a.m. tomorrow and let you know if your 3:30p EST time slot works. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Mon, Dec 15, 2014 at 1:36 PM Hi Nicholas, If you like, 12:30 (PST) 3:30 your time on Wednesday would also work for us. Thanks, Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Mon, Dec 15, 2014 at 2:02 PM Ok, thanks Mike. I will give the V.P. that alternate time slot as well. TRS <crisp@trs-integrity.com> TRS 12-10-2020-038 To:nford@tracfone.com Mon, Dec 15, 2014 at 2:07 PM Sounds good. Thanks, Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. <crisp@trs-integrity.com> To:nford@tracfone.com Tue, Dec 16, 2014 at 1:49 PM Hi Nicholas, Just wanted to check and see if we are on for 12:30 (PST) 3:30 your time tomorrow (Wednesday- 12/17). Thanks Nicholas, Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Wed, Dec 17, 2014 at 10:40 AM Hi Mike – hopefully, you receive this e-mail as I had sent you a call invite for today @ 3:30pm EST and I just noticed an ‘undeliverable’ meeting invite response. In any event, are you able to call the V.P. of Tax – Chesley Dillon – at (305) 715-3733 at that time? We can then have the call discussion. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Wed, Dec 17, 2014 at 10:49 AM TRS 12-10-2020-039 Hi Nicholas, Yes, 3:30 your time will work for us. We will give Mr. Dillon a call. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Dec 18, 2014 at 3:25 PM Hi Nicholas, I would like to thank you and Mr. Dillon for contacting us concerning the audit. Like you, it is our desire to be sure that this audit is done correctly. After further review of the situation, TRS will need sufficient time to meet with the [city] to discuss the audit. In addition, we will also be seeking legal counsel on how to best move forward with the audit. At this time, we will not be able to meet with Mr. Dillon and Mr. Edwards. After we have concluded our meetings, we will contact you. At this time, we do not have a time table, but we hope to move as fast as we can on this audit. Also, we do not have Mr. Dillon's email address; we would appreciate it if you would forward this message to him. Thanks Nicholas. Mike TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Dec 18, 2014 at 9:45 PM I thought I would resend this email in case you did not receive it the first time. Hi Nicholas, I would like to thank you and Mr. Dillon for contacting us concerning the audit. Like you, it is our desire to be sure that this audit is done correctly. After further review of the situation, TRS will need sufficient time to meet with the [city to discuss the audit. In addition, we will also be seeking legal counsel on how to best move forward with the audit. At this time, we will not be able to meet with Mr. Dillon and Mr. Edwards. After we have concluded TRS 12-10-2020-040 our meetings, we will contact you. At this time, we do not have a time table, but we hope to move as fast as we can on this audit. Also, we do not have Mr. Dillon's email address; we would appreciate it if you would forward this message to him. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Mon, Mar 9, 2015 at 4:26 PM Hi Nicholas, Hope everything is going well for you. We have had a chance to review the TracFone audit with the [city] and legal counsel on how they would like us to move forward with the audit. [The] city has informed us that they would like us to receive the information that was requested for the audit before meeting with your attorney. Your company has the legal obligation to open your books, supply the information we request, and let us perform an audit. If after the information that was requested has been forthcoming, and we have had a chance to examine the information, then you will have your chance to present us with any unique situations you believe may exist concerning your business. If you have any questions on what was requested for the audit, let us know, and we would be glad to clarify what is needed. Thanks Nicholas. Mlke This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Wed, May 13, 2015 at 2:55 PM TRS 12-10-2020-041 Hi Nicholas, Hope things have been going well with you. We received a telephone call from your office, but no one left a message. Did you have some questions concerning the subpoena[ ] or concerning what information we need to conduct the audit? If you do , could you send them by email. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Fri, May 29, 2015 at 8:36 AM Hi Mike – I have a question related to your list of requested items in Exhibit A for the [city] under audit. Specifically, it is to be noted that TracFone does not bill or invoice its customers. As such, please clarify your request for invoices for customers in the [city] under audit for the stated sample periods. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS<crisp@trs-integrity.com> To:nford@tracfone.com Fri, May 29, 2015 at 2:40 PM Hi Nicholas, Good to hear from you. Do you have any record at all that shows how the customer is charged and what they are charged? How does your customer know what he is being billed? The reason why we need this information is to show what revenues are taxable and what revenues would not be taxable. Can you show us how you TRS 12-10-2020-042 calculate (and on what amounts you calculate) FCC fees, regulatory fees and such for the customer? Or if you do it in aggregate, show us how this is done. So if you do not do individual invoices, give us revenue information at a higher level that shows the same break out of fees and taxes that could then be broken down (by division) to approximate the individual invoices. If you have the number of sales per month for those months, that would be good, as we could divide by that amount to approximate invoices. Since in the court case with the State of Washington and TracFone, where the issue was with the 911 charge, TracFone is required to calculate these fees for Washington State, there must be some type of break out for Washington State for calculating the 911 charge. It seems that a sourcing of sorts would be necessary for this. And the Washington State tax return would also be a good starting point for coming up with these estimates. Please send us what information you have on these issues so that we can calculate as closely as possible what the [city] would believe is taxable. Thanks Nicholas. Let me know if you have any other questions. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Wed, Jun 3, 2015 at 1:40 PM Hi Mike – in regard to the TRS-TracFone WA local [city audit], it appears that there may be overlapping zip codes [ ]. [ ] I am hoping that you could specify the zip codes that are exclusive to [the city] under audit so that we can respond to your data requests. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS 12-10-2020-043 TRS <crisp@trs-integrity.com> To:nford@tracfone.com Wed, Jun 3, 2015 at 5:59 PM Hi Nicholas, I will check with the [city] and see what I can come up with. Thanks Nicholas. Let us know if you have any more questions. Have a great day. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <Crisp@trs-integrity.com> To:nford@tracfone.com Tue, Jun 9, 2015 at 12:22 PM Hi Nicholas, Hope everything has been going great for you. Sorry Nicholas, I thought we sent this to you. Here are the zip codes for [the city]. [ ] For Renton, we have 98055, 98056, 98057, 98058, and 98059, and 98178. [ ] We understand that many of these are not completely inside of the [city], but we are hoping that having them will help somewhat in gauging the accuracy of estimates. Be sure to segregate the zip information instead of lumping them all together, because some of the zips are all-in, and some are not. If you happened to collect the suffix of the zip code [ ], those would contain the actuals for the city. But our guess is that this would only happen sporadically, and would be unreliable information. [ ] Thanks Nicholas. Let us know if you have any questions. Mike TRS 12-10-2020-044 This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Thu, Jun 11, 2015 at 8:32 AM Hi Mike – thanks for the update. I’ll be working over the weekend in order to begin rolling out the data early next week, at the latest. However, please be advised that we believe there could be a number of discrepancies and overlaps regarding the [city] zip codes, and that we are not in agreement with the zip codes provided. As an aside, below [is the audit period] that I have with respect to [the city] under audit. Let me know if you see anything amiss. [ ] Renton: January 1, 2007—May 31, 2014 [ ] Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Jun 11, 2015 at 6:22 PM Thanks Nicholas for all of your help with the [audit]. We really appreciate it. Also, I am sure we will come up with something that works for both of us concerning the zip codes. Also, see below in your email in bold where there were some corrections on the dates of the audit[]. Let us know if you see anything different. Let us know if you have any questions with the information that we need for the audit. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS 12-10-2020-045 From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com> Sent: Thursday, June 11, 2015 8:31 AM Subject: RE: Zip codes and the audit Hi Mike – thanks for the update. I’ll be working over the weekend in order to begin rolling out the data early next week, at the latest. However, please be advised that we believe there could be a number of discrepancies and overlaps regarding [the city’s] zip codes, and that we are not in agreement with the zip codes provided. As an aside, below [is the audit period] that I have with respect to [the city] under audit. Let me know if you see anything amiss. [ ] Renton: January 1, 2007—May 31, 2014 [ ] Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Jun 25, 2015 at 4:17 PM Hi Nicholas, We received an email from the City of Renton and they told us that they have not received the information that was requested for the subpoena. Below is listed the information that was requested for the Renton audit. This information was requested by subpoena on May 5th with forty-five days to comply; these 45 days have passed, and nothing has been received for Renton. Please reply to each of the requests below, stating TracFone's position as to why you have not replied (or possibly how you have already replied or when you plan to reply). For the City of Renton, regarding TracFone Wireless brands including TracFone, NET10 Wireless, Safelink Wireless, Straight Talk, Telcel América, SIMPLE Mobile, and Page Plus Cellular and any other subgroup:  A list of all revenue figures by account category earned in Washington State for each year of the audit. TRS 12-10-2020-046  A list of all revenue figures by account category earned in Renton, including the March 1, 2008 annexation, for each year of the audit, or a statement saying that TracFone Wireless does not record city-specific data.  Any information regarding how TracFone Wireless breaks out revenues as to what is intrastate and what is interstate, and if these are not broken out, a statement saying that TracFone Wireless does not break out revenues between intrastate and interstate.  Invoices for customers in Renton for March of 2008, June of 2010, and September of 2012 and January of 2013. Go ahead and edit out any personal customer information.  Renton sales revenues for prepaid cards for each year of the audit; if these figures are not broken out, provide Washington State revenues for prepaid cards for each year of the audit.  Revenues for recharge of prepaid cards for each year of the audit; if these figures are not broken out, provide Washington State revenues for recharge of prepaid cards for each year of the audit.  Information on how TracFone Wireless sources calls.  Information on how TracFone Wireless keeps record of calls and minutes used.  Information on how TracFone Wireless breaks calls and revenues down geographically, i.e. jurisdictionally. If they only break them down state-wise, show how this is done.  Information on whether TracFone Wireless keeps track of the primary residence of the customers (primary place of use).  Any other pertinent information relating to this audit Thanks Nicholas. Let us know if you have any questions. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. NOTE: Renton zip code data started arriving on June 26, 2015. These emails and attachments have are being submitted separately. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Aug 21, 2015 at 1:16 PM Hi Nichols, TRS 12-10-2020-047 Hope things have been going well with you. Also, do you know how soon it will be when you will be able to get back with us concerning [ ] -On the Billing Platform sheets. First, in the Tax 911 column, is this the State-only tax, or the State plus county tax for this zip? Second, what is the Amount column for? Third, how is this amount related to the 911 tax? We see there is a regular mathematical relationship, but since 911 is calculated on a per line monthly charge, where do the values in the Amount column come from? Let us know if you have any questions. Have a great weekend.. Mike Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Mon, Aug 24, 2015 at 10:49 AM Hi Mike – I’ve got a draft answer back from my contacts on your query below. Expect to have to you shortly once Tax V.P. gets a chance to look over. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Mon, Aug 24, 2015 at 12:05 PM Thanks Nicholas. That sounds great. Have a good afternoon. Mike Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Tue, Aug 25, 2015 at 1:37 PM Hi Mike – as discussed, please see responses below (highlighted in bold font) to your audit questions in the attached e-mail. On the Billing Platform sheets. TRS 12-10-2020-048 First, in the Tax 911 column, is this the State-only tax, or the State plus county tax for this zip? Yes, it is State plus county tax. Second, what is the Amount column for? Third, how is this amount related to the 911 tax? The amount column in the attached is the total dollar amount of items purchased within the zip code. It does not include any tax, fees, or assessments. Third, we see there is a regular mathematical relationship, but since 911 is calculated on a per line monthly charge, where do the values in the Amount column come from? See Second question reply, above. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Tue, Aug 25, 2015 at 2:03 PM Thanks Nicholas. We will review your answers and will get back with you if we have any questions. [ ] Have a great afternoon. Mike TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Sep 25, 2015 at 2:32 PM Hi Nicholas, I hope things have been going well for you. I have a question concerning the sets of emails you gave me that had to do with your utility taxes. When looking through the attachments, I saw the billing platform, but I was not sure if that was your gross sales or simply one of many labels that all summed up to your gross. Can you tell me if you have any other labels or if the billing platform in your emails represent your gross? Thanks, TRS 12-10-2020-049 Mike TRS <crisp@trs-integrity.com> To:nford@tracfone.com Mon, Oct 5, 2015 at 3:00 PM Hi Nicholas, Here is another question that we sent to you. Let us know if you have any questions about it. Thanks Nicholas. Mike ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Friday, September 25, 2015 2:32 PM Subject: Billing Platform Hi Nicholas, I hope things have been going well for you. I have a question concerning the sets of emails you gave me that had to do with your utility taxes. When looking through the attachments, I saw the billing platform, but I was not sure if that was your gross sales or simply one of many labels that all summed up to your gross. Can you tell me if you have any other labels or if the billing platform in your emails represent your gross? Thanks, Mike Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Mon, Oct 5, 2015 at 6:13 PM Hi Mike – we are wrapping up our month-end close. I’ll be in touch with you tomorrow afternoon regarding your questions. [ ] Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Tue, Oct 6, 2015 at 12:44 PM Thanks Nicholas. That sounds great. TRS 12-10-2020-050 Have a great afternoon. Mike Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Thu, Oct 15, 2015 at 11:05 AM Hi Mike – below is your question and my answer to the same. Question: I have a question concerning the sets of emails you gave me that had to do with your utility taxes. When looking through the attachments, I saw the billing platform, but I was not sure if that was your gross sales or simply one of many labels that all summed up to your gross. Can you tell me if you have any other labels or if the billing platform in your emails represent your gross? Response: Each set (of three excel files) contained in my e-mails, Billing Platform, APP, and telephones sales and accessories comprise TracFone’s “gross” direct (retail) sales for a given month when summed together. Therefore, Billing Platform is one of the labels and components that sum up to our gross sales. Let me know if you have any further question on this. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Oct 15, 2015 at 12:51 PM Hi Nicholas, Below is the other question that we sent to you. Thanks for sending the email for the billing platform. We will let you know if we have any more quesitons [ ] you say "We have some ability to identify redemption of airtime geographically and do so using the zip code assigned to the handset upon activation." Would you please explain what ability you have to identify airtime redemption geographically by zip? Thanks, Mike TRS 12-10-2020-051 NOTE: For the Renton audit the above refers to the email Sent: Friday, June 20, 2014 2:58 PM TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Oct 15, 2015 at 2:53 PM Hey Nicholas, Thanks for your response! So the other brands such as: Page Plus Air, Page Plus, BrightPoint, Straight Talk, SafeLink, Simple Mobile, Telcel America and Net10 Wireless are included in your total gross as well? Are the billing platform, the telephone sales and the accessories that you sent over include all of your brands? If they are not part of the gross, how do you reconcile them? Thanks for your help. Mike TRS <crisp@trs-integrity.com> To:nford@tracfone.com Tue, Nov 3, 2015 at 3:18 PM Hi Nicholas, I also wanted to check and see how thins are coming along with the question below. Let us know if you have any questions. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Thursday, October 15, 2015 12:51 PM Subject: Identifying redempton of airtime geographically Hi Nicholas, Below is the other question that we sent to you. Thanks for sending the email for the billing platform. We will let you know if we have any more quesitons [ ] you say "We have some ability to identify redemption of airtime geographically and do so using the zip code assigned to the handset upon activation." Would you please explain what ability you have to identify airtime redemption geographically by zip? TRS 12-10-2020-052 Thanks, Mike NOTE: For the Renton audit the above refers to the email Sent: Friday, June 20, 2014 2:58 PM TRS <crisp@trs-integrity.com> To:nford@tracfone.com Tue, Nov 3, 2015 at 3:17 PM Hi Nicholas, [ ] I also wanted to check and see if you have had a chance to review the question below. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Thursday, October 15, 2015 2:53 PM Subject: Re: Billing Platorm Question and Response Hey Nicholas, Thanks for your response! So the other brands such as: Page Plus Air, Page Plus, BrightPoint, Straight Talk, SafeLink, Simple Mobile, Telcel America and Net10 Wireless are included in your total gross as well? Are the billing platform, the telephone sales and the accessories that you sent over include all of your brands? If they are not part of the gross, how do you reconcile them? Thanks for your help. Mike TRS <crisp@trs-integrity.com> To:nford@tracfone.com Tue, Nov 3, 2015 at 3:17 PM Hi Nicholas, [ ] TRS 12-10-2020-053 I also wanted to check and see if you have had a chance to review the question below. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Thursday, October 15, 2015 2:53 PM Subject: Re: Billing Platorm Question and Response Hey Nicholas, Thanks for your response! So the other brands such as: Page Plus Air, Page Plus, BrightPoint, Straight Talk, SafeLink, Simple Mobile, Telcel America and Net10 Wireless are included in your total gross as well? Are the billing platform, the telephone sales and the accessories that you sent over include all of your brands? If they are not part of the gross, how do you reconcile them? Thanks for your help. Mike NOTE: More zip code information started arriving on November 10, 2015. These are being submitted separately. From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Tuesday, November 3, 2015 3:17 PM Subject: Fw: Billing Platorm Question and Response Hi Nicholas, [ ] I also wanted to check and see if you have had a chance to review the question below. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Thursday, October 15, 2015 2:53 PM Subject: Re: Billing Platorm Question and Response Hey Nicholas, TRS 12-10-2020-054 Thanks for your response! So the other brands such as: Page Plus Air, Page Plus, BrightPoint, Straight Talk, SafeLink, Simple Mobile, Telcel America and Net10 Wireless are included in your total gross as well? Are the billing platform, the telephone sales and the accessories that you sent over include all of your brands? If they are not part of the gross, how do you reconcile them? Thanks for your help. Mike TRS <crisp@trs-integrity.com> To:nford@tracfone.com Mon, Nov 16, 2015 at 3:59 PM Hi Nicholas, Also, wanted to check on how things are coming along with the question I sent you below. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Forwarded Message ----- Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Wed, Nov 25, 2015 at 7:56 AM Hi Mike – in reference to your questions below, please see the responses inserted in bold font. As an aside, we are working on your remaining question regarding “identifying redemption of airtime geographically.” Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. From: TRS [mailto:crisp@trs-integrity.com] Sent: Thursday, October 15, 2015 5:54 PM To: Nicholas Ford Subject: Re: Billing Platorm Question and Response TRS 12-10-2020-055 Hey Nicholas, Thanks for your response! (1) So the other brands such as: Page Plus Air, Page Plus, BrightPoint, Straight Talk, SafeLink, Simple Mobile, Telcel America and Net10 Wireless are included in your total gross as well? Yes, any purchases relating to those brands would be included in the total gross. (2) Are the billing platform, the telephone sales and the accessories that you sent over include all of your brands? Yes, they do include all brands. (3) If they are not part of the gross, how do you reconcile them? See responses above. Thanks for your help. Mike TRS <crisp@trs-integrity.com> To:nford@tracfone.com Mon, Nov 16, 2015 at 3:59 PM Hi Nichols, Hope you had a great weekend. I also wanted to check and see how things are coming along with the questions we sent you below. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Tuesday, November 3, 2015 3:18 PM Subject: Fw: Identifying redempton of airtime geographically Hi Nicholas, TRS 12-10-2020-056 I also wanted to check and see how thins are coming along with the question below. Let us know if you have any questions. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Thursday, October 15, 2015 12:51 PM Subject: Identifying redempton of airtime geographically Hi Nicholas, Below is the other question that we sent to you. Thanks for sending the email for the billing platform. We will let you know if we have any more quesitons [ ] you say "We have some ability to identify redemption of airtime geographically and do so using the zip code assigned to the handset upon activation." Would you please explain what ability you have to identify airtime redemption geographically by zip? Thanks, Mike NOTE: For the Renton audit the above refers to the email Sent: Friday, June 20, 2014 2:58 PM Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Wed, Nov 25, 2015 at 7:56 AM Hi Mike – in reference to your questions below, please see the responses inserted in bold font. As an aside, we are working on your remaining question regarding “identifying redemption of airtime geographically.” Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS 12-10-2020-057 From: TRS [mailto:crisp@trs-integrity.com] Sent: Thursday, October 15, 2015 5:54 PM To: Nicholas Ford Subject: Re: Billing Platorm Question and Response Hey Nicholas, Thanks for your response! (1) So the other brands such as: Page Plus Air, Page Plus, BrightPoint, Straight Talk, SafeLink, Simple Mobile, Telcel America and Net10 Wireless are included in your total gross as well? Yes, any purchases relating to those brands would be included in the total gross. (2) Are the billing platform, the telephone sales and the accessories that you sent over include all of your brands? Yes, they do include all brands. (3) If they are not part of the gross, how do you reconcile them? See responses above. Thanks for your help. Mike TRS <crisp@trs-integrity.com> To:nford@tracfone.com Wed, Nov 25, 2015 at 2:05 PM Hi Nicholas, Thanks for your reply to my question. After reviewing your email, we will still need to see a month reconciled showing that each brand amount that was sold in that city adds up to the amount that you sent to us. [ ] Let us know if you have any questions with the information above or with the other question that we sent you on November 16, 2015 concerning your ability to identify airtime redemption geographically by zip. Thanks Nicholas. Have a Happy Thanksgiving. Mike TRS 12-10-2020-058 This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Dec 3, 2015 at 3:11 PM Hi Nicholas, Hope all is well with you. I wanted to check and see how things are coming along with the items below. Let me know if you have any questions. Thanks Nicholas. Have a great eveining. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Wednesday, November 25, 2015 2:05 PM Subject: Re: Billing Platorm Question and Response Hi Nicholas, Thanks for your reply to my question. After reviewing your email, we will still need to see a month reconciled showing that each brand amount that was sold in that city adds up to the amount that you sent to us.[ ] Let us know if you have any questions with the information above or with the other question that we sent you on November 16, 2015 concerning your ability to identify airtime redemption geographically by zip. Thanks Nicholas. Have a Happy Thanksgiving. Mike TRS 12-10-2020-059 This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Dec 3, 2015 at 3:11 PM Hi Nicholas, Hope all is well with you. I wanted to check and see how things are coming along with the item[] below. Let me know if you have any questions. Thanks Nicholas. Have a great eveining. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Wednesday, November 25, 2015 2:05 PM Subject: Re: Billing Platorm Question and Response Hi Nicholas, Thanks for your reply to my question. After reviewing your email, we will still need to see a month reconciled showing that each brand amount that was sold in that city adds up to the amount that you sent to us.[ ] Let us know if you have any questions with the information above or with the other question that we sent you on November 16, 2015 concerning your ability to identify airtime redemption geographically by zip. Thanks Nicholas. TRS 12-10-2020-060 Have a Happy Thanksgiving. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Dec 3, 2015 at 3:49 PM Hi Nicholas, I also forgot to ask you to send a reconciliation for the City of Renton [ ] for the month June of 2015 showing how all the brands are reconciled to the amount that was sent to us by you. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Mon, Dec 7, 2015 at 3:44 PM Hi Nicholas, Hope you had a great weekend. I also wanted to check and see how things are coming along with the information that we requested below. Let us know if you have any questions. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS 12-10-2020-061 ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Wednesday, November 25, 2015 2:05 PM Subject: Re: Billing Platorm Question and Response Hi Nicholas, Thanks for your reply to my question. After reviewing your email, we will still need to see a month reconciled showing that each brand amount that was sold in that city adds up to the amount that you sent to us. [ ] Let us know if you have any questions with the information above or with the other question that we sent you on November 16, 2015 concerning your ability to identify airtime redemption geographically by zip. Thanks Nicholas. Have a Happy Thanksgiving. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Fri, Dec 11, 2015 at 10:02 AM Hi Mike [ ] – relating to identifying redemption of airtime geographically – below. [ ] TracFone is a non-facilities based reseller of prepaid wireless airtime. Much of the company’s revenue is from wholesale sales of prepaid wireless airtime cards, and is not subject to local utility tax. RCW 35.21.714(1) (excluding the sale of telephone service “for resale” from local utility tax). While TracFone can track redemptions of airtime purchased by consumers from TracFone’s wholesale customers (i.e. Walmart and other retailers) according to the zip code provided by the end user when a handset is activated, those reports do not track either calls or service (airtime) usage, such information is not relevant to local utility taxes, which are imposed on gross revenue from intrastate toll telephone service. TracFone also makes direct retail sales of prepaid airtime to consumers. TracFone can track its direct sales of airtime by customer’s credit card billing address. However, only a portion of TracFone’s direct sales are subject to local utility tax in the consumer’s city. Local utility tax only applies to gross revenue from retail customers of intrastate toll telephone service; it does not apply to revenue from interstate telephone service, RCW 35.21.714(1), or to internet service. Community Telecable v. Seattle, 164 Wn.2d 35 (2008). Customers use prepaid wireless airtime not just (or even primarily) for taxable intrastate telephone service, but also for nontaxable interstate and internet service. Consequently, revenue from sales to consumers with a zip code in the [city] you are auditing for will need to be adjusted to deduct the portion of revenue from interstate telephone service and internet service. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ TRS 12-10-2020-062 This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Dec 11, 2015 at 3:04 PM Hi Nicholas, Thank for the email. We will review it and get back with you. Have a great weekend. Mike TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Dec 31, 2015 at 12:12 PM Hi Nicholas, Hope things have been going well with you. We hope to get back with you next week concerning the email below. I also wanted to check and see how things are coming along with the reconciliations (email sent to you on November 26th(sic)) for the different brands to the gross revenues that you sent us. Let us know if you have any questions. Thanks Nicholas. Have a Happy New Year! Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Jan 8, 2016 at 2:26 PM Hi Nicolas, Hope things have been going well with you. We have replied to your comments below in bold lettering. This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS 12-10-2020-063 From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com> Sent: Friday, December 11, 2015 9:59 AM Subject: RE: Identifying redemption of airtime geographically & [ ] Hi Mike [ ] – relating to identifying redemption of airtime geographically – below. [ ] TracFone is a non-facilities based reseller of prepaid wireless airtime. Much of the company’s revenue is from wholesale sales of prepaid wireless airtime cards, and is not subject to local utility tax. RCW 35.21.714(1) (excluding the sale of telephone service “for resale” from local utility tax). While TracFone can track redemptions of airtime purchased by consumers from TracFone’s wholesale customers (i.e. Walmart and other retailers) according to the zip code provided by the end user when a handset is activated, those reports do not track either calls or service (airtime) usage, such information is not relevant to local utility taxes, which are imposed on gross revenue from intrastate toll telephone service. After reviewing your email we would have to disagree with your interpretation of the RCW quoted above; it is our understanding that this part of the RCW instead protects the company that sells the airtime to TracFone when it states: " . . . the city shall not impose the fee or tax on that portion of network telephone service which represents . . . charges for network telephone service that is purchased for the purpose of resale . . . " It is they that "charged" TracFone for the "service purchased for resale." Walmart is not selling telephone service. Walmart is not a utility provider. In the fact that TracFone sold the cards to Walmart, the State of Washington still sees TracFone as the seller of the utility to the customer, as the customers purchase a card from Walmart, but the customers are only buying the means of accessing the utility you are providing for them; the cards reference you, and your company is the company that connects them to the utility service. It is the utility service usage that you, and not Walmart, provide to the customer that is taxable by the City. All the utilities providing services through cards sold at Walmart must pay the utility taxes themselves. Another important point to note is that it is not sales that are taxed, but rather usage. But sinceTracFone does not keep track of airtime, the utility usage must be estimated, most likely using sales data. We need to know, then, if the data you are sending regarding billing sales includes the sales done by Walmart and other retailers. TRS 12-10-2020-064 TracFone also makes direct retail sales of prepaid airtime to consumers. TracFone can track its direct sales of airtime by customer’s credit card billing address. However, only a portion of TracFone’s direct sales are subject to local utility tax in the consumer’s city. Local utility tax only applies to gross revenue from retail customers of intrastate toll telephone service; it does not apply to revenue from interstate telephone service, RCW 35.21.714(1), or to internet service. Community Telecable v. Seattle, 164 Wn.2d 35 (2008). Customers use prepaid wireless airtime not just (or even primarily) for taxable intrastate telephone service, but also for nontaxable interstate and internet service. Consequently, revenue from sales to consumers with a zip code in the [city] you are auditing for will need to be adjusted to deduct the portion of revenue from interstate telephone service and internet service. We agree that interstate and internet are generally not taxable. However, in the case of interstate long distance, Washington State law RCW 82.32.510 requires that the interstate portion be broken out in the regular course of business"; if not, the aggregate amount may be taxed. If TracFone does not do this, it is possible that your company will owe taxes on the whole of long distance charges. Would you be able to break out the interstate amounts? Regarding internet, since the data you sent us breaks out internet, these amounts will be easy to identify and would not be taxable. Let us know if you have any questions Thanks Nicholas. Have a great afternoon. Mike Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. NOTE: There was a repeat of the above sent at 2:58pm. Same email. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Jan 29, 2016 at 1:45 PM Hi Nicholas, TRS 12-10-2020-065 Hope everything is going well with you. Also, just checking to see if you have had a chance to review the email below. Have a great weekend. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Friday, January 8, 2016 2:58 PM Subject: Re: Identifying redemption of airtime geographically & [ ] Hi Nicolas, Hope things have been going well with you. We have replied to your comments below in bold lettering. This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com> Sent: Friday, December 11, 2015 9:59 AM Subject: RE: Identifying redemption of airtime geographically & [ ] Hi Mike – as discussed, please see our response to your question – relating to identifying redemption of airtime geographically – below.[ ] TracFone is a non-facilities based reseller of prepaid wireless airtime. Much of the company’s revenue is from wholesale sales of prepaid wireless airtime cards, and is not subject to local utility tax. RCW 35.21.714(1) (excluding the sale of telephone service “for resale” from local utility tax). While TracFone can track redemptions of airtime purchased by consumers from TracFone’s wholesale customers (i.e. Walmart and other retailers) according to the zip code provided by the end user when a handset is activated, those reports do not track either calls or service (airtime) usage, such information is not relevant to local utility taxes, which are imposed on gross revenue from intrastate toll telephone service. TRS 12-10-2020-066 After reviewing your email we would have to disagree with your interpretation of the RCW quoted above; it is our understanding that this part of the RCW instead protects the company that sells the airtime to TracFone when it states: " . . . the city shall not impose the fee or tax on that portion of network telephone service which represents . . . charges for network telephone service that is purchased for the purpose of resale . . . " It is they that "charged" TracFone for the "service purchased for resale." Walmart is not selling telephone service. Walmart is not a utility provider. In the fact that TracFone sold the cards to Walmart, the State of Washington still sees TracFone as the seller of the utility to the customer, as the customers purchase a card from Walmart, but the customers are only buying the means of accessing the utility you are providing for them; the cards reference you, and your company is the company that connects them to the utility service. It is the utility service usage that you, and not Walmart, provide to the customer that is taxable by the City. All the utilities providing services through cards sold at Walmart must pay the utility taxes themselves. Another important point to note is that it is not sales that are taxed, but rather usage. But since TracFone does not keep track of airtime, the utility usage must be estimated, most likely using sales data. We need to know, then, if the data you are sending regarding billing sales includes the sales done by Walmart and other retailers. TracFone also makes direct retail sales of prepaid airtime to consumers. TracFone can track its direct sales of airtime by customer’s credit card billing address. However, only a portion of TracFone’s direct sales are subject to local utility tax in the consumer’s city. Local utility tax only applies to gross revenue from retail customers of intrastate toll telephone service; it does not apply to revenue from interstate telephone service, RCW 35.21.714(1), or to internet service. Community Telecable v. Seattle, 164 Wn.2d 35 (2008). Customers use prepaid wireless airtime not just (or even primarily) for taxable intrastate telephone service, but also for nontaxable interstate and internet service. Consequently, revenue from sales to consumers with a zip code in the [city] you are auditing for will need to be adjusted to deduct the portion of revenue from interstate telephone service and internet service. We agree that interstate and internet are generally not taxable. However, in the case of interstate long distance, Washington State law RCW 82.32.510 requires that the interstate portion be broken out in the regular course of business"; if not, the aggregate amount may be taxed. If TracFone does not do this, it is possible that your company will owe taxes on the whole of long distance charges. Would you be able to break out the interstate amounts? TRS 12-10-2020-067 Regarding internet, since the data you sent us breaks out internet, these amounts will be easy to identify and would not be taxable. Let us know if you have any questions Thanks Nicholas. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Wed, Feb 3, 2016 at 2:25 PM Hi Nicholas, Just checking to see if you have had a chance to review the email below. Have a great afternoon. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Friday, January 8, 2016 2:58 PM Subject: Re: Identifying redemption of airtime geographically & [ ] Hi Nicolas, Hope things have been going well with you. We have replied to your comments below in bold lettering. This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be TRS 12-10-2020-068 prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com> Sent: Friday, December 11, 2015 9:59 AM Subject: RE: Identifying redemption of airtime geographically & [ ] Hi Mike – as discussed, please see our response to your question – relating to identifying redemption of airtime geographically – below. [ ] TracFone is a non-facilities based reseller of prepaid wireless airtime. Much of the company’s revenue is from wholesale sales of prepaid wireless airtime cards, and is not subject to local utility tax. RCW 35.21.714(1) (excluding the sale of telephone service “for resale” from local utility tax). While TracFone can track redemptions of airtime purchased by consumers from TracFone’s wholesale customers (i.e. Walmart and other retailers) according to the zip code provided by the end user when a handset is activated, those reports do not track either calls or service (airtime) usage, such information is not relevant to local utility taxes, which are imposed on gross revenue from intrastate toll telephone service. After reviewing your email we would have to disagree with your interpretation of the RCW quoted above; it is our understanding that this part of the RCW instead protects the company that sells the airtime to TracFone when it states: " . . . the city shall not impose the fee or tax on that portion of network telephone service which represents . . . charges for network telephone service that is purchased for the purpose of resale . . . " It is they that "charged" TracFone for the "service purchased for resale." Walmart is not selling telephone service. Walmart is not a utility provider. In the fact that TracFone sold the cards to Walmart, the State of Washington still sees TracFone as the seller of the utility to the customer, as the customers purchase a card from Walmart, but the customers are only buying the means of accessing the utility you are providing for them; the cards reference you, and your company is the company that connects them to the utility service. It is the utility service usage that you, and not Walmart, provide to the customer that is taxable by the City. All the utilities providing services through cards sold at Walmart must pay the utility taxes themselves. TRS 12-10-2020-069 Another important point to note is that it is not sales that are taxed, but rather usage. But since TracFone does not keep track of airtime, the utility usage must be estimated, most likely using sales data. We need to know, then, if the data you are sending regarding billing sales includes the sales done by Walmart and other retailers. TracFone also makes direct retail sales of prepaid airtime to consumers. TracFone can track its direct sales of airtime by customer’s credit card billing address. However, only a portion of TracFone’s direct sales are subject to local utility tax in the consumer’s city. Local utility tax only applies to gross revenue from retail customers of intrastate toll telephone service; it does not apply to revenue from interstate telephone service, RCW 35.21.714(1), or to internet service. Community Telecable v. Seattle, 164 Wn.2d 35 (2008). Customers use prepaid wireless airtime not just (or even primarily) for taxable intrastate telephone service, but also for nontaxable interstate and internet service. Consequently, revenue from sales to consumers with a zip code in the [city] you are auditing for will need to be adjusted to deduct the portion of revenue from interstate telephone service and internet service. We agree that interstate and internet are generally not taxable. However, in the case of interstate long distance, Washington State law RCW 82.32.510 requires that the interstate portion be broken out in the regular course of business"; if not, the aggregate amount may be taxed. If TracFone does not do this, it is possible that your company will owe taxes on the whole of long distance charges. Would you be able to break out the interstate amounts? Regarding internet, since the data you sent us breaks out internet, these amounts will be easy to identify and would not be taxable. Let us know if you have any questions Thanks Nicholas. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Wed, Feb 3, 2016 at 3:51 PM Hi Mike – we’ve just completed our review of your email and we would like to set up a meeting with you to discuss further. As you may recall, you had sent me the email below on 12/18/14 in response to our request to meet with you on 1/20/15 to go over our thoughts concerning a potential way forward with regard to your [audit]. TRS 12-10-2020-070 12/18/14 e-mail from you – “After further review of the situation, TRS will need sufficient time to meet with the [city] to discuss the audit. In addition, we will also be seeking legal counsel on how to best move forward with the audit. At this time, we will not be able to meet with Mr. Dillon and Mr. Edwards. After we have concluded our meetings, we will contact you. At this time, we do not have a time table, but we hope to move as fast as we can on this audit.” Essentially, I am asking that we revisit your timetable on the issue of our meeting request. Kindly let me know your thoughts in that regard. respectfully, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Feb 5, 2016 at 1:59 PM Hi Nicholas, Thanks for the email. In the email that we sent to you on December 18, 2014, we mentioned that we needed to discuss with [the city] how to move forward with the audit. After we reviewed the situation with them, the [city] determined that we would need the financial information that we requested for the audit before we would be able to have a meeting, if necessary, between their attorneys and your attorneys. At this point, we do not have the information that we need to move forward with the audit. Once we have completed the audit, then at that point we would be able to discuss any questions and deal with any issues that you may have with the audit. The information that we have requested first dealt with the monthly revenue figures that you sent to us for each month [ ]. We then asked you if the revenue figures also included all of the different brands, and you sent us an email stating that they do include all of the brands. Currently, we are still needing the following information in order to proceed with the audit: We need you to reconcile the amounts for each brand for the month we specified for [the] city. We need to know if the data you are sending regarding billing sales includes the sales done by Walmart and other retailers. We need to know if you would be able to break out the interstate amounts for the long-distance charges. TRS 12-10-2020-071 We understand that TracFone may object to our conclusions as to the taxability of certain items, or even of the whole. But the ordinances require that companies open their books to auditors so that audits can be conducted according to the understanding of the city and its auditors. Once the audit is completed, that is the time during which the taxpayer has the right to object to the findings, rather than before the audit is completed. There will be time for such discussions once all of the issues are clearly delineated by the audit findings. Nicholas, we do very much appreciate the assistance you provide in helping us bring this audit to completion. Let us know if you have any questions. Thanks Nicholas. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Feb 19, 2016 at 1:39 PM Hi Nicholas, Hope all is going well. I also wanted to check and see how things are coming along with the information that we need for the audit. I know the [city is] concern about moving forward with the [audit]. Let us know if you have any questions concerning the information that we need. This included the reconciling of the information that you sent to us for one month for [the] city and for the other information listed below. Thanks Nicholas. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. icholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Wed, Mar 2, 2016 at 12:17 PM Hi Mike -- in connection with the City of Renton, Washington Telephone Utility Tax Audit, please find attached the customer transaction-level detail files for the June 2015 Sample Period for reconciliation purposes. The brands associated with the transactions are also shown in each of the attached files. TRS 12-10-2020-072 [ ] Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Tue, Mar 29, 2016 at 1:40 PM Hi Nicholas, Hope things are going well with you. I have been reviewing the information that you sent to us, and I have some initial questions that I would like to ask you: APPT Transactions Detail Report: What does these mean: "Redacted - No subpoena was received," "Billed Amt." and "X Amt." What is the difference between the X Amt. and the Billed Amt.? What is the tax amount and how did you calculate it? Billing Platform Transaction Detail Report: What is: OTAPURCH, Enrollment, Recurring, BN Enrollment What is the tax amount and how did you calculate it? Telephone Accessories Custom Transaction - Level Detail : We are assuming this is equipment and/or accessories sold to customers. [ ] We also notice that you have a brand called Page Plus. Are there sales happening for each brand in each city? If not, we will need to know why not. [ ] These are the initial questions that we have for you. TRS 12-10-2020-073 Let us know if you have any questions from us. Thanks Nicholas. Have a great day. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Apr 8, 2016 at 2:22 PM Hi Nicholas, Hope everything is going great for you. I also just waned to check and see how things are coming along with the email below and if you have any questions. Have a great weekend. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Tuesday, March 29, 2016 1:40 PM Subject: Initial questions on information sent to TRS Hi Nicholas, Hope things are going well with you. I have been reviewing the information that you sent to us, and I have some initial questions that I would like to ask you: APPT Transactions Detail Report: What does these mean: "Redacted - No subpoena was received," "Billed Amt." and "X Amt." What is the difference between the X Amt. and the Billed Amt.? TRS 12-10-2020-074 What is the tax amount and how did you calculate it? Billing Platform Transaction Detail Report: What is: OTAPURCH, Enrollment, Recurring, BN Enrollment What is the tax amount and how did you calculate it? Telephone Accessories Custom Transaction - Level Detail : We are assuming this is equipment and/or accessories sold to customers. [ ] We also notice that you have a brand called Page Plus. Are there sales happening for each brand in each city? If not, we will need to know why not. [ ] These are the initial questions that we have for you. Let us know if you have any questions from us. Thanks Nicholas. Have a great day. Mike TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Apr 21, 2016 at 3:03 PM Hi Nicholas, Just checking to see how things are coming along with our request below. Could you also let me know that you have received this email (see below)? If I don't receive anything back from you, I will try to telephone you next week. Thanks Nicholas. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> TRS 12-10-2020-075 Sent: Friday, April 8, 2016 2:22 PM Subject: Initial questions on information sent to TRS Hi Nicholas, Hope everything is going great for you. I also just waned to check and see how things are coming along with the email below and if you have any questions. Have a great weekend. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Tuesday, March 29, 2016 1:40 PM Subject: Initial questions on information sent to TRS Hi Nicholas, Hope things are going well with you. I have been reviewing the information that you sent to us, and I have some initial questions that I would like to ask you: APPT Transactions Detail Report: What does these mean: "Redacted - No subpoena was received," "Billed Amt." and "X Amt." What is the difference between the X Amt. and the Billed Amt.? What is the tax amount and how did you calculate it? Billing Platform Transaction Detail Report: What is: OTAPURCH, Enrollment, Recurring, BN Enrollment What is the tax amount and how did you calculate it? Telephone Accessories Custom Transaction - Level Detail : We are assuming this is equipment and/or accessories sold to customers. TRS 12-10-2020-076 [ ] We also notice that you have a brand called Page Plus. Are there sales happening for each brand in each city? If not, we will need to know why not. [ ] These are the initial questions that we have for you. Let us know if you have any questions from us. Thanks Nicholas. Have a great day. Mike Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Fri, Apr 22, 2016 at 12:04 PM Hi Mike – please see a series of my responses to your questions below in bold green font. I’m still working on the remaining as indicated below as well in red font. I have been reviewing the information that you sent to us, and I have some initial questions that I would like to ask you: APPT Transactions Detail Report: What does these mean: "Redacted - No subpoena was received," "Billed Amt." and "X Amt." "Redacted - No subpoena was received," -- pursuant to the Stored Communications Act (18 U.S.C. Sec. 2702), a holder, such as a telecommunications company, of a record or other information pertaining to a subscriber to or customer (customer name, address, telephone number, etc) cannot disclose this personal information to a governmental entity unless the governmental entity uses a subpoena or obtains a warrant, or court order. Therefore, I used the phrase -- "Redacted - No subpoena was received," -- since no subpoena was received in respect to [the city] under audit. What is the difference between the X Amt. and the Billed Amt.? X Amt. is the price that the customer was charged, whereas the Billed Amt. is the said price plus the taxes and fees shown in columns to the right of the Billed Amt. What is the tax amount and how did you calculate it? Price that the customer was charged (or X Amt.) multiplied by the applicable tax rate. TRS 12-10-2020-077 Billing Platform Transaction Detail Report: What is: OTAPURCH, Enrollment, Recurring, BN Enrollment Still working on. What is the tax amount and how did you calculate it? Price that the customer was charged (or X Amt.) multiplied by the applicable tax rate. Telephone Accessories Custom Transaction - Level Detail : We are assuming this is equipment and/or accessories sold to customers. Yes. [ ] These are the initial questions that we have for you. Nicholas E. Ford | Corporate Tax | Trac Fone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Apr 22, 2016 at 12:37 PM Thanks Nicholas. I will take a look at your email and will let you know if I have any questions. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Apr 29, 2016 at 12:44 PM Hi Nicholas, Hope things have been going well with you. After reviewing your chart of accounts, some questions came up. In your chart of accounts for revenues, we show that TracFone receives revenues for: TRS 12-10-2020-078 Chart account number Description 6102 Airtime Revenue 6112 Revenue - TF Service Protection 6113 Revenue - Monthly Program 6118 Revenue - Safelink Program 6202 BYOP Revenue 6303 Revenue - Other 6305 Revenue - ILD Cards 6306 Mobile Advertising Revenue Share 6308 Revenue - Advertising Could you give us an explanation of what these revenues are, and which are included in the revenue lists you sent to us, and which are not, and if they are not, could you explain why they are not included? Also, does TracFone receive their revenues for features such as call waiting sold to their customers, or are they part of the plan when you sell your cards? Let me know if you have any questions. In addition, let me know if you have any questions concerning my request on my email sent to you on March 29, 2016. Thanks Nicholas. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Mon, May 9, 2016 at 3:32 PM HI Nicholas, Hope all is well with you. I also just wanted to check and see how things are coming along with the email that I sent to you below. Let me know if you have any questions. Thanks Nicholas. Have a great afternoon. TRS 12-10-2020-079 Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Friday, April 29, 2016 12:44 PM Subject: TracFone questons Hi Nicholas, Hope things have been going well with you. After reviewing your chart of accounts, some questions came up. In your chart of accounts for revenues, we show that TracFone receives revenues for: Chart account number Description 6102 Airtime Revenue 6112 Revenue - TF Service Protection 6113 Revenue - Monthly Program 6118 Revenue - Safelink Program 6202 BYOP Revenue 6303 Revenue - Other 6305 Revenue - ILD Cards 6306 Mobile Advertising Revenue Share 6308 Revenue - Advertising Could you give us an explanation of what these revenues are, and which are included in the revenue lists you sent to us, and which are not, and if they are not, could you explain why they are not included? Also, does TracFone receive their revenues for features such as call waiting sold to their customers, or are they part of the plan when you sell your cards? Let me know if you have any questions. In addition, let me know if you have any questions concerning my request on my email sent to you on March 29, 2016. Thanks Nicholas. Have a great weekend. Mike TRS 12-10-2020-080 This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, May 19, 2016 at 3:40 PM Hi Nicholas, Just wanted to check and see how things are coming along with the information that we requested below. Let us know if you have any questions. Thanks Nicholas for all of your help. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Monday, May 9, 2016 3:32 PM Subject: TracFone questons HI Nicholas, Hope all is well with you. I also just wanted to check and see how things are coming along with the email that I sent to you below. Let me know if you have any questions. Thanks Nicholas. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> TRS 12-10-2020-081 Sent: Friday, April 29, 2016 12:44 PM Subject: TracFone questons Hi Nicholas, Hope things have been going well with you. After reviewing your chart of accounts, some questions came up. In your chart of accounts for revenues, we show that TracFone receives revenues for: Chart account number Description 6102 Airtime Revenue 6112 Revenue - TF Service Protection 6113 Revenue - Monthly Program 6118 Revenue - Safelink Program 6202 BYOP Revenue 6303 Revenue - Other 6305 Revenue - ILD Cards 6306 Mobile Advertising Revenue Share 6308 Revenue - Advertising Could you give us an explanation of what these revenues are, and which are included in the revenue lists you sent to us, and which are not, and if they are not, could you explain why they are not included? Also, does TracFone receive their revenues for features such as call waiting sold to their customers, or are they part of the plan when you sell your cards? Let me know if you have any questions. In addition, let me know if you have any questions concerning my request on my email sent to you on March 29, 2016. Thanks Nicholas. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, May 19, 2016 at 4:23 PM Hi Nicholas, TRS 12-10-2020-082 I forgot to mention to you about a question that we had emailed January 8, 2016 for which we did not receive a reply: Does the data you have sent to us regarding the billing sales include the sales done by Walmart and other retailers? Let us know if you have any questions. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Fri, May 20, 2016 at 10:40 AM Hi Mike – please see my response (inserted) to your question below. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. From: TRS [mailto:crisp@trs-integrity.com] Sent: Thursday, May 19, 2016 7:23 PM To: Nicholas Ford Subject: Question concerning the audit Hi Nicholas, I forgot to mention to you about a question that we had emailed January 8, 2016 for which we did not receive a reply: Does the data you have sent to us regarding the billing sales include the sales done by Walmart and other retailers? No, the data does not. Let us know if you have any questions. Thanks Nicholas. TRS 12-10-2020-083 Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, May 20, 2016 at 11:29 AM Thanks Nicholas for the answer. [ ] Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Tue, May 24, 2016 at 4:08 PM Hi Nicholas, Thanks again for your response. After thinking about it, we had some other questions. You mentioned below that the data that you provided to us does not include retailers such as Walmart. So the revenue figures that you sent to us are for your own stores? And if so, could you tell us the percentage of your revenues that come from your stores versus the revenues that come from other stores? And if the revenues you sent to us do not come from your stores, then could you tell us what they are for, specifically? Also, we wanted to check and see about the other email that we sent to you (on April 29 of this year) concerning other revenue items on your chart of accounts, and if you are receiving revenues for these items, and if they are included in the revenue figures that you sent to us. Let us know if you have any questions. Thanks Nicholas for all of your help. Have a great day. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be TRS 12-10-2020-084 prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com> Sent: Friday, May 20, 2016 10:40 AM Subject: RE: Question concerning the audit Hi Mike – please see my response (inserted) to your question below. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. From: TRS [mailto:crisp@trs-integrity.com] Sent: Thursday, May 19, 2016 7:23 PM To: Nicholas Ford Subject: Question concerning the audit Hi Nicholas, I forgot to mention to you about a question that we had emailed January 8, 2016 for which we did not receive a reply: Does the data you have sent to us regarding the billing sales include the sales done by Walmart and other retailers? No, the data does not. Let us know if you have any questions. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Wed, May 25, 2016 at 4:38 PM TRS 12-10-2020-085 Hi Nicholas, Hope all is well with you. Recharges on Sales Made by Outside Stores Such as Walmart: One more question we forgot to ask you: when you send us the revenue information that we asked about in the email below, could you also include the charges to customers who have continued to use your services (directly through your drawing funds from their credit card or bank account) after they bought a phone or calling card from one of your outside retailers (like Walmart)? We generally refer to these charges as "recharges." Or are these charges included in the figures you already sent? Recharges on Sales Made by TracFone's Own Stores: In addition, we will need to ascertain that all recharges done on accounts opened at your own stores are included somewhere in the information we are provided with, as well: are charges (associated with sales that initiated at one of your stores) for continued services which were completed by automatic withdrawals or telephone withdrawals included in the figures you sent to us? If not, we will need access to these numbers as well. Thanks Nicholas. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Wed, Jun 1, 2016 at 2:27 PM Hi Nicholas, Just wanted to check and see how things are coming along with the questions and and information that we requested below. Let me know if you have any questions. Thanks Nichols. Have a great afternoon. Mike TRS 12-10-2020-086 This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Wednesday, May 25, 2016 4:38 PM Subject: Question concerning the audit Hi Nicholas, Hope all is well with you. Recharges on Sales Made by Outside Stores Such as Walmart: One more question we forgot to ask you: when you send us the revenue information that we asked about in the email below, could you also include the charges to customers who have continued to use your services (directly through your drawing funds from their credit card or bank account) after they bought a phone or calling card from one of your outside retailers (like Walmart)? We generally refer to these charges as "recharges." Or are these charges included in the figures you already sent? Recharges on Sales Made by TracFone's Own Stores: In addition, we will need to ascertain that all recharges done on accounts opened at your own stores are included somewhere in the information we are provided with, as well: are charges (associated with sales that initiated at one of your stores) for continued services which were completed by automatic withdrawals or telephone withdrawals included in the figures you sent to us? If not, we will need access to these numbers as well. Thanks Nicholas. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Tuesday, May 24, 2016 4:08 PM Subject: Re: Question concerning the audit Hi Nicholas, TRS 12-10-2020-087 Thanks again for your response. After thinking about it, we had some other questions. You mentioned below that the data that you provided to us does not include retailers such as Walmart. So the revenue figures that you sent to us are for your own stores? And if so, could you tell us the percentage of your revenues that come from your stores versus the revenues that come from other stores? And if the revenues you sent to us do not come from your stores, then could you tell us what they are for, specifically? Also, we wanted to check and see about the other email that we sent to you (on April 29 of this year) concerning other revenue items on your chart of accounts, and if you are receiving revenues for these items, and if they are included in the revenue figures that you sent to us. Let us know if you have any questions. Thanks Nicholas for all of your help. Have a great day. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Thu, Jun 2, 2016 at 10:54 AM Hi Mike – we are in the midst of our month-end closing. I should be able to respond to at least a few of your outstanding questions next week. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Jun 2, 2016 at 1:04 PM TRS 12-10-2020-088 Thanks Nicholas. I do appreciate all of your help. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Jun 10, 2016 at 12:29 PM Hi Nicholas, Hope everything is going well. Also, just checking to see how things are coming along with the information that you told us you would send to us this week. Let us know if you have any questions. Thanks Nicholas. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Fri, Jun 17, 2016 at 8:34 AM Hi Mike – please see responses below to your questions. *Please note that I am still reviewing your questions related to TracFone’s chart of accounts.* Billing Platform Transaction Detail Report: What is?: •OTAPURCH -- ‘over the air’ purchase of prepaid wireless services (airtime) by a customer through the phone. TRS 12-10-2020-089 •Enrollment -- initial (one-time) enrollment of a customer when purchasing airtime. •Recurring -- using the Billing Platform, customers make a one-time purchase or enroll into programs available for recurring charges, most of which include airtime on a monthly (30 day) basis. •BN Enrollment – ‘Buy Now-Airtime on Demand’ enrollment’, which allows customers to choose and buy Airtime directly from their TracFone, so that they can buy Airtime when they need it. Also, does TracFone receive their revenues for features such as call waiting sold to their customers, or are they part of the plan when you sell your cards? No, TracFone does not receive revenues for call waiting. The feature is part of the airtime plan that customers purchase, thus it is not a separate charge. After thinking about it, we had some other questions. You mentioned below that the data that you provided to us does not include retailers such as Walmart. So the revenue figures that you sent to us are for your own stores? First off, TracFone is a reseller of prepaid wireless service (airtime) that neither owns any stores nor cellular facilities. It should also be noted that TracFone does not earn revenue [ ] Renton [ ]. As such, the Billing Platform, Internet Sales, and Telephone Sales excel format reports that you received comprise TracFone’s retail sales amounts. These amounts, which are all of the Company’s retail sales, are from customer purchases made via the internet (i.e., the TracFone’s website) and over the phone. Recharges on Sales Made by Outside Stores Such as Walmart: One more question we forgot to ask you: when you send us the revenue information that we asked about in the email below, could you also include the charges to customers who have continued to use your services (directly through your drawing funds from their credit card or bank account) after they bought a phone or calling card from one of your outside retailers (like Walmart)? We generally refer to these charges as "recharges." Or are these charges included in the figures you already sent? Refills of airtime that a customer can purchase at retail via the internet (i.e., the TracFone’s website), and over the phone. They are included in the Billing Platform and Internet Sales retail reports that you received. Recharges on Sales Made by TracFone's Own Stores: In addition, we will need to ascertain that all recharges done on accounts opened at your own stores are included somewhere in the information we are provided with, as well: are charges (associated with sales that initiated at one of your stores) for continued services which were completed by automatic withdrawals or telephone withdrawals included in the figures you sent to us? If not, we will need access to these numbers as well. See response to question above. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ TRS 12-10-2020-090 This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Jun 17, 2016 at 1:08 PM Thanks Nicholas for the email. We will review it and will get back with you if we have any questions. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <Crisp@trs-integrity.com> To:nford@tracfone.com Tue, Jun 21, 2016 at 2:00 PM Hi Nicholas, Thanks for the email, and all the clarification you provided. We do appreciate it. I was reviewing your answers to our questions below, and I noticed that you omitted one of the questions, the one asking for a percentage of revenues that come from other stores: ". . . could you tell us the percentage of your revenues that come from your stores versus the revenues that come from other stores?" Your answers below seem to indicate that both sales from other stores (which sales TracFone does not consider "retail"), and any recharges (or what TracFone calls "refills") associated with those sales, were not included in the figures you sent us. Please verify if this is the correct understanding. So could you send us the percentage breakout between your sales at your Website and by phone (which we believe you call retail) and your other sales (non-"retail," including refills or what we call recharges on the non-retail sales)? Also, let me know if you have any questions concerning the email that we sent to you on April 29th, concerning other revenues that TracFone receives. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be TRS 12-10-2020-091 prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com> Sent: Friday, June 17, 2016 8:34 AM Subject: RE: TracFone Audit Questions - Responses Hi Mike – please see responses below to your questions. *Please note that I am still reviewing your questions related to TracFone’s chart of accounts.* Billing Platform Transaction Detail Report: What is?: •OTAPURCH -- ‘over the air’ purchase of prepaid wireless services (airtime) by a customer through the phone. •Enrollment -- initial (one-time) enrollment of a customer when purchasing airtime. •Recurring -- using the Billing Platform, customers make a one-time purchase or enroll into programs available for recurring charges, most of which include airtime on a monthly (30 day) basis. •BN Enrollment – ‘Buy Now-Airtime on Demand’ enrollment’, which allows customers to choose and buy Airtime directly from their TracFone, so that they can buy Airtime when they need it. Also, does TracFone receive their revenues for features such as call waiting sold to their customers, or are they part of the plan when you sell your cards? No, TracFone does not receive revenues for call waiting. The feature is part of the airtime plan that customers purchase, thus it is not a separate charge. After thinking about it, we had some other questions. You mentioned below that the data that you provided to us does not include retailers such as Walmart. So the revenue figures that you sent to us are for your own stores? First off, TracFone is a reseller of prepaid wireless service (airtime) that neither owns any stores nor cellular facilities. It should also be noted that TracFone does not earn revenue in [ ] Renton [ ]. As such, the Billing Platform, Internet Sales, and Telephone Sales excel format reports that you received comprise TracFone’s retail sales amounts. These amounts, which are all of the Company’s retail sales, are from customer purchases made via the internet (i.e., the TracFone’s website) and over the phone. Recharges on Sales Made by Outside Stores Such as Walmart: One more question we forgot to ask you: when you send us the revenue information that we asked about in the email below, could you also include the charges to customers who have continued to use your services (directly through your drawing funds from their credit card or bank account) after they bought a phone or calling card from one of your outside retailers (like Walmart)? We generally refer to these charges as "recharges." Or are these charges included in the figures you already sent? Refills of airtime that a customer can purchase at retail via the internet (i.e., the TracFone’s website), and over the phone. They are included in the Billing Platform and Internet Sales retail reports that you received. TRS 12-10-2020-092 Recharges on Sales Made by TracFone's Own Stores: In addition, we will need to ascertain that all recharges done on accounts opened at your own stores are included somewhere in the information we are provided with, as well: are charges (associated with sales that initiated at one of your stores) for continued services which were completed by automatic withdrawals or telephone withdrawals included in the figures you sent to us? If not, we will need access to these numbers as well. See response to question above. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Fri, Jun 24, 2016 at 8:06 AM Hi Mike – please see my responses to your questions below inbold blue font. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. From: TRS [mailto:crisp@trs-integrity.com] Sent: Tuesday, June 21, 2016 5:01 PM To: Nicholas Ford Subject: Re: TracFone Audit Questions - Responses Hi Nicholas, Thanks for the email, and all the clarification you provided. We do appreciate it. I was reviewing your answers to our questions below, and I noticed that you omitted one of the questions, the one asking for a percentage of revenues that come from other stores: ". . . could you tell us the percentage of your revenues that come from your stores versus the revenues that come from other stores?" As indicated my original response, TracFone is a reseller of prepaid wireless service (airtime) that neither owns any stores nor cellular facilities. TRS 12-10-2020-093 Your answers below seem to indicate that both sales from other stores (which sales TracFone does not consider "retail"), and any recharges (or what TracFone calls "refills") associated with those sales, were not included in the figures you sent us. Please verify if this is the correct understanding. Not correct: TracFone does not own any stores. Refills are retail sales of airtime. As such, customers can purchase additional airtime (refills) via the internet (i.e., TracFone’s website), and over the phone. Refills are included in the Billing Platform and Internet Sales retail sales summary reports/figures that I had sent to you. So could you send us the percentage breakout between your sales at your Website and by phone (which we believe you call retail) and your other sales (non-"retail," including refills or what we call recharges on the non-retail sales)? Retail sales comprise roughly 30% of TracFone’s sales. Also, let me know if you have any questions concerning the email that we sent to you on April 29th, concerning other revenues that TracFone receives. Working on… Have a great afternoon. Mike TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Jun 24, 2016 at 1:34 PM Hi Nicholas, Thanks for your responses. After reviewing your reports again we want to make sure we understand what each report is showing, so could you review with us the definition for each report below: Platform report APPT report In other words, is the Billing Platform Report sales for website or phone sales or both? And the APPT report sales would be for? The sheets say "internet," but we want to ascertain if this means that they were sales made over the internet, not sales of internet (data plans). Perhaps all of your sales are made in bundles, without breaking out data from telephone services? TRS 12-10-2020-094 In addition, do you have any back-up information for the 30 percent figure for your retail sales verses non-retail sales? We were wondering, as well, if this percent changed significantly over time? Let us know, also, if you have any questions on the April 29 email. Thanks Nicholas. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Tue, Jun 28, 2016 at 12:25 PM Hi Mike – please see my responses below to your questions (per your 6/24 e-mail): (1) What is Internet (APP)? The Alternative Payment Plan (“APP”) is TracFone’s credit card transaction interface for retail sales. Under the APP, customers engage in one-time credit card based transactions via the internet or phone. APP based customer transactions are consummated predominantly via the internet. Furthermore, any TracFone plan program which is not available to be set up for an automated-recurring charge gets processed through APP. (2) What is Billing Platform? The Billing Platform (“BP”) is a supplement to the Alternative Payment Plan (“APP”) to provide a system for automated-recurring charges. Customers can make a one-time purchase or enroll into programs available for automated or recurring charges, most of which include airtime on a monthly (30 day) basis. Based on the above, both APP and Billing Platform are internet-based credit card transaction interfaces for executing TracFone’s customers’ retail purchases—except that Billing Platform provides for recurring charges whereas APP allows customers to engaged in one-time credit card transactions. TRS 12-10-2020-095 (3) Retail Sales Comprise Roughly 30% of TracFone’s sales. Below shows the breakdown for 2013 and 2014, for example. 2013 Direct Sales Amounts (Per Accum. Summary Reports for '13) Company-Wide 1,658,066,825 31% Retail Sales Perc Airtime Revenue (Per Financial Statements) Company-Wide 5,358,559,000 69% Wholesale Sales Percentage 2014 Direct Sales Amounts (Per Accum. Summary Reports for '14) Company-Wide 2,144,494,356 35% Retail Sales Perc Airtime Revenue (Per Financial Statements) Company-Wide 6,126,893,000 65% Wholesale Sales Percentage Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Tue, Jun 28, 2016 at 2:05 PM Thanks Nicholas. We will take a look at your email and will let you know if we have any questions. Let us know if you have any questions on the April 29th email we sent to you. Have a great afternoon. Mike TRS 12-10-2020-096 This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Jun 30, 2016 at 4:08 PM Hi Nicolas, Thanks for the information you sent. It is very helpful for us to understand the terminology used inside your company. Regarding the calculations you sent us to back up the 30%, this is a good start, but we do have a few further questions. 1) If all of the Direct Sales Amount is "retail," and all of the Airtime Revenue is "wholesale," then, to find what percentage of total sales are Direct Sales, it looks like to me that we should add Direct and Airtime and divide Direct by the sum. Using this method, we arrive at 23.6% and 25.9%. 2) You are dividing two numbers, one is the Direct Sales Amount, and the other is the Airtime Revenue. We were wondering: are you dividing two things that are similar enough to compare? It seems that Direct Sales would include more than just airtime revenue, probably including handset sales and internet? So could you give a definition of each one, including what components they contain? 3) We were looking at the monthly reports you sent a while back, and the amounts from earlier years were so very much smaller than the amounts for more current years, yet company profits appeared high. Has the percentage of sales (comparing ones made without using another retailer to ones being done directly by TracFone) changed significantly over the years? At this point, it looks like we will need to see the figures used for calculating the percentages for each year, rather than just for a few recent years. Could you send us this information? Also, let us know if you have any questions concerning the April 29th email that we sent to you. Thanks Nichols for all of your help. Have a great 4th of July weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Jul 8, 2016 at 2:01 PM Hi Nicholas, TRS 12-10-2020-097 Hope everything is going great for you. Also, wanted to check and see how things are coming along with the email below and if you have any questions. Thanks Nicholas. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Thursday, June 30, 2016 4:08 PM Subject: Re: TracFone Audit Questions - Responses Hi Nicolas, Thanks for the information you sent. It is very helpful for us to understand the terminology used inside your company. Regarding the calculations you sent us to back up the 30%, this is a good start, but we do have a few further questions. 1) If all of the Direct Sales Amount is "retail," and all of the Airtime Revenue is "wholesale," then, to find what percentage of total sales are Direct Sales, it looks like to me that we should add Direct and Airtime and divide Direct by the sum. Using this method, we arrive at 23.6% and 25.9%. 2) You are dividing two numbers, one is the Direct Sales Amount, and the other is the Airtime Revenue. We were wondering: are you dividing two things that are similar enough to compare? It seems that Direct Sales would include more than just airtime revenue, probably including handset sales and internet? So could you give a definition of each one, including what components they contain? 3) We were looking at the monthly reports you sent a while back, and the amounts from earlier years were so very much smaller than the amounts for more current years, yet company profits appeared high. Has the percentage of sales (comparing ones made without using another retailer to ones being done directly by TracFone) changed significantly over the years? At this point, it looks like we will need to see the figures used for calculating the percentages for each year, rather than just for a few recent years. Could you send us this information? Also, let us know if you have any questions concerning the April 29th email that we sent to you. Thanks Nichols for all of your help. TRS 12-10-2020-098 Have a great 4th of July weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Crisp@trs-integrity.com> To:nford@tracfone.com Tue, Jul 12, 2016 at 2:08 PM Hi Nicholas, Looking at our June 30 email below, we noticed that we made a typo of sorts. In item (3), we put the word "without," when we actually meant "with." Hopefully, from context, you caught our intended meaning and have been framing your reply accordingly, but just in case, we wanted to clarify. Let us know if you have any questions. Have a great day. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Tue, Jul 19, 2016 at 2:40 PM Hi Mike – just a heads up that I’ve been working on your questions, however the Head of Tax and myself will be out of the office the rest of this week until Monday. As such, I’d aim to get feedback to you sometime next week. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com TRS 12-10-2020-099 Wed, Jul 20, 2016 at 11:55 AM Thanks Nicholas. That sounds good. Have a great day. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Jul 28, 2016 at 5:00 PM Hi Nicholas, Hope all is well with you. I also wanted to check and see how things are coming along with the information that we requested for the audit. Let us know if you have any questions. Thanks Nicholas. Have a great day. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Aug 4, 2016 at 3:01 PM Hi Nicholas, Just checking to see how things are coming along with the information that we requested on June 30th and April 29th. Let us know if you have any questions. TRS 12-10-2020-100 Thanks Nicholas. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Fri, Aug 5, 2016 at 7:39 AM Hi Mike – we’re just wrapping up our month end closing. I had prepared a draft of responses to your questions and will circle back to my contact today, who was reviewing. Thanks for your patience, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Aug 5, 2016 at 12:35 PM Thanks Nicholas. That sounds great. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Wed, Aug 17, 2016 at 11:12 AM TRS 12-10-2020-101 Hi Mike – please see below responses regarding your chart of accounts related questions. Please be aware that I should have feedback related to your questions on the retail sales, wholesale sales and airtime revenue (where I had sent you some roughly estimated percentage amounts) next week sometime. Account Number(s) Description 6102 Airtime Revenue Sales of prepaid wireless service (airtime) of voice, data (internet), and texting under the “Pay as you go” or “PayGo” Airtime coverage, whereby minutes and days of service can be added as according to a customer’s needs. Includes retail and wholesale sales (to retailers). 6112 Revenue - TF Service Protection Sales of TF service protection plans, whereby customers can enroll and protect their service by receiving a 30-day service only extension if needed and add any airtime cards or minutes. 6113 Revenue - Monthly Program Sales of prepaid wireless service (airtime) of voice, data (internet), and texting under the monthly plans program. For example, monthly plans of varying periods—of up to one year—are offered. 6118 Revenue - Safelink Program The Lifeline service (“Safelink”) is a program that enables low-income households to afford phone service. In the Safelink (Lifeline) Program, TracFone gives airtime (minutes) service free-of- charge to eligible, low-income participants. In turn, TracFone receives payments, which are reimbursements by USAC for TracFone’s participation in the Safelink program. 6202 BYOP Revenue Sales of TracFone BYOP packages, which include the BYOP SIM card. BYOP stands for Bring Your Own Phone. With TracFone's Bring Your Own Phone program, a customer can get TracFone service on their current phone. 6303 Revenue – Other TRS 12-10-2020-102 Miscellaneous Revenue not related to operating activity. 6305 Revenue - ILD Cards Sales of international long distance (“ILD”) prepaid wireless service (airtime) of voice, data (internet), and texting. ILD makes it easy for wireless customers to make international calls. 6306 Mobile Advertising Revenue Share Tracfone owns an inventory of “spaces” that its sells to ad networks (ad resellers). TracFone’s subscribers will see ads from several companies in apps, and then the ad networks will pay Tracfone for the use of these “spaces”. 6308 Revenue - Advertising See 6306 above. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS<crisp@trs-integrity.com> To:nford@tracfone.com Wed, Aug 17, 2016 at 2:01 PM Thanks Nicholas. We will review the information that you sent to us and we will let you know if we have any questions. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS@trs-integrity.com> To:nford@tracfone.com Wed, Aug 24, 2016 at 2:41 PM TRS 12-10-2020-103 Hi Nicholas, Just checking to see how things are coming along with the question concerning the retail sales and wholesale sales. Let us know if you have any questions. We are also reviewing the definition of different revenues for your company that you sent to us and will let you know if we have any questions. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Fri, Aug 26, 2016 at 10:35 AM Hi Mike – in regard to your remaining questions, please see responses below. As far as I can tell, in providing the information below there are no outstanding questions and/or requests for other information. Assuming that’s the case, we are asking once again for an opportunity to meet with you—as we also requested in December 2014 to meet in January 2015—and discuss your WA local/city [audit] with the aim of bringing [it] to a resolution. If you would, please provide some timeframes in the near future that would be convenient for you for purposes of sitting down with us to discuss your [audit]. For example, October 2016 would work for us, with the exception of October 6th. 1) Your Question: If all of the Direct Sales Amount is "retail," and all of the Airtime Revenue is "wholesale," then, to find what percentage of total sales are Direct Sales, it looks like to me that we should add Direct and Airtime and divide Direct by the sum. Using this method, we arrive at 23.6% and 25.9%.  Response: The roughly 30% (retail-direct) sales compared to the roughly 70% wholesale was just that—an estimate. It was also based on the whole company as opposed to a particular state or city. The net airtime revenue (per financial statements) denominator includes not only retail sales, but also wholesale sales. 2) Your Question: You are dividing two numbers, one is the Direct Sales Amount, and the other is the Airtime Revenue. We were wondering: are you dividing two things that are similar enough to compare? It seems that Direct Sales would include more than just airtime revenue, probably including handset sales and internet? So could you give a definition of each one, including what components they contain? Response: In addition to the net airtime revenue (per financial statements) denominator, the grid below now shows a separate break-out of sales of phones & accessories sales. The retail sales amounts (numerator) that were provided to you also include both phones & accessories sales and internet. TRS 12-10-2020-104 3) Your Question: We were looking at the monthly reports you sent a while back, and the amounts from earlier years were so very much smaller than the amounts for more current years, yet company profits appeared high. Has the percentage of sales (comparing ones made without using another retailer to ones being done directly by TracFone) changed significantly over the years? At this point, it looks like we will need to see the figures used for calculating the percentages for each year, rather than just for a few recent years. Could you send us this information? Response: See information in schedule grid below, which serves as a basis for the estimated wholesale percentages shown. 2010 (1) Retail (Direct) Sales Amounts (Airtime & Phones) Company-Wide 486,626,850 17% Retail Sales (2) Net Airtime Revenue (Per Financial Statements) 2,457,761,508 (3) Net Phones & Accessories Revenue (Per Financial Statements) 341,243,351 Total (2) + (3): 2,799,004,859 Company-Wide 1 minus Retail Percentage = 83% Wholesa Perce 2011 (1) Retail (Direct) Sales Amounts (Airtime & Phones) Company-Wide 793,674,906 21% Retail Sales (2) Net Airtime Revenue (Per Financial Statements) 3,433,624,000 (3) Net Phones & Accessories Revenue (Per Financial Statements) 380,952,000 Total (2) + (3): 3,814,576,000 Company-Wide 1 - Retail Percentage = 79% Wholesa Perce 2012 (1) Retail (Direct) Sales Amounts (Airtime & Phones) Company-Wide 1,164,915,001 24% Retail Sales (2) Net Airtime Revenue (Per Financial Statements) 4,291,440,000 (3) Net Phones & Accessories Revenue (Per Financial Statements) 502,534,000 Total (2) + (3): 4,793,974,000 TRS 12-10-2020-105 Company-Wide 1 - Retail Percentage = 76% Wholesa Perce 2013 (1) Retail (Direct) Sales Amounts (Airtime & Phones) Company-Wide 1,658,066,825 27% Retail Sales (2) Net Airtime Revenue (Per Financial Statements) 5,358,599,000 (3) Net Phones & Accessories Revenue (Per Financial Statements) 676,091,000 Total (2) + (3): 6,034,690,000 Company-Wide 1 - Retail Percentage = 73% Wholesa Perce 2014 (1) Retail (Direct) Sales Amounts (Airtime & Phones) Company-Wide 2,144,494,356 31% Retail Sales (2) Net Airtime Revenue (Per Financial Statements) 6,126,893,000 (3) Net Phones & Accessories Revenue (Per Financial Statements) 694,099,000 Total (2) + (3): 6,820,992,000 Company-Wide 1 - Retail Percentage = 69% Wholesa Perce 2015 (1) Retail (Direct) Sales Amounts (Airtime & Phones) Company-Wide 2,330,936,554 33% Retail Sales (2) Net Airtime Revenue (Per Financial Statements) 6,279,204,000 (3) Net Phones & Accessories Revenue (Per Financial Statements) 699,462,000 Total (2) + (3): 6,978,666,000 Company-Wide 1 - Retail Percentage = 67% Wholesa Perce 4) Your Question: We need to know if you would be able to break out the interstate amounts for the long-distance charges. Response: we have the ability to identify interstate amounts for total calling activity. TRS 12-10-2020-106 Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS<crisp@trs-integrity.com> To:nford@tracfone.com Fri, Aug 26, 2016 at 4:09 PM Thanks Nicholas for the information. We will review it and will let you know if we have any questions. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Wed, Aug 31, 2016 at 1:15 PM Hi Nicholas, [ ] Also, how things are coming along with the question concerning the retail sales and wholesale sales. Let us know if you have any questions. Thanks Nicholas. Have a great afternoon. Mike TRS 12-10-2020-107 This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford nford@tracfone.com> To:crisp@trs-integrity.com Wed, Aug 31, 2016 at 1:25 PM Hi Mike – concerning the retail and wholesale sales questions, please see my 8/26/16 reply e-mail. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Wed, Aug 31, 2016 at 1:26 PM Hi Nicholas, I forgot about the August 26th email you sent to us concerning retail and wholesale sales. So no need to send an email concerning these sales. We will let you know if we have any questions. Thanks, Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <Crisp@trs-integrity.com> To:nford@tracfone.com Wed, Sep 7, 2016 at 1:48 PM Hi Nicholas, Hope you had a great holiday weekend. Thanks for all of the information sent August 26. After studying the figures, we have some questions. In the schedule grid below, and in your explanation, are we correct in understanding that the 'retail direct' figures contain phone and accessory revenue, but since these cannot be broken out (or can TRS 12-10-2020-108 they?), and since the net airtime revenue did not contain phones and accessories, you found the total phone and accessory revenue and added that into the net airtime figures, then you used this sum to come up with the percentages? If so, this is very helpful. Now, looking at the chart you sent to us on August 17 (copied below), I am wondering how close we have come in comparing like figures to come up with percentages. Which of the revenue code categories below are included in the the Airtime revenue values you sent August 26th? And which are included in the Retail Direct revenue values sent August 26th? I know the retail direct section is labeled "airtime and phones," but, for example, there is airtime in the monthly program, but only Category 6102 is named "Airtime Revenue." 6102 Airtime Revenue  Sales of prepaid wireless service (airtime) of voice, data (internet), and texting under the “Pay as you go” or “PayGo” Airtime coverage, whereby minutes and days of service can be added as according to a customer’s needs. Includes retail and wholesale sales (to retailers). 6112 Revenue - TF Service Protection  Sales of TF service protection plans, whereby customers can enroll and protect their service by receiving a 30-day service only extension if needed and add any airtime cards or minutes. 6113 Revenue - Monthly Program  Sales of prepaid wireless service (airtime) of voice, data (internet), and texting under the monthly plans program. For example, monthly plans of varying periods—of up to one year—are offered. 6118 Revenue - Safelink Program  The Lifeline service (“Safelink”) is a program that enables low-income households to afford phone service. In the Safelink (Lifeline) Program, TracFone gives airtime (minutes) service free-of-charge to eligible, low-income participants. In turn, TracFone receives payments, which are reimbursements by USAC for TracFone’s participation in the Safelink program. 6202 BYOP Revenue TRS 12-10-2020-109  Sales of TracFone BYOP packages, which include the BYOP SIM card. BYOP stands for Bring Your Own Phone. With TracFone's Bring Your Own Phone program, a customer can get TracFone service on their current phone. 6303 Revenue – Other  Miscellaneous Revenue not related to operating activity. 6305 Revenue - ILD Cards  Sales of international long distance (“ILD”) prepaid wireless service (airtime) of voice, data (internet), and texting. ILD makes it easy for wireless customers to make international calls. 6306 Mobile Advertising Revenue Share  Tracfone owns an inventory of “spaces” that its sells to ad networks (ad resellers). TracFone’s subscribers will see ads from several companies in apps, and then the ad networks will pay Tracfone for the use of these “spaces”. 6308 Revenue - Advertising  See 6306 above. Also, you stated that you have the ability to break out the interstate information. At what level(s) can you do this, city, state, national or company-wide? Thanks Nicolas. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com TRS 12-10-2020-110 Wed, Sep 7, 2016 at 2:09 PM Hello Mike – I’ll be out of the office beginning tomorrow (9/8) and returning on Monday (9/12), at which time I can take a closer look at your questions below. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:nford@tracfone.com Wed, Sep 7, 2016 at 2:13 PM Thanks Nicholas. That sounds great. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:Nicholas Ford Fri, Sep 23, 2016 at 1:53 PM Hi Nichols, Just checking to see if you have had a chance to take a look at our questions below. Thanks Nicholas. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Forwarded Message ----- From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com> TRS 12-10-2020-111 Sent: Wednesday, September 7, 2016 2:09 PM Subject: RE: TracFone Audit Questions - Responses Hello Mike – I’ll be out of the office beginning tomorrow (9/8) and returning on Monday (9/12), at which time I can take a closer look at your questions below. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. From: TRS [mailto:crisp@trs-integrity.com] Sent: Wednesday, September 07, 2016 4:49 PM To: Nicholas Ford Subject: Re: TracFone Audit Questions - Responses Hi Nicholas, Hope you had a great holiday weekend. Thanks for all of the information sent August 26. After studying the figures, we have some questions. In the schedule grid below, and in your explanation, are we correct in understanding that the 'retail direct' figures contain phone and accessory revenue, but since these cannot be broken out (or can they?), and since the net airtime revenue did not contain phones and accessories, you found the total phone and accessory revenue and added that into the net airtime figures, then you used this sum to come up with the percentages? If so, this is very helpful. Now, looking at the chart you sent to us on August 17 (copied below), I am wondering how close we have come in comparing like figures to come up with percentages. Which of the revenue code categories below are included in the the Airtime revenue values you sent August 26th? And which are included in the Retail Direct revenue values sent August 26th? I know the retail direct section is labeled "airtime and phones," but, for example, there is airtime in the monthly program, but only Category 6102 is named "Airtime Revenue." 6102 Airtime Revenue  Sales of prepaid wireless service (airtime) of voice, data (internet), and texting under the “Pay as you go” or “PayGo” Airtime coverage, whereby minutes and TRS 12-10-2020-112 days of service can be added as according to a customer’s needs. Includes retail and wholesale sales (to retailers). 6112 Revenue - TF Service Protection  Sales of TF service protection plans, whereby customers can enroll and protect their service by receiving a 30-day service only extension if needed and add any airtime cards or minutes. 6113 Revenue - Monthly Program  Sales of prepaid wireless service (airtime) of voice, data (internet), and texting under the monthly plans program. For example, monthly plans of varying periods—of up to one year—are offered. 6118 Revenue - Safelink Program  The Lifeline service (“Safelink”) is a program that enables low-income households to afford phone service. In the Safelink (Lifeline) Program, TracFone gives airtime (minutes) service free-of-charge to eligible, low-income participants. In turn, TracFone receives payments, which are reimbursements by USAC for TracFone’s participation in the Safelink program. 6202 BYOP Revenue  Sales of TracFone BYOP packages, which include the BYOP SIM card. BYOP stands for Bring Your Own Phone. With TracFone's Bring Your Own Phone program, a customer can get TracFone service on their current phone. 6303 Revenue – Other  Miscellaneous Revenue not related to operating activity. 6305 Revenue - ILD Cards  Sales of international long distance (“ILD”) prepaid wireless service (airtime) of voice, data (internet), and texting. ILD makes it easy for wireless customers to make international calls. 6306 Mobile Advertising Revenue Share  Tracfone owns an inventory of “spaces” that its sells to ad networks (ad resellers). TracFone’s subscribers will see ads from several companies in apps, and then the ad networks will pay Tracfone for the use of these “spaces”. TRS 12-10-2020-113 6308 Revenue - Advertising  See 6306 above. Also, you stated that you have the ability to break out the interstate information. At what level(s) can you do this, city, state, national or company-wide? Thanks Nicolas. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Mon, Oct 10, 2016 at 12:12 PM Hi Mike – please see responses inserted below in blue font. After studying the figures, we have some questions. In the schedule grid below, and in your explanation, are we correct in understanding that the 'retail direct' figures contain phone and accessory revenue, but since these cannot be broken out (or can they?), Yes, the retail direct figures in the schedule grid below include phones and accessories sales and yes those sales can be broken out. and since the net airtime revenue did not contain phones and accessories, you found the total phone and accessory revenue and added that into the net airtime figures, then you used this sum to come up with the percentages? Yes . If so, this is very helpful. Now, looking at the chart you sent to us on August 17 (copied below), I am wondering how close we have come in comparing like figures to come up with percentages. Which of the revenue code categories below are included in the the Airtime revenue values you sent August 26th? And which are included in the Retail Direct revenue values sent August 26th? See table grid below. I know the retail direct section is labeled "airtime and phones," but, for example, there is airtime in the monthly program, but only Category 6102 is named "Airtime Revenue." See table grid below. Account Included in Net AirtimeRevenue Figures? Included in Retail Sales Amounts? TRS 12-10-2020-114 6102 – Airtime Revenue Yes Yes 6112 – Revenue – TF Service Protection Yes Yes 6113 – Revenue – Monthly Program Yes Yes 6118 – Revenue – Safelink Program Yes No 6202 – BYOP Revenue Yes Yes 6303 – Revenue – Other No No 6305 – Revenue – ILD Cards Yes Yes 6306 – Mobile Advertising Revenue Share No No 6308 – Revenue – Advertising No No Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:Nicholas Ford Mon, Oct 10, 2016 at 12:23 PMHi Nicholas, Thanks for the information. We will let you know if we have any questions. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS 12-10-2020-115 RS <crisp@trs-integrity.com> To:Nicholas Ford Mon, Oct 17, 2016 at 2:12 PM Hi Nicholas, Thanks for the chart below. Assuming that the answers you provided are for the company-wide date figures, it does look as though we are pretty much comparing like numbers; we know the Safelink program represents a tiny proportion of revenues, and other than that, the figures contain the same elements. But here are some outstanding questions: -You told us in an earlier email that phones could be broken out of the conglomerate numbers you sent. Why did you add phones in one rather than removing them from the other? How difficult would that be to convert these to non-accessary numbers? That would be a bit more accurate, but for estimation purposes, we could also assume that the percentages would be the same for both. -Have you any more information on how to break out intrastate and interstate calls? -Can you verify for us that the answers in the chart below (October 10) refer to the company-wide figures supplied to us on August 26th? Thanks, Nicholas. We really appreciate all your work on this. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com> Sent: Monday, October 10, 2016 12:12 PM Subject: RE: TracFone Audit Questions Hi Mike – please see responses inserted below in blue font. After studying the figures, we have some questions. In the schedule grid below, and in your explanation, are we correct in understanding that the 'retail direct' figures contain phone and accessory revenue, but since these cannot be broken out (or can they?), Yes, the retail direct figures in the schedule grid below include phones and accessories sales and yes those sales can be broken out. and since the net airtime revenue did not contain phones and accessories, you found the total phone and accessory revenue and added that into the net airtime figures, then you used this sum to come up with the percentages? Yes. TRS 12-10-2020-116 If so, this is very helpful. Now, looking at the chart you sent to us on August 17 (copied below), I am wondering how close we have come in comparing like figures to come up with percentages. Which of the revenue code categories below are included in the the Airtime revenue values you sent August 26th? And which are included in the Retail Direct revenue values sent August 26th? See table grid below. I know the retail direct section is labeled "airtime and phones," but, for example, there is airtime in the monthly program, but only Category 6102 is named "Airtime Revenue." See table grid below. Account Included in Net AirtimeRevenue Figures? Included in Retail Sales Amounts? 6102 – Airtime Revenue Yes Yes 6112 – Revenue – TF Service Protection Yes Yes 6113 – Revenue – Monthly Program Yes Yes 6118 – Revenue – Safelink Program Yes No 6202 – BYOP Revenue Yes Yes 6303 – Revenue – Other No No 6305 – Revenue – ILD Cards Yes Yes 6306 – Mobile Advertising Revenue Share No No 6308 – Revenue – Advertising No No Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:Nicholas Ford Fri, Oct 28, 2016 at 5:14 PM Hi Nicholas, Just checking to see if you have had a chance to look at the email below. Let us know if you have any questions. TRS 12-10-2020-117 Thanks Nicholas. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Tue, Nov 1, 2016 at 3:04 PM Hi Mike – in aiming to more efficiently bring your ongoing tax [audit] of TracFone to a [ ] resolution, we need to have a meeting as per our several previous requests. We would be glad to respond in- person to all of your questions, including your most recent set contained in your 10/17/2016 e-mail to us as shown below. Please advise accordingly. Regards, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. From: TRS [mailto:crisp@trs-integrity.com] Sent: Friday, October 28, 2016 8:14 PM To: Nicholas Ford Subject: TracFone Audit Questions Hi Nicholas, Just checking to see if you have had a chance to look at the email below. Let us know if you have any questions. Thanks Nicholas. TRS 12-10-2020-118 Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Monday, October 17, 2016 2:12 PM Subject: Re: TracFone Audit Questions Hi Nicholas, Thanks for the chart below. Assuming that the answers you provided are for the company-wide date figures, it does look as though we are pretty much comparing like numbers; we know the Safelink program represents a tiny proportion of revenues, and other than that, the figures contain the same elements. But here are some outstanding questions: -You told us in an earlier email that phones could be broken out of the conglomerate numbers you sent. Why did you add phones in one rather than removing them from the other? How difficult would that be to convert these to non-accessary numbers? That would be a bit more accurate, but for estimation purposes, we could also assume that the percentages would be the same for both. -Have you any more information on how to break out intrastate and interstate calls? -Can you verify for us that the answers in the chart below (October 10) refer to the company-wide figures supplied to us on August 26th? Thanks, Nicholas. We really appreciate all your work on this. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <Crisp@TRS-integrity.com> To:Nicholas Ford Wed, Nov 2, 2016 at 2:24 PM Hi Nicolas, We do understand that you would like to meet with us, but as we mentioned in the past, we would need to complete the audit first and then we could talk about meeting with your attorney and with legal representatives from the [city]. As you know, the city statutes require TRS 12-10-2020-119 that you open your books for tax audits, and we simply just want to first obtain the rest of the information that we need to complete the audit. We are down to just the three questions on the email below. Are there any of them that you will be unable to answer? Please send us whatever answers you can. -We are sure that you can answer the one asking if you can verify for us that the answers in the chart below (October 10) refer to the company-wide figures supplied to us on August 26th. -If you don't want to explain why you added phones to one amount rather than subtracted phones from the other, we can certainly estimate this with the numbers you sent. -Regarding the first question, if you choose not to provide information on breakout of intrastate and interstate, since bundles are taxable when not broken out in the regular course of business, we can just go ahead and do the audit without this information. One more question is also outstanding. We had thought, earlier in the audit, that your company was breaking out your data-related revenues because of the data you sent titled "internet." Now we realize that this amount was actually revenue figures for sales made by your company online, not data service. So it would be great if we could get percentages from you regarding data sold to customers, so that this may be factored into our estimate. If you can let us know if you intend to answer these questions, we will know whether to continue to wait on your answers or if we should move forward with the audit. We hope everything has been going well with you. Thanks Nicolas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Fri, Nov 4, 2016 at 1:51 PMHi Mike – I do intend to answer your questions and hope to complete my review of them some time next week. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. crisp@trs-integrity.com> TRS 12-10-2020-120 To:Nicholas Ford Fri, Nov 4, 2016 at 2:11 PM Thanks Nicholas. That sounds great. We really appreciate all of you help with this audit. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. <crisp@trs-integrity.com> To:Nicholas Ford Tue, Nov 15, 2016 at 12:23 PM HI Nicholas, Just checking to see how things are coming along with the questions below (11/2). Let us know if you have any questions. Thanks Nicholas. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Friday, November 4, 2016 2:11 PM Subject: Re: TracFone Audit Questions Thanks Nicholas. That sounds great. We really appreciate all of you help with this audit. Have a great weekend. Mike TRS 12-10-2020-121 This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com> Sent: Friday, November 4, 2016 1:51 PM Subject: RE: TracFone Audit Questions Hi Mike – I do intend to answer your questions and hope to complete my review of them some time next week. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. From: TRS [mailto:crisp@trs-integrity.com] Sent: Wednesday, November 02, 2016 5:24 PM To: Nicholas Ford Subject: Re: TracFone Audit Questions Hi Nicolas, We do understand that you would like to meet with us, but as we mentioned in the past, we would need to complete the audit first and then we could talk about meeting with your attorney and with legal representatives from the [city]. As you know, the city statutes require that you open your books for tax audits, and we simply just want to first obtain the rest of the information that we need to complete the audit. We are down to just the three questions on the email below. Are there any of them that you will be unable to answer? Please send us whatever answers you can. TRS 12-10-2020-122 -We are sure that you can answer the one asking if you can verify for us that the answers in the chart below (October 10) refer to the company-wide figures supplied to us on August 26th. -If you don't want to explain why you added phones to one amount rather than subtracted phones from the other, we can certainly estimate this with the numbers you sent. -Regarding the first question, if you choose not to provide information on breakout of intrastate and interstate, since bundles are taxable when not broken out in the regular course of business, we can just go ahead and do the audit without this information. One more question is also outstanding. We had thought, earlier in the audit, that your company was breaking out your data-related revenues because of the data you sent titled "internet." Now we realize that this amount was actually revenue figures for sales made by your company online, not data service. So it would be great if we could get percentages from you regarding data sold to customers, so that this may be factored into our estimate. If you can let us know if you intend to answer these questions, we will know whether to continue to wait on your answers or if we should move forward with the audit. We hope everything has been going well with you. Thanks Nicolas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Wed, Nov 16, 2016 at 10:51 AM Hi Mike – in regard to your outstanding questions, I had actually answered them on October 10, 2016 via a reply e-mail. I’m copying and pasting them, along with my previously stated responses, below for your convenience: Your Comment/Question: In the schedule grid below, and in your explanation, are we correct in understanding that the 'retail direct' figures contain phone and accessory revenue, but since these cannot be broken out (or can they?), My response: Yes, the retail direct figures in the schedule grid below include phones and accessories sales and yes those sales can be broken out. and since the net airtime revenue did not contain phones and accessories, you found the total phone and accessory revenue and added that into the net airtime figures, then you used this sum to come up with the percentages? My response: Yes. Your Comment/Question: If so, this is very helpful. Now, looking at the chart you sent to us on August 17 (copied below), I am wondering how close we have come in comparing like figures to come up with percentages. Which of the revenue code categories below are included in the the Airtime revenue values you sent August 26th? And which are included in the Retail Direct revenue TRS 12-10-2020-123 values sent August 26th? My response: See table grid below. I know the retail direct section is labeled "airtime and phones," but, for example, there is airtime in the monthly program, but only Category 6102 is named "Airtime Revenue." My response: See table grid below. Account Included in Net AirtimeRevenue Figures? Included in Retail Sales Amounts? 6102 – Airtime Revenue Yes Yes 6112 – Revenue – TF Service Protection Yes Yes 6113 – Revenue – Monthly Program Yes Yes 6118 – Revenue – Safelink Program Yes No 6202 – BYOP Revenue Yes Yes 6303 – Revenue – Other No No 6305 – Revenue – ILD Cards Yes Yes 6306 – Mobile Advertising Revenue Share No No 6308 – Revenue – Advertising No No Your Added Comment/Question from 11/2/16: If you don't want to explain why you added phones to one amount rather than subtracted phones from the other, we can certainly estimate this with the numbers you sent. My response: in hindsight, I could have subtracted but added instead. Your Added Comment/Question from 11/2/16: Regarding the first question, if you choose not to provide information on breakout of intrastate and interstate, since bundles are taxable when not broken out in the regular course of business, we can just go ahead and do the audit without this information. I am working on this item and expect to have the breakout data for you soon. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS 12-10-2020-124 TRS <crisp@trs-integrity.com> To:Nicholas Ford Wed, Nov 16, 2016 at 12:41 PM Hi Philip (sic), Thanks for the information. We will let you know if we have any questions. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:Nicholas Ford Wed, Nov 16, 2016 at 1:43 PM Hi Nicholas, Thanks again for sending us the email. So regarding your answers, we will try to extract what you mean on the questions we sent most recently, and put our best understanding of your answers in bold: -We are sure that you can answer the one asking if you can verify for us that the answers in the chart below (October 10) refer to the company-wide figures supplied to us on August 26th. So we understand that you are saying that the chart does refer to company-wide figures. -If you don't want to explain why you added phones to one amount rather than subtracted phones from the other, we can certainly estimate this with the numbers you sent. Here, we understand that you would be as okay with us using the accessory-inclusive numbers as the not accessory-inclusive numbers for our estimate. -Regarding the first question, if you choose not to provide information on breakout of intrastate and interstate, since bundles are taxable when not broken out in the regular course of business, we can just go ahead and do the audit without this information. Your data is still coming on this one. One more question is also outstanding. We had thought, earlier in the audit, that your company was breaking out your data-related revenues because of the data you sent titled "internet." Now we realize that this amount was actually revenue figures for sales made by your company online, not data service. TRS 12-10-2020-125 So it would be great if we could get percentages from you regarding data sold to customers, so that this may be factored into our estimate. You have not responded to this one. You did not say, but we assume that your data is still coming on this one, as well. So Nicholas, if you do not dispute our answers in these understandings in bold above, then we will take that as a positive agreement on each item above for which you did not send us a correction. This is a complicated audit, and we do appreciate all the work you are doing to help move this forward. We are looking forward to your data on the last two items. Have a great day. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Wed, Nov 16, 2016 at 2:04 PM Hi Mike – for purposes of your estimate calculation, the accessory-inclusive numbers should not be used, with the logic being that such accessories are not subject to tax under the utility tax statutes of the WA [city] under audit. As such, the accessory-exclusive number should be used. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <Crisp@trs-integrity.com> To:Nicholas Ford Wed, Nov 16, 2016 at 2:38 PM Thanks, Nicholas. But were we both discussing the company-wide figures when you sent this response? We understand that, when using the city-specific data you sent, we would not include the accessories which were broken out for us. However, here we are merely trying to find a ratio of direct sales verses indirect sales using the company-wide data. Remember we got an accessories-inclusive figure for both, but only one TRS 12-10-2020-126 accessories-exclusive number. In order to compare like figures, we will need to either use the two accessory-inclusive figures, or we will need the other accessory-exclusive figure for our use. This would be for each year of the chart sent on August 26. So would you like to provide for us the missing accessory-exclusive company-wide figures, or would you rather we just use the accessory-inclusive figures for estimating the ratio? Thanks again, Nicholas, for all of your help. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Wed, Nov 16, 2016 at 2:42 PM Hi Mike – pardon the mix up. On the company-wide ratio side of things you would be correct to use the accessory-inclusive figures as discussed. Just wanted to ensure that on the city-specific-data side of things that the accessories would not be included since they are not taxable as you know. Nicholas Ford <nford@tracfone.com> To:TRS Wed, Nov 16, 2016 at 2:42 PMHi Mike – pardon the mix up. On the company-wide ratio side of things you would be correct to use the accessory-inclusive figures as discussed. Just wanted to ensure that on the city-specific-data side of things that the accessories would not be included since they are not taxable as you know. TRS <Crisp@TRS-integrity.com> To:Nicholas Ford Wed, Nov 16, 2016 at 2:46 PM Thanks Nicholas. Sounds good. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Fri, Dec 2, 2016 at 1:58 PM TRS 12-10-2020-127 Hi Mike – please see chart below in response to your question: “One more question is also outstanding. We had thought, earlier in the audit, that your company was breaking out your data-related revenues because of the data you sent titled "internet." Now we realize that this amount was actually revenue figures for sales made by your company online, not data service. So it would be great if we could get percentages from you regarding data sold to customers, so that this may be factored into our estimate.” Year 2010 2011 2012 2013 2014 Data Percentage 3.96% 18.65% 25.08% 38.42% 41.77% Note that I am also still working on providing you with information on the breakout of intrastate and interstate. Thanks, TRS <crisp@trs-integrity.com> To:Nicholas Ford Fri, Dec 2, 2016 at 2:50 PM Thanks Nicholas for the email. We will take a look at it and will let you know if we have any questions. [ ] Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS 12-10-2020-128 TRS <crisp@trs-integrity.com> To:Nicholas Ford Mon, Dec 5, 2016 at 2:33 PM Hi Nichols, Hope you had a great Thanksgiving. Also, wanted to check and see how [ ] the percentages for intrastate verses interstate you were going to supply us with. Let us know if you have any questions. Thanks Nicholas. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Wed, Dec 7, 2016 at 8:49 AM Hi Mike – please see chart below in response to your question: provide information on breakout of intrastate and interstate Year 2009 2010 2011 2012 2013 2014 Intrastate Percentage 84.07% 85.73% 83.97% 83.38% 81.09% 79.33% Interstate Percentage 15.39% 14.11% 15.58% 15.68% 17.17% 19.33% International Percentage 0.54% 0.16% 0.45% 0.94% 1.74% 1.34% Total: 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% [ ] TRS 12-10-2020-129 Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:Nicholas Ford Wed, Dec 7, 2016 at 2:17 PM Thanks Nicholas. We should be able to move forward with the audit and come up with an estimate. We will let you know if we have any other questions. Thanks Nicholas. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Thu, Dec 8, 2016 at 3:01 PM Hi Mike – [ ] We’re looking to sit down with just you at some point in the 1st quarter of 2017[ ]. In our view, we feel that it is common practice for taxpayers and auditors to meet and chat during the course of an ongoing audit. As such, let us know if you think you can be available to take a piece meal approach for a sit down. [ ] Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS 12-10-2020-130 TRS <crisp@trs-integrity.com> To:Nicholas Ford Fri, Dec 9, 2016 at 1:45 PM Hi Nicholas, [ ]At this point, we will be working on the information that you gave us and should be able to complete the [audit] in the first quarter of next year. When we begin putting together the audit papers, there is still a small possibility that we will need to ask for more information, but we are hoping we will not need anything further. After we have reviewed the [audit] with the [city], we will then be ready to review the [audit] with you. You suggested we could start [ ]. After everyone has reviewed the [audit], we can then consider sitting down with you to review an audit with [the city]. We will let you know if we have any questions. Thanks Nicholas. Have a great weekend and a Merry Christmas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Wed, Dec 14, 2016 at 1:17 PM Hi Mike – in regard to your e-mail below, we would like to see your preliminary workpapers once you have completed your estimate[ ] so that we can review on our end before you submit a final version to the [city]. If you’re able to do that, it would be greatly appreciated from our standpoint. Thanks and Happy Holidays, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS 12-10-2020-131 TRS <crisp@trs-integrity.com> To:Nicholas Ford Fri, Dec 16, 2016 at 2:36 PM Hi Nicholas, Yes, we plan to have you take a look at the preliminary workpapers before they are finalized. Things are starting to slow down now for the holidays and end-of-year deadlines, but we hope to have something back to you early in the new year. Hope you and yours have a Merry Christmas. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:Nicholas Ford Mon, Jan 9, 2017 at 2:00 PM Hi Nicholas, Hope you had a Happy New Year Day. We are working on the audit tax schedules, and have 3 questions for you: 1. While working on the audit estimate spreadsheets, we noticed something that we had missed earlier. The first chart you sent to us in June showing company-wide direct sales vs. airtime revenue just labeled the airtime revenue without inserting the word "net." But the chart you sent us in August, which showed the same and additional numbers, inserted a further clarification by labeling direct airtime and phone accessories as "net." Since these numbers are net and not gross, can you explain what was excluded from the gross to make them net? And were the figures for direct sales, which are not labeled "net," inclusive of the types of revenue excluded in these numbers? If so, is there any way of correcting this situation with a percentage of "net" vs "gross" ? 2. Another question. In graphing the percents of indirect vs. direct sales, we noticed a big drop between 2010 and 2011. Was there a point when TracFone did 100% indirect sales? If so, when did that change? We are trying to figure a good way to estimate for the time before your data begins. We don't have indirect vs direct figures for earlier than 2010. Can you get those for us quickly, or should we work toward an educated estimate for this? 3. The direct sales data years you gave us does not always correlate with the audit period. With your permission, we can expand the audit to match the direct-sales information you have given us, and estimate the years of the audit for years you have not. Another option would be to take the audit up to the present, although this would require either more data or some additional estimation. Another option is to include only TRS 12-10-2020-132 the years open on the audit, which would require another audit to be opened to bring you up to the present. Whatever you want to do is your choice and we will go with it. Let us know what way you would think would be best. Thanks, Nicolas. Let us know if you have any questions. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:Nicholas Ford Mon, Jan 23, 2017 at 3:23 PM Hi Nicholas, Hope everything is going great for you. Just checking to see how things are coming along regarding the email below. Let us know if if you have any questions. Thanks Nicholas. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Monday, January 9, 2017 2:00 PM Subject: Net vs Gross Hi Nicholas, Hope you had a Happy New Year Day. We are working on the audit tax schedules, and have 3 questions for you: TRS 12-10-2020-133 1. While working on the audit estimate spreadsheets, we noticed something that we had missed earlier. The first chart you sent to us in June showing company-wide direct sales vs. airtime revenue just labeled the airtime revenue without inserting the word "net." But the chart you sent us in August, which showed the same and additional numbers, inserted a further clarification by labeling direct airtime and phone accessories as "net." Since these numbers are net and not gross, can you explain what was excluded from the gross to make them net? And were the figures for direct sales, which are not labeled "net," inclusive of the types of revenue excluded in these numbers? If so, is there any way of correcting this situation with a percentage of "net" vs "gross" ? 2. Another question. In graphing the percents of indirect vs. direct sales, we noticed a big drop between 2010 and 2011. Was there a point when TracFone did 100% indirect sales? If so, when did that change? We are trying to figure a good way to estimate for the time before your data begins. We don't have indirect vs direct figures for earlier than 2010. Can you get those for us quickly, or should we work toward an educated estimate for this? 3. The direct sales data years you gave us does not always correlate with the audit period. With your permission, we can expand the audit to match the direct-sales information you have given us, and estimate the years of the audit for years you have not. Another option would be to take the audit up to the present, although this would require either more data or some additional estimation. Another option is to include only the years open on the audit, which would require another audit to be opened to bring you up to the present. Whatever you want to do is your choice and we will go with it. Let us know what way you would think would be best. Thanks, Nicolas. Let us know if you have any questions. Have a great afternoon. Mike Nicholas Ford <nford@tracfone.com> To:TRS Thu, Jan 26, 2017 at 2:46 PM Hi Mike – I’ll try to get you some feedback on your outstanding questions sometime next week, as I’ve been dealing with an on-site visitor all this week. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS 12-10-2020-134 TRS <crisp@trs-integrity.com> To:Nicholas Ford Thu, Jan 26, 2017 at 7:18 PM Hi Nicholas, Thanks for the update. Look forward to hearing from you next week. Let me know if you have any questions. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS<crisp@trs-integrity.com> To:Nicholas Ford Fri, Feb 3, 2017 at 11:59 AM Hi Nicholas, Hope you are doing great. Also, just checking to see how things are coming along with the information that we requested in the email below. Let me know if you have any questions. Thanks Nicholas. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Thu, Feb 9, 2017 at 10:47 AM TRS 12-10-2020-135 Hi Mike – please see my responses to your questions bolded in green font below. As discussed, from our end it would be preferable to enlighten you on our business model and answer your questions in-person. The sit down does not have to be formal in order to walk you through the workings of our business. Regards, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. From: TRS [mailto:crisp@trs-integrity.com] Sent: Monday, January 09, 2017 5:00 PM To: Nicholas Ford Subject: Net vs Gross Hi Nicholas, Hope you had a Happy New Year Day. We are working on the audit tax schedules, and have 3 questions for you: 1. While working on the audit estimate spreadsheets, we noticed something that we had missed earlier. The first chart you sent to us in June showing company-wide direct sales vs. airtime revenue just labeled the airtime revenue without inserting the word "net." But the chart you sent us in August, which showed the same and additional numbers, inserted a further clarification by labeling direct airtime and phone accessories as "net." Since these numbers are net and not gross, can you explain what was excluded from the gross to make them net? And were the figures for direct sales, which are not labeled "net," inclusive of the types of revenue excluded in these numbers? If so, is there any way of correcting this situation with a percentage of "net" vs "gross" ? there is a revenue recognition concept involved, whereby some there are things such as deferrals, etc which are not a part of net revenue. Net revenue is basically recognized revenue. 2. Another question. In graphing the percents of indirect vs. direct sales, we noticed a big drop between 2010 and 2011. Not sure what you mean by ‘big drop’, based on the retail vs wholesale percentages provided from 2010 to 2011 – i.e., 2010: 17% (retail), 83% (wholesale); 2011: 21% (retail), 79% (wholesale). Was there a point when TracFone did 100% indirect sales? If so, when did that change? We are trying to figure a good way to estimate for the time before your data begins. We don't have indirect vs direct figures for earlier than 2010. Can you get those for us quickly, or should we work toward an educated estimate for this? I’ll be working on compiling retail vs wholesale figures for earlier than 2010, and seek to provide at my earliest. 3. The direct sales data years you gave us does not always correlate with the audit period. With your permission, we can expand the audit to match the direct-sales information you have given us, and estimate the years of the audit for years you have not. Another option would be to take the audit up to the present, although this would require either more data or some additional estimation. Another option is to include only the years open on the audit, which would require another audit to be opened to bring you up to the present. Whatever you want to do is your choice and we will go with it. Let us know what way you would think would be best. I do not give permission to alter the audit periods. Thanks, Nicolas. TRS 12-10-2020-136 Let us know if you have any questions. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <Crisp@TRS-integrity.com> To:Nicholas Ford Thu, Feb 9, 2017 at 2:32 PM Thanks, Nicholas, for the information. We do appreciate all of your help with [this audit]. We will be looking forward to the before-2010 figures regarding the whole-company data. Could you also provide a more direct answer to that part of the first question regarding "gross" and "net," that reads, "And were the figures for direct sales, which are not labeled "net," inclusive of the types of revenue excluded in these numbers? If so, is there any way of correcting this situation with a percentage of "net" vs "gross" ?" Once again, here we were wondering if your numbers for city-wide sales included the same part of revenues as the company-wide sales. Are they different? And if so, what is the percentage of difference? As soon as we wrap up the [audit], we can then discuss the matter with the [city] about your concerns and how they would like to move forward. As you probably remember, the [city has] asked us to complete the [audit] before they would consider your request regarding any meetings. And as mentioned before, we do not plan to send out any [assessment] before you have had a chance to take a look at our audit schedules. [ ] Thanks, and have a great day. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:Nicholas Ford Tue, Feb 21, 2017 at 2:08 PM Hi Nicholas, Hope everything is going well. TRS 12-10-2020-137 Just checking to see if you have had a chance to review the questions below. Let us know if you have any questions. Thanks Nicholas. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com> Sent: Thursday, February 9, 2017 2:32 PM Subject: Re: Net vs Gross Thanks, Nicholas, for the information. We do appreciate all of your help with [this audit]. We will be looking forward to the before-2010 figures regarding the whole-company data. Could you also provide a more direct answer to that part of the first question regarding "gross" and "net," that reads, "And were the figures for direct sales, which are not labeled "net," inclusive of the types of revenue excluded in these numbers? If so, is there any way of correcting this situation with a percentage of "net" vs "gross" ?" Once again, here we were wondering if your numbers for city-wide sales included the same part of revenues as the company-wide sales. Are they different? And if so, what is the percentage of difference? As soon as we wrap up the [audit], we can then discuss the matter with the [city] about your concerns and how they would like to move forward. As you probably remember, the [city has] asked us to complete the [audit] before they would consider your request regarding any meetings. And as mentioned before, we do not plan to send out any [assessment] before you have had a chance to take a look at our audit schedules. [ ] Thanks, and have a great day. Mike Nicholas Ford <nford@tracfone.com> To:TRS Fri, Feb 24, 2017 at 7:40 AM Hi Mike – I expect to have at least some information for you today. Thanks, TRS 12-10-2020-138 Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com> Sent: Friday, February 24, 2017 7:40 AM Subject: RE: Net vs Gross Hi Mike – I expect to have at least some information for you today. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:Nicholas Ford Fri, Feb 24, 2017 at 12:50 PM Thanks Nicholas. That sounds great. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be TRS 12-10-2020-139 prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. m> To:Nicholas Ford Fri, Mar 3, 2017 at 1:40 PM Hi Nicholas, Hope all is well. I also wanted to check and see how things are coming along with the net and gross issue mentioned below in our emails: Could you also provide a more direct answer to that part of the first question regarding "gross" and "net," that reads, "And were the figures for direct sales, which are not labeled "net," inclusive of the types of revenue excluded in these numbers? If so, is there any way of correcting this situation with a percentage of "net" vs "gross" ?" Once again, here we were wondering if your numbers for city- wide sales included the same part of revenues as the company-wide sales. Are they different? And if so, what is the percentage of difference? As soon as we receive this information, we should be able to come up with an estimate [ ] Let me know if you have any questions. Thanks Nicholas. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Wed, Mar 8, 2017 at 2:49 PM Hi Mike – having now wrapped up our month end closing, I’ll be regrouping on your audit [I] expect to be able to comment on your net vs gross issue. Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS 12-10-2020-140 TRS <crisp@trs-integrity.com> To:Nicholas Ford Wed, Mar 8, 2017 at 4:54 PM Thanks Nicholas. That sounds great. Have a great day. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:Nicholas Ford Tue, Mar 14, 2017 at 12:45 PM Hi Nicholas, Hope things have been going great for you. Just checking to see how things are coming along and if you have any questions. [ ] Thanks Nicholas. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. <crisp@trs-integrity.com> To:Nicholas Ford Tue, Mar 28, 2017 at 1:59 PM Hi Nichols, Hope all is going well. Just checking to see how things are coming along with our net/gross questions. [ ] Let us know if you have any questions. Thanks Nicholas. Have a great day. Mike TRS 12-10-2020-141 This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Tue, Mar 28, 2017 at 1:59 PM I am out of the office beginning on Tuesday, March 28th and returning on Monday, April 3rd. I will be checking e-mail as often as I can. If you need immediate assistance, please contact John Cavalieri, a Senior Manager in the Tax Department, at (305) 715- 6578 or Scott Myott, a Senior Manager at (305) 715-6578. Nicholas Ford <nford@tracfone.com> To:TRS Wed, Mar 29, 2017 at 7:06 AM Hi Mike – I’m out of the office this week. 2008 is not the furthest I can go back, so plan is to continue with prior periods when I’m back in office next week. Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:Nicholas Ford Wed, Mar 29, 2017 at 1:32 PM Sounds great. Thanks Nicholas. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> TRS 12-10-2020-142 To:Nicholas Ford Tue, Apr 4, 2017 at 3:30 PM Hi Nicholas, I also wanted to check and see how things are coming along with the net and gross issue mentioned below in our email: Could you also provide a more direct answer to that part of the first question regarding "gross" and "net," that reads, "And were the figures for direct sales, which are not labeled "net," inclusive of the types of revenue excluded in these numbers? If so, is there any way of correcting this situation with a percentage of "net" vs "gross" ?" Once again, here we were wondering if your numbers for city-wide sales included the same part of revenues as the company-wide sales. Are they different? And if so, what is the percentage of difference? As soon as we receive this information, we should be able to come up with an estimate [ ]. Thanks Nicholas. Let us know if you have any questions. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Thu, Apr 6, 2017 at 2:24 PM Hi Mike – as I had mentioned previously, some things are done to arrive at the net airtime revenues (per financial statements) number, such as removing deferrals and retail margin. On the other hand, the retail city-wide sales numbers do not include such deferrals or retail margin. Also, please note that net airtime revenues do not constitute receipts but rather are recognized revenues (after adjusting to remove deferrals and retail margin), whereas the retail sales numbers represent sales (receipts) and not revenue. Given this, the percentages/ratios relating to retail sales vs net airtime revenues that you were given were merely used as a basis for deriving those ratios…which are rough measures of the retail vs. wholesale percentage proportions. TRS 12-10-2020-143 Thus, while the net airtime revenues are company-wide revenues per the financial statements (and include both retail + wholesale recognized revenues after the mentioned adjustments), the city-wide retail sales amounts are the receipts as per the applicable city-level zip codes rather than revenues. We would be happy to talk through our retail sales and revenue recognition practices at our meeting/in-person. Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:Nicholas Ford Thu, Apr 6, 2017 at 6:02 PM Thanks Nicholas. I will review your email and let you know if we have any questions. [ ] Thanks again for all of your help. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Thanks, Nicolas. This answer should do us. We appreciate all of your help on this audit. Did you ever get the chance to send to us company-wide (retail vs wholesale) data for pre 2010? Remember on February 9th you emailed saying you were working on compiling these. If you cannot come up with them we will go ahead and estimate them. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Thu, Apr 13, 2017 at 2:40 PM Hi Mike – I’ve been dealing with a visitor in our offices all week. I should be able to get prior 2010 year percentages (retail vs. wholesale sales) to you in another week or so. TRS 12-10-2020-144 Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:Nicholas Ford Thu, Apr 13, 2017 at 7:13 PM Thanks Nicholas. As soon as we get it we should be able to move forward. [ ] Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. crisp@trs-integrity.com> To:Nicholas Ford Wed, Apr 19, 2017 at 2:50 PM Hi Nicholas, Checking to see how long will it be for the 2009 company-wide percentage? We are looking forward to wrapping up the audit and coming up with an estimate. Is it possible to have his information by the end of the week? Thanks Nicholas. Let us know if you have any questions. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Thu, Apr 20, 2017 at 8:28 AM TRS 12-10-2020-145 Hi Mike – below is what I have for 2009 and prior. 2005 (1) Retail (Direct) Sales Amounts (Airtime & Phones) Company-Wide 144,923,359 15% Retail Sales P (2) Net Airtime Revenue (Per Financial Statements) 835,391,261 (3) Net Phones & Accessories Revenue (Per Financial Statements) 154,573,204 Total (2) + (3): 989,964,465 Company-Wide 1 minus Retail Percentage = 85% Wholesale Sale 2006 (1) Retail (Direct) Sales Amounts (Airtime & Phones) Company-Wide 183,941,718 14% Retail Sales P (2) Net Airtime Revenue (Per Financial Statements) 1,109,590,593 (3) Net Phones & Accessories Revenue (Per Financial Statements) 191,439,590 Total (2) + (3): 1,301,030,183 Company-Wid e 1 minus Retail Percentage = 86% Wholesale Sale 2007 (1) Retail (Direct) Sales Amounts (Airtime & Phones) Company-Wide 198,841,018 14% Retail Sales P (2) Net Airtime Revenue (Per Financial Statements) 1,234,818,017 (3) Net Phones & Accessories Revenue (Per Financial Statements) 166,497,938 Total (2) + (3): 1,401,315,955 Company-Wide 1 minus Retail Percentage = 86% Wholesale Sale 2008 (1) Retail (Direct) Sales Amounts (Airtime & Phones) Company-Wide 257,243,973 17% Retail Sales P (2) Net Airtime Revenue (Per Financial Statements) 1,340,504,930 TRS 12-10-2020-146 (3) Net Phones & Accessories Revenue (Per Financial Statements) 138,013,158 Total (2) + (3): 1,478,518,088 Company-Wide 1 minus Retail Percentage = 83% Wholesale Sale 2009 (1) Retail (Direct) Sales Amounts (Airtime & Phones) Company-Wide 303,511,516 18% Retail Sales P (2) Net Airtime Revenue (Per Financial Statements) 1,523,738,224 (3) Net Phones & Accessories Revenue (Per Financial Statements) 171,713,817 Total (2) + (3): 1,695,452,041 Company-Wide 1 minus Retail Percentage = 82% Wholesale Sale Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:Nicholas Ford Mon, Apr 24, 2017 at 1:42 PM Thanks Nicholas. We will now move forward with the audit. [ ] Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS 12-10-2020-147 Nicholas Ford <nford@tracfone.com> To:TRS Thu, Apr 27, 2017 at 12:21 PM Hi Mike –[ ]could you use [ ] 2007 which I don’t believe you have? I should provide that data to you. Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:Nicholas Ford Thu, Apr 27, 2017 at 5:59 PM Hi Nicholas, [ ] 2007 Billing and APP data, how long until we could get that from you? Thank again, Nicholas for all your help. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Fri, Apr 28, 2017 at 2:17 PM Hi Mike – [I]n order to not hold things up, for the [ ] 2007 retail sales (BP and APP) data, you can estimate something on that as well upon the assumption that it can be ‘trued-up’ against the actuals that I’ll be working on assembling in order to provide to you as soon as practical from my end. Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. <crisp@trs-integrity.com> To:Nicholas Ford TRS 12-10-2020-148 Fri, Apr 28, 2017 at 3:28 PM Hi Nicholas, Thanks for following up on this situation. We already have a mock-up of sorts we are working on completing, but at this point, it would be better that we not send it to you or to our client until we have the best numbers available, so that we would not need to update again. Approximately how long will these numbers take to get to us? [ ] Let us know if you have any questions. Thanks again for all of your help. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:Nicholas Ford Tue, May 9, 2017 at 12:45 PM Hi Nicholas, We noticed that there are no "Billing Platform Sales" on some 2007 reports, but there are "Brightpoint Direct" sales. Are both designations counted as direct sales? Thanks, Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Tue, May 9, 2017 at 2:28 PM TRS 12-10-2020-149 Hi Mike – are you referring to[ ]Renton? In any event, Brightpoint relates to retail phones sales only and has nothing to do with Billing Platform, which relates to retail sales of airtime. Since you’re auditing utility users’ taxes, phones should not apply to the tax base. Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. Crisp@trs-integrity.com> To:Nicholas Ford Tue, May 9, 2017 at 3:02 PM Thanks, Nicolas, that clears things up about Brightpoint. For Renton, we are missing all of 2007 Billing Platform data. We got the information for Internet Sales and Accessories, but not Billing Platform. We can estimate them if you like, the amounts should be small. Thanks again, Nicholas for all of your help. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:Nicholas Ford Wed, May 10, 2017 at 4:38 PM Hi Nicholas, After reviewing the information [ ]We are[ ] missing Billing Platform sales, as you know, for Renton for all of 2007. Will you be able to get these to us right away, or will we need to estimate them? Thanks Nicholas for checking this out for us. Have a great day. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be TRS 12-10-2020-150 prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Thu, May 11, 2017 at 7:14 AM Hi Mike – see below [ ] Billing Platform was not in existence to record retail sales transactions during the 1/07—4/07 period. For May 2007, there were no Billing Platform sales for Renton. However, I will be sending you today the Billing Platform retail sales reports for Renton for 6/07—12/07. You can let me know if you are missing anything else. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS<crisp@trs-integrity.com> To:Nicholas Ford Thu, May 11, 2017 at 11:44 AM Hi Nicholas, [ ] Thanks Nicholas, and we will be looking forward to the Renton information you will be sending today. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. NOTE: At this point, TracFone began sending zip code retail sales/reports. These sent to TRS on 5/11/17 are being submitted seperately. TRS <crisp@trs-integrity.com> To:Nicholas Ford Mon, May 15, 2017 at 2:48 PM Hi Nicholas, Hope you had a great weekend. TRS 12-10-2020-151 We found out Friday that Renton residents make up a small amount of the zip code 98178, but the number is material, about 496 people, (2%) of the zip code according to city-data.com. We can either have you pull these for us, or increase the estimate by the 98178 population by using a percentage. We would prefer the real numbers, but are concerned that it will take too much additional time. Let us know what works best for you. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Tue, May 16, 2017 at 11:48 AMHi Mike -- I'm actually on the road traveling. I expect to be back in the office on Thursday and will look at your zip code below. Once I have a look, I'd let you know a better time gauge as to when I could turn it around to you. TRS <crisp@trs-integrity.com> To:Nicholas Ford Tue, May 16, 2017 at 12:20 PM Thanks Nicholas. Sounds great. Have a great day. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:Nicholas Ford Tue, May 23, 2017 at 2:06 PM Hi Nicholas, Hope things have been going great for you. I believe we are still waiting on [ ] the zip code data for the missing zip code for Renton. TRS 12-10-2020-152 Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:Nicholas Ford Fri, May 26, 2017 at 2:44 PM Hi Nicholas, Just checking to see how things are coming along with the [ ] data for the missing zip code for Renton. Let us know if you have any questions. Thanks Nicholas. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. NOTE: At this point, TRS began sending the Zip Code data which included the 98178 zip code numbers. These emails and attachments were sent to TRS on 6/2/17, and have already been submitted by TRS to Renton. TRS <crisp@trs-integrity.com> To:Nicholas Ford Tue, Jun 6, 2017 at 2:52 PM Hi Nicholas, Hope everything is going well with you. We want to thank you for the mountains of work you have been doing to get the information to us for [this audit]. It must take a lot of time and attention, but it is the last leg to completing the estimate, and we appreciate all you are putting into it. We understand that [ ] it can be a lot to handle. To recap what is yet needed: TRS 12-10-2020-153 1. The rest of the Renton add-1 zip data is coming in quickly, thank you. We were concerned, however, that the 2007 data does not include billing platform, even for years which should have it. [ ] Let us know if you have any questions, and thanks again, Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:Nicholas Ford Mon, Jun 12, 2017 at 5:58 PM Hi Nicholas, [ ]As mentioned below, the 2007 data for Renton does not include billing platform, even for the years after May which should have it. You are probably already working on this, or are about to get to it; however, we can't be sure, so I sending you this email. Have a great day, Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS<crisp@trs-integrity.com> To:Nicholas Ford Thu, Jun 22, 2017 at 1:22 PM Hi Nicholas, When inputting the enterprise amounts I noticed that the Renton September 2010 [amounts] were not summed at the bottom. [Is this document] complete but simply not summed? Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> TRS 12-10-2020-154 To:TRS Thu, Jun 22, 2017 at 1:39 PM Hi Mike – please see bullet points below regarding your questions in the attached e-mail. •Billing Platform was not in existence as a customer retail sales transaction interface until May 2007. For May—August 2007, there were no Billing Platform sales for the Renton 98178 Zip Code and thus you did not receive an additional file with the extra zip added. •There was Billing Platform sales activity for the extra 98178 zip code for Renton for September—December 2007. *Please find those Billing Platform files attached to this e-mail.* Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. Nicholas Ford <nford@tracfone.com> To:TRS Thu, Jun 22, 2017 at 1:47 PM Hi Mike – the files you reference below were complete, but for the fact they were not summed by mistake. In the attached, I’m resending them with totals populated at the bottom of each file. Thanks, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS<crisp@trs-integrity.com> To:Nicholas Ford Fri, Jun 30, 2017 at 12:57 PM Hi Nicholas, TRS 12-10-2020-155 Hope all is well. Thanks for all of the information that you have sent to us for the audit[]. We have attached a copy of the methodology of coming up with an estimate. [ ] Let us know if you have any questions. Thanks Nicholas. This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:Nicholas Ford Wed, Jul 19, 2017 at 4:41 PM Hi Nicholas, Hope things are going well with you. Just checking to see [ ] if you have any questions with the methodology. We will need to hear from you by Friday. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Wed, Jul 19, 2017 at 4:45 PM I am out of the office beginning Wednesday, July 19th and returning on Monday, July 24th. I expect to be on e-mail and also checking voicemail as often as I can. If you need immediate assistance, please contact John Cavalieri, a Senior Manager in the Tax Department, at (305) 715- 6578 or Scott Myott, a Senior Manager at (305) 715-6778. TRS <crisp@trs-integrity.com> To:Nicholas Ford Fri, Jul 21, 2017 at 3:47 PM TRS 12-10-2020-156 [ ] Nicholas. [ ] [Could] you let me know if you have any questions by Wednesday with the methodology? If not, we can move forward with the audit. Thanks Nicholas. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Wed, Jul 26, 2017 at 3:26 PM Hi Mike – [ ] As far as your methodology goes, yes we do anticipate that we will have questions but think it is better we put that on the agenda for our meeting so that we could walk through it in conjunction with your estimate, as well as ask questions. Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:Nicholas Ford Fri, Aug 4, 2017 at 1:10 PM Hi Nicholas, Hope things have been going well with you. I had a chance to talk with [the city] and [they] have told me that they would like to send you a copy of the tax schedules for your review. They believe that having you review the tax schedules and come up with questions by email would be the most efficient. Then if you still have more questions, or see something that we may need to adjust, we can consider talking over the telephone to walk you through any items that you are not sure about on how we came up with the estimate. We have already sent you the general methodology which is approximate for [the] city; we will be sending [the] city's specific methodology in a separate email. [ ] TRS 12-10-2020-157 Enclosed with this email you will find the tax schedules.The spreadsheets are pretty complex, since we had to approximate the taxable values using sales figures, and then reduce them by various factors. Here are some additional explanations that will make reading the schedules easier: 1. Notice that the Original Tax Reported Sheet is blank. No tax was reported. That part is easy! 2. The Unreported Revenue Sheet has columns defined on the Methodology sheet, but to simplify: -The Non-Direct Sales column D is calculated by multiplying all the Direct Sales (sum of next 4 columns) times proportions given to us by TracFone. -Page Plus Air and Page Plus don't show up until 2014 so those columns are [ ] empty. -The actual Billing Platform Sales and APP Direct Sales values that were given to us from TracFone are listed in columns U and V. -Columns U and V are read into columns D and H and reduced by the factors explained on the chart that is found in columns J through Z. Thanks Nicholas. Hope you have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:Nicholas Ford Fri, Aug 4, 2017 at 1:10 PM Hi Nicholas, We sent you a sample methodology, but here is the methodology [the] audit. Let us know if you have any questions. TRS 12-10-2020-158 Thanks, Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:Nicholas Ford Wed, Aug 9, 2017 at 3:20 PM Hi Nicholas, [ ]Concerning Renton, we are having the City look at some necessary improvements, due to their multiple annexation history, and we will send them to you as soon as they are approved. Hope all is well with you. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Wed, Aug 9, 2017 at 3:21 PM I am out of the office beginning Thursday, August 10th and returning on Monday, August 14th. I expect to have limited access to both e-mail and voicemail during this time. If you need immediate assistance, please contact John Cavalieri, a Senior Manager in the Tax Department, at (305) 715- 6578 or Scott Myott, a Senior Manager at (305) 715-6778. TRS <crisp@trs-integrity.com> To:Nicholas Ford Thu, Aug 10, 2017 at 12:27 PM Hi Nicholas, We have been looking harder at the population proportion calculations for Renton, and something has come up with how they were calculated. TRS 12-10-2020-159 It turns out that the population sizes for various years for Renton that we had been looking at online are not very correct at all. These online population figures show a very smooth, slight upward climb and then a bounce in 2010. But in fact, we know that the significant population bump for Renton occurred in 2008, when two large annexations were added. The Benson Hill annexation added 16,272 residents, and the Aqua Barn annexation added another 2,200 new residents that same year. This means that the most of the bump finally showing up during the census occurred two years earlier. It also means that the method we were using before underestimated the population of Renton, and therefore TracFone's Renton sales, during 2008 and 2009. So then we thought we should use only census years in our calculations, using 2010 as approximate for years of and after the annexations, and the 2000 census previous to that. But we ran into problems for this city with this approach as well. First, one of the Renton zip codes in 2000 was skipped in the census, or was inadvertently added to another zip in Renton which was way too large in 2000 compared to 2010. Second, unlike other cities, Renton experienced a myriad of annexations, small and large, during the audit period, making it hard to guess what their city population should be at each year. Finally, we brought the difficulty to Renton for their assistance, and they found Renton's own population estimates published in their Comprehensive Annual Report. These population estimates properly took into consideration the effect of the annexations. Then we were able to locate a website that actually estimates the zip populations for each year of the audit, rather than just at the census years. These estimates must have been done independently from the census counts, as they are close but not right on target with them, but there are no obvious errors that we see. The beauty of this method is that for the zips it uses a good source that estimates zip data for each year of the audit, and for the city population it uses Renton's own population counts for each year. Therefore, for this city, with its multiple annexations, we were able to come up with a fairly reliable unique population ratio for each year of the audit. We believe that this is a much more accurate approach to the estimation of Renton's population ratio, and we hope it meets with your approval. We have attached the improved Renton schedules and methodology. Let us know if you have any questions. Thanks, Tamara This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <crisp@trs-integrity.com> To:Nicholas Ford Fri, Aug 25, 2017 at 1:55 PM TRS 12-10-2020-160 Hi Nicholas, Hope you are doing well. Just checking to see how things are coming along with your review of the methodolgy and the tax schedules that we sent you. Let us know if you have any questions. Thanks Nicholas. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS<crisp@trs-integrity.com> To:Nicholas Ford Thu, Aug 31, 2017 at 2:07 PM Hi Nicholas, Hope you are doing well. It has been several weeks, and we have not heard from you concerning any questions that you might have concerning our methodology and our tax schedules. We want to make sure that you understand how we came up with our estimates and any concerns. The [city] would like to move forward to complete [this audit]. So, unless we hear from you by Tuesday, we will go ahead and move forward with the audit[]. Nicholas, we have been working on the[ audit] for a long time and I would like to thank you for all of your help with this audit and with the information that you provided to us. Have a great day. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Tue, Sep 5, 2017 at 2:29 PM Mike: We have major disagreements with the draft audit schedules that go well beyond your estimating methodology. Moreover, we have repeatedly requested the opportunity to meet with you to discuss these matters in person. We think it would be inappropriate for you to proceed without TRS 12-10-2020-161 meeting with us to discuss our legal and factual concerns. We do not believe your clients need to be present at the meeting, but anticipate that our discussion will also assist you in representing our client[] and communicating with them as appropriate. Consequently, we will be traveling to the meeting location as indicated below. We look forward to meeting you there, and are awaiting confirmation of your planned attendance. Date: Monday, September 18, 2017 Time: 2pm—5pm Location: 1420 Fifth Avenue, Suite 4200 | Seattle, WA 98111-9402 Regards, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:Nicholas Ford Thu, Sep 7, 2017 at 4:44 PM Hi Nicholas, Thanks for your email and your concerns. Being an representative for the [city] for this audit, TRS is responsible for carrying out the instructions that are given to us concerning the[ audit]. [ ] We a re still in the process of contacting the [city], however, it is the policy of TRS not to meet with taxpayer's legal representatives without the legal representative of our client being present. [ ]At this point, unless we hear from you about any concerns or questions on the methodology or the tax schedules, we would have to assume that the real issue is whether or not some or none of your business activity in the[ city] are taxable. This would then make the audit about legal issues instead of how TRS came up with the estimated tax. Once again, if you do have questions or concerns on how we came up with the methodology or the tax schedules, we are more than happy to review them with you by email or by telephone. Thanks Nicholas. Stay safe this weekend. Mike TRS 12-10-2020-162 This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Fri, Sep 22, 2017 at 2:39 PM Hi Mike – [ ]we’ve noted the policy of TRS (per your 9/7/17 e-mail) not to meet with taxpayer’s legal representatives without the legal representative(s) of your client being present. However, we propose that you meet with just TracFone (and without counsel of either party) in order for us to go through and discuss your methodology and preliminary estimates/schedules. We are planning to meeting with you as follows: Date: Wednesday, October 11, 2017 Time: 2pm—5pm Location: TBD – e.g. Seattle or Tacoma Regards, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp @trs-integrity.com> To:Nicholas Ford Fri, Sep 22, 2017 at 5:15 PM Hi Nicholas, Thanks for getting back with us. [ ] TRS 12-10-2020-163 And it is our goal to go over any questions or concerns that you have with the estimate. We will also consider your idea of a face-to-face meeting, however, we still believe that telephone and email are more effective ways to address these kinds of issues because they allow for pause to look up information and to do research, allowing for replying in a more well-thought-out way. We really believe we can get all of your questions answered and consider all of your objections without a face to face. That said, we will give the idea some thought and see how it could be managed. Hope you have a great weekend. Thanks Nicholas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Nicholas Ford <nford@tracfone.com> To:TRS Thu, Oct 12, 2017 at 2:54 PM Hi Mike – regarding the ongoing TracFone-Washington State [city audit] that you’re conducting, [ ] In that regard, we want to set up meetings with [Renton] prior to the issuance of any assessment[]. If you are able to facilitate such meetings, that would be appreciated. Or in the alternative, please provide me with the particulars of your [ ] contacts with [ ] Renton[ ] so that we can communicate our meeting request to them directly [ ] prior to the issuance of assessments. As I stated previously, we feel that such in-person meetings are mutually beneficial to all parties in terms of reaching a resolution on the [audit]. Thanks in advance for your help on this, Nicholas E. Ford | Corporate Tax | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 | nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. TRS <crisp@trs-integrity.com> To:Nicholas Ford Fri, Oct 13, 2017 at 2:00 PM Thanks Nicholas. Let me get back with you next week on this one. Have a great weekend. Mike TRS 12-10-2020-164 This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Crisp@trs-integrity.com> To:Nicholas Ford Tue, Oct 17, 2017 at 2:01 PM Hi Nicholas, At this point, sending out the assessment[] from the [city] is on hold. We have told [Renton about how] there is a utilities issue in the works that may affect their TracFone audit, one we are not at liberty to discuss. [ ] I have a question: you mention in your email below that you believe that a meeting would be beneficial to all parties. Why don't you [ ] first and [ ] then consider setting up a meeting with [Renton]? [ ] Let me know what you think. Thanks Nicholas. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS <Crisp@trs-integrity.com> To:Nicholas Ford Fri, Dec 8, 2017 at 5:10 PM Hi Nicholas, [ ]prepaid is not taxed based on usage, and our research found that this is a correct assertion. Our estimates did not change because they were not based on usage, as your company does not track usage rates, but we wanted to revise our methodology statements to reflect better understanding in this situation. Attached find the revisions for Renton[ ]. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. TRS 12-10-2020-165 Nicholas Ford <nford@tracfone.com> To:TRS Fri, Jun 22, 2018 at 3:26 PM I am out of the office beginning Friday, June 22nd and returning on Wednesday, June 27th. I expect to have limted access to both e-mail and voicemail during this time. If you need immediate assistance, please contact John Cavalieri, a Senior Manager in the Tax Department, at (305) 715- 6578 or Scott Myott, a Senior Tax Manager at (305) 715-6778. Nicholas Ford <nford@tracfone.com> To:TRS Fri, Jan 25, 2019 at 2:23 PM I am out of the office beginning Wednesday, January 23rd and returning on Monday, January 28th. I expect to have limted access to both e-mail and voicemail during this time. If you need immediate assistance, please contact John Cavalieri, a Senior Manager in the Tax Department, at (305) 715- 6578 or Scott Myott, a Senior Tax Manager at (305) 715-6778. Nicholas Ford <nford@tracfone.com> To:TRS Wed, Jul 17, 2019 at 3:41 PM I am out of the office beginning Wednesday, March 27th and returning on Monday, April 1st. I expect to have limted access to both e-mail and voicemail during this time. If you need immediate assistance, please contact John Cavalieri, Director of Transaction Taxes in the Tax Department, at (305) 715-6578 or Scott Myott, a Senior Tax Manager at (305) 715-6778. Deposition of Michael Crisp In Re: TracFone Wireless, Inc. November 5, 2020 206.287.9066 l 800.846.6989 1325 Fourth Avenue, Suite 1840, Seattle, Washington 98101 www.buellrealtime.com email: info@buellrealtime.com In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 2 1 A P P E A R A N C E S 2 APPEARING VIA ZOOM FOR THE APPELLANT: 3 SCOTT EDWARDS 4 GRANT S. DEGGINGER Lane Powell PC 5 1420 Fifth Avenue Suite 4200 6 Seattle, Washington 98111 206.223.7000 7 deggingerg@lanepowell.com EdwardsS@LanePowell.com 8 9 APPEARING VIA ZOOM FOR THE CITY OF RENTON: 10 KARI L. SAND 11 Ogden Murphy Wallace P.L.L.C. 901 Fifth Avenue 12 Suite 3500 Seattle, Washington 98164 13 206.447.7000 ksand@omwlaw.com 14 15 ALSO PRESENT VIA ZOOM: 16 TAMURA CRISP 17 18 * * * * * 19 20 21 22 23 24 25 In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 9 1 as a accountant. And then, from there, I worked for the 2 City of Tacoma. I believe that's -- that is it. 3 Q. Okay. 4 And what did you do for the City of Tacoma? 5 A. As City of Tacoma, I was the financial analyst. 6 I was also an auditor, senior auditor, audit supervisor, 7 and also as acting tax manager. I also worked for a 8 short time as special assistant to the City manager. 9 And I also was on the City -- City of Tacoma's 10 retirement board. 11 Q. When did you first start in -- start working at 12 the City of Tacoma? 13 A. 1987. 14 Q. Sorry, what was that date? 15 A. 1987. 16 Q. Thank you. 17 A. Did I mention to you I was a financial analyst 18 also? 19 Q. You did. You started with the financial -- so 20 you started in 1987 as a financial analyst at the -- 21 A. Yes. 22 Q. -- City of Tacoma? 23 A. Yes. 24 Q. How long did you have that position? 25 A. Approximately five years. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 17 1 A. Yes. 2 Q. Okay. 3 And what did you do after you -- you left the 4 employment of the City of Tacoma? 5 A. Well, I started the company, Tax Recovery 6 Services, in 2004. And at that point, then, I 7 started -- I started working -- you know, started doing 8 paperwork and everything. And once I left the City of 9 Tacoma, I continued on with the -- with the company, Tax 10 Recovery Services. 11 Q. Okay. 12 So you started the company while you were an 13 employee of the City of Tacoma? 14 A. Yes, just the paperwork part of it, yes, to get 15 registered. And we did do some work as -- as Tax 16 Recovery Services. 17 Q. So the -- the company Tax Recovery Services 18 started operations prior to your leaving the City of 19 Tacoma? 20 A. Yes. 21 Q. Okay. 22 And that was in 2004? 23 A. Right. 24 Q. Okay. 25 Who are the owners of Tax Recovery Services? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 18 1 A. Just Tamura Crisp and myself. 2 Q. Okay. 3 And what are your ownership interests in the 4 company? 5 A. As far as ownership you mean, as far as the 6 breakout, as far as -- 7 Q. Yes. What's the allocation of ownership 8 between? 9 A. Oh, okay. 98 percent Michael Crisp, and 10 2 percent Tamura Crisp. 11 Q. Okay. 12 And your title at the company is -- 13 A. It's president. 14 Q. President. Okay. And you've been the president 15 since the company was formed in 2004? 16 A. Yes. 17 Q. Does the -- the company have any employees? 18 A. Right now it just has one employee. 19 Q. And who is that? 20 A. Nathan Crisp. 21 Q. Is he related? 22 A. Yes, our son. 23 Q. And what is his title? 24 A. Auditor. 25 Q. And how long has he been employed by TRS? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 19 1 A. 2013. Correct? 2013. 2 Q. Okay. 3 And did he act as an auditor on the TracFone 4 audit? 5 A. No, he did not act as an auditor on the TracFone 6 audit. 7 Q. Did he have any other role with respect to the 8 TracFone audit? 9 A. He did input information for us. 10 Q. Can you describe the business of Tax Recovery 11 Services? 12 A. Tax Recovery Services provides auditing services 13 to cities within the State of Washington. 14 Q. How many cities does the company work for? 15 A. Currently, I believe six. I'd have to name them 16 out to -- 17 Q. Yeah. Does that -- 18 A. Let me -- let me think about this, see if I can 19 count them in my head. Let's see. 20 (Sotto voce comments.) 21 I believe five. 22 Q. And does the number of cities that you represent 23 change over time? 24 A. Yes. We had other cities that we worked for, 25 several other cities, and those contracts ran out. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 39 1 Q. So prior to 2017, were you the only person 2 working on the TracFone audit? 3 A. No. Ms. Crisp also worked on it. And also 4 Nathan Crisp did input. 5 Q. So what -- what did Mrs. Crisp do with respect 6 to the TracFone audit? 7 A. She came up with the methodology. 8 Q. Anything else? 9 A. That was the main thing she did. 10 Q. Who was responsible for producing to the City of 11 Renton the audit file in connection with this 12 administrative appeal? 13 A. Describe what you mean by "audit file". What -- 14 what do you mean? 15 Q. Again, we made a request of the City of Renton, 16 that the City of Renton produce the audit file. We were 17 told that they needed to get the audit file from you. 18 And so, that is all -- that is the question that I 19 asked. We then received a bunch of documents that we 20 understood came from you. 21 A. Right. 22 Q. So I'm trying to understand, what is it that you 23 were asked to produce as part of this administrative 24 appeal? 25 A. Okay. As far as our audit file itself, they In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 100 1 A. It means providing customers access to -- to -- 2 to telephone services. 3 MS. CRISP: Yeah. 4 BY MR. EDWARDS: 5 Q. And what do you mean when you say "providing 6 customers access to telephone services"? 7 A. Well, the ability to be able to communicate with 8 different people. 9 Q. So is Zoom providing telephone services as part 10 of this deposition today? 11 A. Well, that's probably considered data. Probably 12 not. 13 Q. Are we communicating with each other? 14 A. Did you hear me? 15 Q. I did, yes. 16 A. Okay. Did you hear my answer? 17 Q. I -- I did. I -- I -- I -- the -- your first -- 18 your first answer was that providing telecommunications 19 services is accomplished by providing communication. 20 But Zoom is providing the ability for us to communicate, 21 and you said Zoom is not providing telephone service -- 22 A. No. 23 Q. -- so clearly, there's more to providing 24 telephone service than simply enabling communication. 25 A. Right. And -- In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 101 1 Q. So I'm trying to understand, what more is 2 required? 3 A. Well, at that point, you're looking at net -- 4 net -- network telephone services, which is provided to 5 different people. And I also -- there are certain 6 things that can be -- as far as, you know, taxable and 7 what is not, so... 8 Q. Is network telephone service a term that's 9 defined by a statute? 10 A. Yes, it is. 11 Q. And so does a -- does a business have to be 12 providing network telephone service as defined by the 13 statute in order to be taxable? 14 A. Not necessarily. You're looking at the RCWs, 15 and you're looking at -- as far as definition of 16 telephone services. 17 Q. So what -- what definitions are you looking at 18 beyond network telephone service that would be taxable? 19 A. We're looking at RCW 82104, RCW 35.82. 20 Q. I'm -- I'm not asking for a list of statutory 21 cites. 22 A. Okay. 23 Q. I'm trying to under- -- I -- I asked you whether 24 it is necessary to be providing network telephone 25 service, as that term is defined by the statute, in In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 102 1 order to be taxable. And by "taxable" I meant subject 2 to a city utility tax. 3 If I understood you correctly, you said that's 4 not the only activity that is subject to telephone 5 utility tax. Am I -- was I correct in understanding 6 your answer? 7 A. You're only looking at whatever the code says as 8 far as what -- what they find as telephone activity. 9 Q. When you audit somebody, do you need to 10 determine whether their activity is something that is 11 subject to tax under the relevant code or -- or statute? 12 A. Yes, we do. 13 Q. Okay. 14 And you've been doing this for how many years? 15 A. Probably since 19 -- well, you're talking about 16 telephone companies. We probably started at -- I don't 17 know how many. I've been doing tax audits since 1992. 18 Q. And so do you feel like you have an 19 understanding of what the tax codes that you audit 20 compliance with provide for? 21 A. Yes. 22 Q. Okay. So what is your understanding of what 23 activities are subject to Renton's telephone utility 24 tax? 25 A. Well, at that point, as far as what's actually In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 123 1 there is a problem -- if you look at the back of the 2 card, if you read it, are -- are basically on that 3 Department of Revenue court case. It basically details 4 what's on there and what -- also, as far as communicate 5 the terms, conditions, and -- and that they have 6 complete control over the communications that happen. 7 So it's not Walmart that's actually buying 8 communications; it's actually TracFone who's buying 9 access. 10 Q. How do you make the determination that Walmart 11 is not buying communications? 12 A. Well, I called up Walmart, and I asked them, 13 this card -- if I was to buy a card, as a customer, and 14 I said, if something went wrong or if I had to change 15 my, you know, whatever plan or -- or time, whatever, who 16 would I contact if I have a problem with this card? Who 17 do I -- who do I talk to? Would it be you? 18 And they said, No, it would not. They said, You 19 need to contact TracFone, because they're the ones who 20 are providing this -- this -- this service. 21 Q. So who did you call at Walmart? 22 A. I just called -- just -- just -- I just called 23 the person who worked at the store. Any -- any person. 24 I just picked up the phone and -- 25 (Inaudible due to crosstalk.) In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 124 1 Q. It's all right. You're talking -- you -- you 2 called the general store number for which store? 3 A. Right. Just a general store by our house, yes. 4 Q. Okay. And would it -- is it a store in Renton? 5 A. We have -- not that particular time, but we 6 have -- 7 Q. The store that you -- was the store that you 8 called located in Renton? 9 A. I don't think -- no. I don't think it was, no. 10 Q. Who did you talk to at that store? 11 A. I don't know. It was just a -- I didn't get the 12 person's name. 13 Q. Who -- whoever answered the general number? 14 A. Phone in that -- in that part of the store. 15 Q. Do you -- did that person give you their name? 16 A. No, they did not. 17 Q. Did that person give you their title? 18 A. No. 19 Q. Did that person give you any information to 20 demonstrate why they knew the -- the answers that they 21 gave you? 22 A. No. They just told me that -- that they would 23 not answer that -- they would not answer that question. 24 Q. If I walk into a Walmart and I buy an Apple 25 iPhone, am I buying that iPhone indirectly from Apple? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 151 1 audit. 2 Q. Okay. What do you learn when you do an audit? 3 A. Well, we're trying to find out the business 4 activity that -- that's going on in -- in the audit and 5 in the company and what they're doing, and -- 6 Q. Okay. 7 A. -- and go from there. 8 Q. So how do you find out what the business 9 activity is and what a company is doing? 10 A. Normally, we talk to the company. You know, we 11 may do some research. We may look at briefs, court 12 cases. We also, most definitely and most important is 13 talking to the company itself and directly asking them 14 questions, a lot of questions, on what they do and how 15 they do it. 16 Q. What questions did you ask TracFone about what 17 they do and how they do it? 18 A. That, I can't remember. Yeah. 19 Q. Did -- did you ask any of those questions by 20 email, or did you ask them all only by telephone? 21 A. I would think the vast -- probably all of them 22 by email. Like I said, I did talk to, I think, Mr. Ford 23 once. I'm not sure, but I think it was once. And I 24 think -- or -- or may have been twice, because we also 25 talked to a person named Dillon one time, if I remember In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 242 1 THE WITNESS: Okay. 2 (Reviews exhibit.) 3 Okay. 4 BY MR. EDWARDS: 5 Q. And then here, in December of 2018, you're 6 informing the City that you're working on a 7 recommendation of what to do next? 8 A. Right. I think so, uh-huh. 9 Q. Okay. Let's move on to Exhibit 40 -- 40 -- or 10 excuse me, 35. 11 (Exhibit No. 35 marked.) 12 THE WITNESS: Okay. Okay. 13 BY MR. EDWARDS: 14 Q. This is providing a updated methodology 15 narrative. 16 A. Right, uh-huh. 17 Q. And we're now in December of 2017. 18 A. Right. 19 Q. What is the -- what is the difference between 20 the methodology that you had submitted in December of 21 2017 from the -- the prior one? 22 A. Right, that would be something Ms. Crisp would 23 have to answer. 24 Q. Okay. Then let's move on to Exhibit Number 36. 25 (Exhibit No. 36 marked.) Deposition of Tamara Crisp In Re: TracFone Wireless, Inc. November 17, 2020 206.287.9066 l 800.846.6989 1325 Fourth Avenue, Suite 1840, Seattle, Washington 98101 www.buellrealtime.com email: info@buellrealtime.com In Re: TracFone Wireless, Inc.Tamara Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC ef5a29b9-594e-44f6-bbb6-34dc74c0877c Page 2 1 A P P E A R A N C E S 2 APPEARING VIA ZOOM FOR THE APPELLANT: 3 SCOTT EDWARDS 4 GRANT S. DEGGINGER Lane Powell PC 5 1420 Fifth Avenue Suite 4200 6 Seattle, Washington 98111 206.223.7000 7 EdwardsS@LanePowell.com deggingerg@lanepowell.com 8 9 APPEARING VIA ZOOM FOR THE CITY OF RENTON: 10 KARI L. SAND 11 Ogden Murphy Wallace P.L.L.C. 901 Fifth Avenue 12 Suite 3500 Seattle, Washington 98164 13 206.447.7000 ksand@omwlaw.com 14 15 16 * * * * * 17 18 19 20 21 22 23 24 25 In Re: TracFone Wireless, Inc.Tamara Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC ef5a29b9-594e-44f6-bbb6-34dc74c0877c Page 3 1 DEPOSITION OF TAMARA CRISP 2 EXAMINATION INDEX 3 EXAMINATION BY PAGE 4 MR. EDWARDS.............................................. 4 5 6 7 EXHIBIT INDEX 8 EXHIBITS FOR IDENTIFICATION PAGE 9 48 Email from Nicholas Ford to Scott M. Edwards sent 89 November 10, 2020 10 49 March 2008 Billing Platform Sales TracFone 93 Wireless Inc. Renton Utility Users' Tax Audit 11 Audit Period -- 1/1/2007 to 5/31/2013 ** CONFIDENTIAL ** 12 50 APP Tax Report MARCH 2008 TracFone Wireless Inc. 93 Renton Utility Users' Tax Audit Audit Period -- 13 1/1/2007 to 5/31/2013 ** CONFIDENTIAL ** 16 Email from TRS to Jan Hawn and Nate Malone sent 105 14 August 8, 2017 17 Email from Jan Hawn to TRS and Nate Malone sent 136 15 August 10, 2017 51 Email from TRS to Jan Hawn and Nate Malone sent 157 16 December 8, 2017 17 18 19 20 21 22 23 24 25 In Re: TracFone Wireless, Inc.Tamara Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC ef5a29b9-594e-44f6-bbb6-34dc74c0877c Page 4 1 SPANAWAY, WASHINGTON; NOVEMBER 17, 2020 2 9:31 a.m. 3 -o0o- 4 5 TAMARA CRISP witness herein, having been 6 first duly sworn on oath, 7 was examined and testified 8 as follows: 9 10 E X A M I N A T I O N 11 BY MR. EDWARDS: 12 Q. Can you please state your name for the record, 13 spelling your last name. 14 A. Tamara Lynn Crisp. C-r-i-s-p. 15 Q. Ms. Crisp, have you ever been deposed before? 16 A. No. 17 Q. Okay. I'm going to, yeah, start by just -- and 18 I guess maybe help to reintroduce myself. My name is 19 Scott Edwards. I'm one of the lawyers representing 20 TracFone Wireless, Inc. in connection with an appeal of 21 a tax assessment prepared by Tax Recovery Services, LLC 22 on behalf of the City of Renton. Are you familiar with 23 that matter? 24 A. Yes. 25 Q. A few ground rules that we had discussed with In Re: TracFone Wireless, Inc.Tamara Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC ef5a29b9-594e-44f6-bbb6-34dc74c0877c Page 5 1 your husband's deposition a little while ago. The court 2 reporter is transcribing both my questions and your 3 answers, so it's important for both of us to wait for 4 the other one to finish before either of us speaks. So 5 if you can wait till I finish my questions, I will 6 attempt to wait to finish -- or let you finish your 7 answers so that we're not speaking over each other. Do 8 you understand that? 9 A. Yes. 10 Q. And then another item is: It's important to 11 answer verbally. The court reporter cannot interpret 12 and record nonverbal responses. Do you understand that? 13 A. Yes. 14 Q. Okay. If you do not understand or do not hear 15 the question, please let me know and I'll either 16 rephrase or repeat the question. Do you understand 17 that? 18 A. Yes. 19 Q. And I'm looking for your best, most truthful 20 answer. If you need to go back and correct something 21 later in the deposition, just let me know and we can go 22 back and -- and capture your corrected answer on the 23 transcript. Do you understand? 24 A. Yes. 25 Q. And then finally, if you -- if you need a break In Re: TracFone Wireless, Inc.Tamara Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC ef5a29b9-594e-44f6-bbb6-34dc74c0877c Page 12 1 in that. 2 Q. Let me talk about your employment background 3 after college and before you -- before Tax Recovery 4 Services was founded. 5 A. Okay. My first position actually I took... 6 engineering training positions before I graduated for -- 7 with the General Services Administration, Puget Sound 8 Naval Shipyard and Bouillon, Christofferson and Schairer 9 consulting engineers. When I graduated I was hired by 10 Bouillon, Christofferson, Schairer, and with -- when a 11 really big project came up, I switched to Boeing and I 12 worked in -- for their division of... what was it 13 called. Just a second. BCS, which is the Boeing 14 Computer Services, and I worked there for -- till 1989 15 when my son was born. He was -- it was the end of 1988 16 and he was born in the beginning of 1989. 17 Q. And then did you go back to work after that or 18 no? 19 A. No, a series of things came up with -- with 20 health problems and -- and schooling needs of my 21 children and so I ended up, I was studying -- starting 22 to study technical drafting skills that had become more 23 common for engineers to use and go back when my husband 24 opened this company and -- and hired me. Actually I'm a 25 part owner, but I started getting into this company In Re: TracFone Wireless, Inc.Tamara Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC ef5a29b9-594e-44f6-bbb6-34dc74c0877c Page 14 1 A. Only Mr. Crisp. He's the president. We're both 2 member managers by the State of Washington. 3 Q. Are either of you an employee of Tax Recovery 4 Services? 5 A. No. 6 Q. So your compensation from Tax Recovery Services 7 is limited to distributions related to your ownership 8 interest? 9 A. Yes. 10 Q. Does Tax Recovery Services have any employees? 11 A. Right now we're down to just one: Nathan Crisp, 12 an auditor. In the past we've had -- let's see, we've 13 got... We've had five other ones that I can -- oh, six. 14 Six... oh, and counting -- counting the one we have now, 15 seven. So we've always been so that we could expand and 16 contract. Because it employs, except for our son, is 17 they're all part-time. Even him, his hours go down if 18 we need to. 19 Q. Were -- who at Tax Recovery Services was 20 involved with the Renton audit of TracFone? 21 A. Right. I think Mr. Crisp is the one that 22 initiated the audit or -- and the relationship with 23 Renton. And I did the... most of the -- of course I 24 came up with the math -- methodology. I think I drafted 25 all of the most complicated emails. Mr. Crisp would In Re: TracFone Wireless, Inc.Tamara Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC ef5a29b9-594e-44f6-bbb6-34dc74c0877c Page 17 1 three exhibits to the contract: Exhibits A, B and C? 2 A. A, B and C. That's the -- the major -- on 3 this -- let me see -- let me look at C really quick, 4 refresh my mind here. 5 (Reviews exhibit.) 6 I'm pretty sure that part C has very few 7 revisions. This one had to be a Renton requirement. 8 It's for their benefit, not ours. But the A and B, 9 yeah, those are -- are the prime -- primary revisions. 10 And I'm rattling again. Sorry about that, Kate. 11 Q. Exhibit A are your standard form of exhibits to 12 contracts with cities, not just the City of Renton? 13 A. Yeah, I'm not seeing changes that I can find on 14 this Exhibit A that weren't originated by us. 15 Q. Did a lawyer assist you with respect to drafting 16 Exhibits A and B? 17 A. Well, we haven't had a company lawyer since, 18 like, 2009 or before. So to the extent that we had a 19 lawyer help us with our first couple contracts for the 20 company, then he may have said something about it, but I 21 know... Exhibit B was something that we came up with 22 when we had clients that were a little bit confused 23 about what we meant. And so we came up with that 24 without the help of a lawyer. 25 Q. Are all of Tax Recovery Services' audits In Re: TracFone Wireless, Inc.Tamara Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC ef5a29b9-594e-44f6-bbb6-34dc74c0877c Page 18 1 performed on the same type of compensation structure as 2 reflected on Exhibit B? 3 A. We do... Excuse me. Let me see if I can get 4 the terminology. 5 (Reviews exhibit.) 6 Well, let me explain the situation. When a 7 taxpayer comes and says, We grossly overpaid, we want 8 our money back, sometimes they'll hire us and it's a 9 different contract than this. It's an hourly type of a 10 situation. This contract does not cover those types of 11 audits. Other than that, we do it on a percent basis. 12 Q. Okay. So when you represent taxing authorities, 13 you charge a percentage of the tax recovered. When you 14 represent taxpayers, you charge taxpayers on an hourly 15 basis? 16 A. No, we don't represent taxpayers. Even in -- in 17 that other type of audit, the -- that we would represent 18 the City and try to figure out if the taxpayer is 19 correct in their assessment, did they deserve a refund. 20 And -- and that, of course, there would be no recovery 21 at all, it would be done for free if we didn't charge 22 hourly. 23 Q. These are situations where a taxpayer has filed 24 a refund claim with a city and the city retains Tax 25 Recovery Services to review the taxpayer's refund claim; In Re: TracFone Wireless, Inc.Tamara Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC ef5a29b9-594e-44f6-bbb6-34dc74c0877c Page 19 1 am I correct in that -- 2 A. Right. 3 Q. -- in that? 4 A. Tax refund audits, yeah. So other than that, we 5 don't do hourly. 6 Q. You had mentioned that you had reviewed invoices 7 related to 35 audits in preparation for your testimony 8 today. How many of those 35 audits involved reviews of 9 tax refund claims brought by taxpayers? 10 A. None. 11 Q. Okay. 12 A. I don't believe... Wait a minute. None that I 13 can remember. 14 Q. I'd like to direct your attention to the first 15 page of Exhibit 1, paragraph 2 titled SERVICES. Do you 16 see that paragraph? 17 A. Uh-huh. 18 Q. Beginning... or I want to direct your attention 19 to the second half of the first sentence of that 20 paragraph indicating that the contractor shall perform 21 the services, quote, In a manner consistent with the 22 accepted professional practices for other similar 23 services within the Puget Sound region. 24 Do you see that? 25 A. Yes. In Re: TracFone Wireless, Inc.Tamara Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC ef5a29b9-594e-44f6-bbb6-34dc74c0877c Page 23 1 correctly and in accordance to the law? 2 A. There were quite a few emails going back and 3 forth between TRS and the -- and the tax representative 4 for TracFone, Mr. Ford. We sent copies of the 5 applicable statutes to him. We tried to explain to them 6 how their business we felt did not preclude taxation. 7 We pointed out that they were -- what we still believe 8 very strongly, they were a telephone company. And they 9 sold their, you know, access that they had contracted 10 for to a telephone network. And it -- it wasn't having 11 any -- any traction. 12 Another thing that we do -- and we spoke on the 13 telephone with Mr. Ford and Mr. Dillon, the vice 14 president of tax at TracFone, and tried to make the same 15 points to them. We listened to their points. We got 16 nowhere, as far as I could tell. 17 We did -- also we -- we sent copies of the audit 18 to them asking for their response and what they -- 19 anything they objected to. And most -- most taxpayers 20 can help us improve the audit at that point, but the 21 problem is that TracFone appeared to be convinced that 22 they didn't owe any tax at all, so a lot of that back 23 and forth just didn't help and... so it made our job 24 really difficult. 25 We would have loved to have been able to make In Re: TracFone Wireless, Inc.Tamara Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC ef5a29b9-594e-44f6-bbb6-34dc74c0877c Page 27 1 Q. Isn't it true that there are emails between TRS 2 and TracFone that relate in a single email to multiple 3 audits involving different cities? 4 A. I am not willing to discuss in this deposition 5 things outside -- 6 Q. That'd be a yes-or-no question. 7 (Inaudible due to crosstalk.) 8 THE WITNESS: -- deposition. If -- if it 9 has to do with another company, another taxpayer, 10 another city, I believe it's beyond the scope of this 11 deposition and it also could -- you know, there's 12 privacy agreements I have that I -- I'm not comfortable 13 doing that, I'm sorry. 14 BY MR. EDWARDS: 15 Q. I am not asking you to disclose any names of any 16 cities. I am asking you a yes-or-no question. Is it 17 true that some of the emails from TRS to TracFone 18 contain the names of more than one city? 19 A. If that is true, then they will be redacted 20 before they come to you. 21 Q. Okay. 22 So you will be producing, on a redacted basis, 23 all emails that relate to the Renton audit with any 24 information related to other audits redacted; am I 25 correct in understanding that? In Re: TracFone Wireless, Inc.Tamara Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC ef5a29b9-594e-44f6-bbb6-34dc74c0877c Page 28 1 A. Any information outside of the Renton-TracFone 2 audit will be removed if it's there. 3 Q. I'd like to turn your attention next to Exhibit 4 4. 5 A. Okay. 6 Q. That's Bates number 530. 7 A. Okay, got you. 8 Q. Do you recognize Exhibit 4 as an email from Tax 9 Recovery Services to -- to the City of Renton? 10 A. Yeah, I would think so. 11 Q. Who is Iwen referred to in the "to" line? 12 A. Iwen. 13 Q. Iwen, pardon me. 14 Who is Iwen, the person to whom the email is 15 directed? 16 A. She's -- what's her title? I know she was the 17 main person we were working with at first with City of 18 Renton, and she has since left the City. 19 Q. Did you ever deal directly with her yourself? 20 A. Including via email? 21 Q. Yes. 22 A. I might have worked with her on the contract. 23 Or was that Jan Hawn. I would look at the contract. 24 Whenever there's a email from Mike, they usually -- if 25 it's not really simple, you know, we have worked on it In Re: TracFone Wireless, Inc.Tamara Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC ef5a29b9-594e-44f6-bbb6-34dc74c0877c Page 29 1 together. So in that sense, yes. I might have gone 2 directly -- definitely when it comes to the contract, I 3 sign my own emails. Does that answer your question? 4 Q. I think for the time being. 5 A. Okay. 6 Q. When I look at -- at the "from" line, it shows 7 that the email address is crisp@trs-integrity.com. 8 A. Uh-huh. 9 Q. Is that a email address that is used exclusively 10 by Mr. Crisp or do both of you use a single email 11 address? 12 A. We use a single email address. 13 Q. And you had testified that many of the emails 14 that have his name at the bottom, you participated in 15 the drafting of the email; is that correct? 16 A. Yes. 17 Q. Did you participate in the drafting of Exhibit 18 4? 19 A. (Reviews exhibit.) 20 This does look like Mike here. He's the one 21 that -- that drums up business, comes up with ideas on 22 new -- new audits that we could do. So I'm not positive 23 I was part of this. I can't say positively yes or no. 24 Q. Did you have a role in identifying TracFone as a 25 potential audit target for your city clients? In Re: TracFone Wireless, Inc.Tamara Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC ef5a29b9-594e-44f6-bbb6-34dc74c0877c Page 32 1 Q. And the redacted portion on the first page and a 2 quarter reflects a report about a taxpayer who is not 3 TracFone; is that correct? 4 A. Yeah, most likely, uh-huh. 5 Q. And then beginning about the middle of page 2 is 6 the report regarding TracFone? 7 A. Yes. 8 Q. Who prepared this report? 9 A. Mike, Mike does the reports. I think at this 10 time I was checking them for errors, you know, typos and 11 stuff. But there's a lot of information, we have quite 12 a few clients. We have -- we do several pages 13 sometimes, quite a few pages on -- for each of these 14 reports. So I'm not saying they're absolutely perfect. 15 They're as close as we can get. See what actually 16 happened -- we try really hard. 17 Q. I want to start with the second paragraph. It 18 says: TRS sent an email dated June 6th, 2013 to 19 TracFone informing -- informing them that our company 20 would be conducting an audit on their company. 21 Do you see that? 22 A. Yes. Last month when I was preparing for this 23 deposition, I highlighted that -- that number 6, because 24 I knew there was a typo of some sort. And so I 25 remembered to check into that. And I want to note it In Re: TracFone Wireless, Inc.Tamara Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC ef5a29b9-594e-44f6-bbb6-34dc74c0877c Page 33 1 was a typo. They -- we -- we have no email dated June 2 6th that talks about this. We hadn't even gotten 3 permission from the City till, like, the 13th I believe 4 it was. But we got an email back from TracFone, Mr. -- 5 I don't know if I'm pronouncing it right -- Cavalieri 6 saying he had received our message and here is his email 7 about opening the audit, the -- the -- his email 8 address. So this was in response to apparently a phone 9 call message. So the word "email" and it must have been 10 a phone call message around June 16th, not June 6th, 11 because Mr. Cavalieri's response, as it says down here, 12 was June 20th, 2013. So it was probably off ten days 13 and -- and it must have been a telephone message. I 14 cannot find this email. If it was an email, it's been 15 lost, because I -- I can't find this email. It must 16 have been a telephone call that opened the audit. 17 Q. Let me explore a different possibility. 18 A. Okay. 19 Q. I'll observe that there's no reference to the 20 City of Renton in this sentence. Is it possible that on 21 June 6th of 2013 TRS sent an email to TracFone relating 22 to the commencement of an audit with -- on behalf of one 23 or more other cities? 24 MS. SAND: Object to the extent -- wait. 25 Excuse me. In Re: TracFone Wireless, Inc.Tamara Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC ef5a29b9-594e-44f6-bbb6-34dc74c0877c Page 38 1 Turns out that that was the number that -- that Mike 2 remembered. He is good at remembering numbers. And so 3 we can send you a copy of that too if you like, but we 4 just recently figured out that -- and we renamed it so 5 that it would be not the same name as the one that was 6 sent with audit papers. You have less interest on -- on 7 the one that we -- we sent with the tax assessment. 8 Q. We will get to those schedules a little bit 9 later. Based on the email, I made the assumption -- and 10 I'm asking you to tell me whether my assumption was 11 correct or not -- that all of the schedules were 12 prepared using the software program LibreOffice. Is 13 that correct? 14 A. We -- yeah, we don't have Microsoft Office on 15 our computers. We use LibreOffice, but we can save them 16 as Excel files. So some of them were saved as 17 LibreOffice files, the early ones. And then as we 18 started getting to the point where we thought it was 19 accurate enough to start sending out, we saved it as an 20 Excel file. So that's why it had that name, you know, 21 Excel in there to remind us that this -- these have been 22 saved as Excel files. 23 Q. Okay. I'm going to move back to the topic of 24 the request for producing the entire audit file and -- 25 and exploring what are the component parts of an audit In Re: TracFone Wireless, Inc.Tamara Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC ef5a29b9-594e-44f6-bbb6-34dc74c0877c Page 43 1 A. Yes. 2 Q. And you created no record of the research that 3 you performed other than whatever is reflected on the 4 face of the Excel schedules? 5 A. Yeah, I think you've noticed that it's not our 6 practice to write things down and transfer them again. 7 We would have a -- a... an Excel file, you know, for the 8 schedules and we would look things up and we would write 9 them on that file right straight from our research to 10 our Excel spreadsheet or LibreOffice spreadsheet. It 11 would just go directly on there. And if we wanted to 12 double-check, we would open that spreadsheet and compare 13 it to some new information, whether it was from Renton 14 or another site, to make sure it was accurate. There 15 would be no -- no scratch pad there. 16 I mean, we might have -- sometimes I'll have 17 scratch paper and I'll just scratch a number down, but 18 it's not something that I could share and save. It's 19 something that would be worth saving if it's not even 20 labeled what it is. 21 Q. Continuing on with the question of what a audit 22 file consists of. Would it consist of any contracts 23 received from the taxpayer relevant to the business 24 that's being audited? 25 A. Yes. In Re: TracFone Wireless, Inc.Tamara Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC ef5a29b9-594e-44f6-bbb6-34dc74c0877c Page 44 1 Q. Did TRS request any contracts from TracFone 2 during the course of its audit? 3 A. No. 4 Q. Do you understand an audit file to include the 5 research performed by the auditor in conducting the 6 audit? 7 A. Only if it's written down. You can't contain 8 what went into our heads. 9 Q. Are there any other categories of records that 10 we have not yet talked about that you would consider to 11 be part of an audit file? 12 A. Not that I can think of. 13 MR. EDWARDS: We've been going for about an 14 hour and nearly 20 minutes here. This is probably a 15 good time for a short break for everybody. And 16 Mrs. Crisp and Kari, I leave it to you whether this 17 should be a five-minute or ten-minute break. 18 MS. SAND: What would you prefer, Tamara, 19 five or ten minutes? 20 THE WITNESS: Oh, five or ten, I didn't hear 21 that. Whatever works. Would you like five -- oh, let's 22 do ten. 23 MR. EDWARDS: Okay. So let's break for 24 five -- for ten minutes. 25 THE WITNESS: Mr. Edwards. In Re: TracFone Wireless, Inc.Tamara Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC ef5a29b9-594e-44f6-bbb6-34dc74c0877c Page 56 1 A. Okay. 2 Q. The... Did Mr. Crisp review this before it went 3 to Renton? 4 A. I believe he did. 5 Q. Did he call out the fact that the tax is not a 6 utility usage tax and it is not imposed on usage? 7 A. No, he didn't. 8 Q. Okay. 9 You sent it to Renton in June of -- on June 30th 10 of 2017. Did Renton make any comment about the -- the 11 methodology that you sent to them? 12 A. No, they did not. 13 Q. I'm going to move down now to the fourth 14 paragraph that -- that has an indent here. It starts, 15 Estimation of non-direct sales, and has in parentheses, 16 sold through outside carriers. 17 Do you see that? 18 A. Yes, and I would like to apologize for the use 19 of the word "carriers". It's one -- we're supposed to 20 call them retail stores. 21 Q. And did you learn that from Mr. Ashpaugh -- 22 A. Yeah, he -- 23 Q. -- in conversation with him last week? 24 A. Because the word "carrier," you know, I was 25 using it generically. It's very confusing for an audit In Re: TracFone Wireless, Inc.Tamara Crisp - Vol. II 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 93d49372-fdc7-4796-b302-1bd02a0b74a3 Page 238 1 the document. Do you see the Bates numbering on your 2 screen? 3 A. Yes. 4 Q. Okay. 5 A. Are you talking to me? 6 Q. Yes, I am. 7 A. Okay. 8 Q. This whole process is going to be me asking you 9 questions and you answering my questions. 10 A. (Laughter). 11 Q. So, Mrs. Crisp, I'm showing you -- I'm directing 12 you to what's been marked as Exhibit B which I'm also 13 sharing on my screen right now. Do you recognize this 14 document? 15 A. Yes. 16 Q. Is this a document that you prepared? 17 A. Yes. 18 Q. We received this document in connection with 19 this case in the -- it was a -- a Word document when we 20 received it. Did you prepare the Word document? 21 A. Yes. 22 Q. How did you prepare the Word document? What did 23 you do to create this document? 24 A. I copied the emails between TracFone and myself 25 with the time and date stamp, and I combined them into a In Re: TracFone Wireless, Inc.Tamara Crisp - Vol. II 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 93d49372-fdc7-4796-b302-1bd02a0b74a3 Page 239 1 Word document. I -- I redacted any business that had to 2 do with anything outside of the Renton audit and so 3 that... so that it would be available to you. 4 Q. Okay. When I look at the first page here at the 5 top, yeah, there is a -- the -- the name John Cavalieri 6 and then a email address. And then below that the next 7 line says To: Crisp@trs-integrity.com, and then there's 8 a date of Thursday, June 20th, 2013, at 3:02 p.m. Do 9 you see that? 10 A. Uh-huh. 11 Q. I notice that there's not a... There's not a 12 subject matter line here or in any of the other emails 13 that are reflected in this document. What happened to 14 the subject lines? 15 A. I didn't copy them. 16 Q. Why not? 17 A. I guess I was just focusing on content. I -- I 18 didn't think they were necessary. 19 Q. So what we've got is just excerpts from the body 20 of the emails, not the entirety of the emails; is that 21 correct? 22 A. Well, I believe they're the entirety of the 23 emails except the subject line and they are -- you know, 24 minus any redactions that had to be made for privacy 25 issues. In Re: TracFone Wireless, Inc.Tamara Crisp - Vol. II 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 93d49372-fdc7-4796-b302-1bd02a0b74a3 Page 240 1 Q. One of the things that reflects on an email when 2 there are attachments is the word "attachment" and the 3 name of the documents that were attached. In addition 4 to not having copied the subject line, you also did not 5 copy the attachment lines, did you? 6 A. Apparently I... I guess those would have been 7 below the email itself at the very bottom. 8 Q. Did you copy the attachment lines or did you not 9 copy? 10 A. No, I didn't. So you needed the subject line? 11 I'm writing this down. Line, subject line and the -- 12 and the attachment line is what you wanted? I can see 13 how that would have been really helpful. I'm sorry. 14 Q. When we look at this first email on the first 15 page of the -- in the second line of the body it says: 16 Per your message you will provide a letter from the, and 17 there's a bracket, the word city, and another bracket. 18 A. Uh-huh. 19 Q. Are you the one that put the brackets in in this 20 document? 21 A. Yes, you can assume in the whole document any 22 time you see brackets I -- that was part of my 23 redacting. 24 Q. Can you describe the -- the process that you 25 used with respect to the -- the creation of brackets? In Re: TracFone Wireless, Inc.Tamara Crisp - Vol. II 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 93d49372-fdc7-4796-b302-1bd02a0b74a3 Page 241 1 A. Okay. I'm going to try to put this into 2 process. I would read the -- the email. If I saw 3 business or hints of business outside of this Renton 4 audit, I would put in brackets. I would adjust the word 5 to the closest word I could to keep it in the Renton 6 audit, and only referred to the Renton audit. And so if 7 I had to, you know, adjust a word, it would go inside 8 the bracket. Anything outside the brackets was already 9 there. And anything that's not part of the audit, the 10 Renton audit, would be removed with brackets showing 11 something was removed. 12 Q. So there's no bracket showing that you removed 13 the subject line, and there's no bracket -- 14 (Inaudible due to crosstalk.) 15 THE WITNESS: -- right there. Except in, 16 you know, they do appear in -- if you go down the email 17 chain, they appear there, but the original audit, like 18 if there's a reply to this in this part of the email 19 chain. 20 BY MR. EDWARDS: 21 Q. Well, let's -- let's test that. The very first 22 email here there's no subject line; correct? 23 A. Right. 24 Q. If we go down to the second email from TRS to 25 JCavalieri, there's no subject line there either; right? In Re: TracFone Wireless, Inc.Tamara Crisp - Vol. II 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 93d49372-fdc7-4796-b302-1bd02a0b74a3 Page 242 1 A. Right. 2 Q. Okay. If we go to the top of the next page, 3 this is a email to TRS copying CDillon. Again there's 4 no subject line; correct? 5 A. Right. 6 Q. And if we go down to the next one below that, 7 there's again no subject line; correct? 8 A. Uh-huh. 9 Q. There are well over a hundred emails in this 10 document. There -- I think there is maybe one email 11 which is actually an email from the City that is 12 embodied in the body of an email that I believe is the 13 only place where there is a subject line. 14 A. No, I can find you other subject lines. Would 15 you like me -- 16 Q. Well, we just looked at six emails none of which 17 have subject lines; correct? 18 A. If I felt that the email train was part of what 19 that email was about, I -- I -- I went ahead and copied 20 that again, and they show up there. But, I mean, I -- 21 I'll admit, I didn't do the subject line, so that -- 22 that was a problem on my part. I didn't even think 23 that -- that that would be a problem. 24 (Inaudible due to crosstalk.) 25 BY MR. EDWARDS: In Re: TracFone Wireless, Inc.Tamara Crisp - Vol. II 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 93d49372-fdc7-4796-b302-1bd02a0b74a3 Page 243 1 Q. Listen to my questions and answer my questions. 2 Did you remove the subject line from emails so that it 3 had not been produced, yes or no? 4 A. All -- it's not a yes-or-no question. I -- 5 first of all, I did not remove the subject lines. I 6 just didn't copy them. 7 Q. Okay. 8 A. Secondly, you will find subject lines in -- in 9 email trails, but that's not sufficient obviously. I 10 should have done it for all of them. I apologize. If I 11 need to redact this and improve it, I'm very much 12 willing to figure it out. 13 Q. Are there brackets to reflect that you have 14 redacted the subject line? 15 A. No, I just didn't copy them so there was no 16 reason to redact. 17 Q. So what else have you not copied that we don't 18 know you didn't copy because there's nothing on the face 19 of this document to tell us that you chose not to copy 20 it? 21 A. I'm sorry, I did whole emails without the 22 subject line. That's consistent except in the email 23 train where the subject lines will appear, you can see 24 them later. But other than that, I neglected to copy 25 that, and apparently you also wanted the attachment In Re: TracFone Wireless, Inc.Tamara Crisp - Vol. II 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 93d49372-fdc7-4796-b302-1bd02a0b74a3 Page 244 1 lines, and I neglect to do that. I'm really on a 2 learning curve here. I've never been part of a legal 3 proceeding. I've never been asked to produce -- I mean, 4 all these years, never been asked to produce an audit 5 file. And I -- you know, I wish I could have had the -- 6 the understanding I have now when I started, but I just 7 didn't and it seems like I'm constantly making mistakes, 8 and I apologize. 9 Q. The question was: What else did you not copy 10 and also not put in brackets to indicate that you had 11 not copied? 12 A. To my knowledge, you have everything, you know, 13 except those -- those two. Unless you can show me I did 14 differently, I didn't remove anything that I didn't show 15 brackets. That was my intention and that's -- that's 16 how I did it. That was my process. 17 Q. Okay. 18 So if we look at this first bracket and it has 19 the word "city", is it your testimony that that is -- 20 that bracket is only replacing a single word? 21 A. I -- I put in brackets where I had to remove 22 content. Whether it's one word or many words, the 23 brackets just basically say content has been removed 24 here and the word I put in there is as close to what 25 would -- what the email would have said had there not In Re: TracFone Wireless, Inc.Tamara Crisp - Vol. II 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 93d49372-fdc7-4796-b302-1bd02a0b74a3 Page 245 1 been other business involved. So the... You know, it's 2 meant -- meant to obscure the other business, but I'm 3 not taking out things that have to do with the Renton 4 audit. 5 Q. It's -- it's possible that the word "city" here 6 could be a substitute for a single word. It's also 7 possible that the word city here could be replacing 8 several lines of text; is that correct? 9 A. Yeah, I think that that possibility is there 10 because in other emails there might be quite a bit that 11 had to do with something outside the Renton audit that 12 had to be removed. And I didn't... I -- I -- I say I 13 don't -- apologize for removing content that is not part 14 of the -- of the Renton audit. And as in this case, 15 whatever did have to do with the Renton audit was put in 16 a form that would most closely reflect what would have 17 been there had there been no other audit. 18 Q. But we have no way of being able to even 19 visually discern how much of the content of the text has 20 either been removed or altered; is that correct? 21 A. Yes, that is correct, except that you actually 22 have these emails and you can double-check me and find 23 out if I did it wrong or if there's something 24 objectionable. You can double-check me. But this is 25 the best I can do. We're doing, you know, this on the In Re: TracFone Wireless, Inc.Tamara Crisp - Vol. II 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 93d49372-fdc7-4796-b302-1bd02a0b74a3 Page 246 1 Renton audit. I am not going to expose other business 2 in the Renton audit file. 3 Q. I'm not asking you to expose other business. 4 I'm asking you questions about the process that you used 5 to create this document and trying to get clarity about 6 how much content was removed and altered from the actual 7 documents that were used to create this document. 8 A. Okay. 9 Q. When you produced this document to us, one of 10 the other things that was also produced was a zip file 11 that was titled Attachments. What was included in that 12 zip file? 13 A. Well, it was my intention, and hopefully I was 14 successful in including all the attachments that -- that 15 were attached to these emails. 16 Q. And how would somebody who is looking at the -- 17 the documents in that attachment zip file be able to 18 determine which emails those documents were attached to? 19 A. You know, that's a really good point. And I 20 would suppose if I had thought of and even known I could 21 copy the attachment line on these emails, I -- I'm not 22 sure it's possible, so I can try if you need that. But 23 if I had put those attachment lines in, then you could 24 have seen which attachments went to which, wouldn't 25 it -- wouldn't you? In Re: TracFone Wireless, Inc.Tamara Crisp - Vol. II 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 93d49372-fdc7-4796-b302-1bd02a0b74a3 Page 260 1 they were a telephone company? 2 A. I -- I was able to find three. 3 Q. What are you looking at when you tell me that? 4 A. I -- I wrote down the -- I knew you were going 5 to ask me where I got those, so I wrote down the dates 6 so that you would have them. 7 Q. What dates did you write down? 8 A. September 24th, 2014, and December 17th, 2014 -- 9 oh, that was just a phone call, Mr. Dillon and Ford. 10 There's actually kind of a good write-up of some of the 11 things I remembered we talked about that would -- are in 12 that what we call the documentation sheet. I think Kari 13 labeled it the... monthly status reports. And then 14 December 7th -- oh, that's the phone call, and December 15 11th, 2015. 16 Q. I would like to send you -- you to send me a 17 copy of whatever document it is that you're reading 18 from. 19 A. Pardon me? 20 Q. I would like you to send me a copy of whatever 21 document it is that you just read those dates off of. 22 A. Okay. 23 MS. SAND: Mr. Edwards, would you like her 24 to just hold it up to the camera also? 25 MR. EDWARDS: I think it's on her computer 1 Nate Malone From:Jan Hawn <jhawn@rentonwa.gov> Sent:Thursday, September 21, 2017 4:08 PM To:'TRS' Cc:Nate Malone Subject:RE: TracFone audit Thank you, Mike. I trust your judgment as how to best handle this, so I am fine with you not meeting with Mr. Ford and his attorney. If you need our legal counsel to be involved at some point in the future, please let us know. From: TRS [mailto:crisp@trs‐integrity.com]   Sent: Thursday, September 21, 2017 3:49 PM  To: Jan Hawn <JHawn@Rentonwa.gov>  Subject: TracFone audit  Hi Jan, Hope things have been going well for you. We were contacted again by Mr. Ford of TracFone asking TRS to meet with him and his attorney to discuss the audit. We believe that this would not be a good idea. TRS, not being a law firm, would be at a disadvantage. Also, it is the policy of TRS not to meet with taxpayer's legal representatives without the client's legal representative. In addition, he seems to be more concerned about whether or not some or all of their business activity is taxable than how we came up with the methodology or the tax estimates. There are some other things that are happening concerning utility audits that may help this audit that we are not able to discuss right now due to non-disclosure agreements signed by our company, so if it is okay with you, we would like to hold off a little while on this audit until we see how things turn out. Let us know if this is okay with you and if you have any questions. Thanks Jan. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. 000683 1 Edwards, Scott M. From:Erin M. Kelly <ekelly@omwlaw.com> Sent:Monday, May 4, 2020 4:34 PM To:Edwards, Scott M.; Degginger, Grant Cc:Kari L. Sand; Leslie Clark; Nate Malone Subject:RE: TracFone Wireless, Inc Administrative Appeal - City of Renton Audit File  CAUTION: This is an external email. Do NOT click links or open attachments unless you are certain the content is  safe.    Good afternoon all,    Further to my recent email, I need to clarify in case there is any confusion. These documents in the sharefile comprise  the City of Renton’s audit file.    I apologize for not being clearer in my initial email.    Thank you,    Erin M. Kelly | Municipal Legal Assistant Ogden Murphy Wallace P.L.L.C. 901 Fifth Avenue, Suite 3500 Seattle, WA 98164 phone: 206.447.7000 | Fax 206.447.0215 ekelly@omwlaw.com | www.omwlaw.com CONFIDENTIAL COMMUNICATION - This communication constitutes an electronic communication within the meaning of the Electronic Communications Privacy Act, 18 U.S.C. Section 2510, and its disclosure is strictly limited to the recipient intended by the sender. It may contain information that is proprietary, privileged, and/or confidential. If you are not the intended recipient, any disclosure, copying, distribution, or use of any of the contents is STRICTLY PROHIBITED. If you have received this message in error, please notify the sender immediately and destroy the original transmission and all copies.   From: Erin M. Kelly   Sent: Monday, May 4, 2020 4:24 PM  To: edwardsS@LanePowell.com; DeggingerG@LanePowell.com  Cc: Kari L. Sand <ksand@omwlaw.com>; Leslie Clark <LClark@Rentonwa.gov>; Nate Malone <NMalone@Rentonwa.gov>  Subject: TracFone Wireless, Inc Administrative Appeal ‐ City of Renton Files    Good afternoon,    On behalf of Kari Sand, please find the following sharefile link containing the City of Renton files:    https://omwlaw.sharefile.com/home/shared/fo8e540c‐9421‐4165‐90db‐fd984f0bbba5    If you have not used Sharefile before, please find the following instructions:     Once a file has been shared with the user, the user will receive an email to register initially with the email  address that will be used to share/receive the file;  2  The user must set the password   The user will be sent a separate link once the Sharefile has been shared by the other person, which will take  them directly to the shared file.    If you experience any issues with the link or if you want to add other users, please let me know.     Thank you,    Erin M. Kelly | Municipal Legal Assistant Ogden Murphy Wallace P.L.L.C. 901 Fifth Avenue, Suite 3500 Seattle, WA 98164 phone: 206.447.7000 | Fax 206.447.0215 ekelly@omwlaw.com | www.omwlaw.com CONFIDENTIAL COMMUNICATION - This communication constitutes an electronic communication within the meaning of the Electronic Communications Privacy Act, 18 U.S.C. Section 2510, and its disclosure is strictly limited to the recipient intended by the sender. It may contain information that is proprietary, privileged, and/or confidential. If you are not the intended recipient, any disclosure, copying, distribution, or use of any of the contents is STRICTLY PROHIBITED. If you have received this message in error, please notify the sender immediately and destroy the original transmission and all copies.   From:mail@sf-notifications.com on behalf of Erin Kelly To:Edwards, Scott M. Subject:Erin Kelly has shared the folder "City of Renton Audit File - First Batch" with you. Date:Tuesday, June 30, 2020 4:00:54 PM CAUTION: This is an external email. Do NOT click links or open attachments unless you are certain the content is safe. Erin Kelly has shared the folder City of Renton Audit File - First Batch with you. Note From Erin: I've added you to a folder >Click here to view this folder ShareFile is a tool for sending, receiving, and organizing your business files online. It can be used as a password-protected area for sharing information with clients and partners, and it's an easy way to send files that are too large to e-mail. Trouble with the above link? You can copy and paste the following URL into your web browser: https://omwlaw.sharefile.com/f/foe16eab-547f-4ece-9c12-66dc494328f5 Powered By Citrix ShareFile 2020 From:mail@sf-notifications.com on behalf of Kenya Owens To:Edwards, Scott M. Subject:Kenya Owens has shared the folder "TracFone Audit File- Second Batch" with you. Date:Friday, July 31, 2020 4:16:28 PM CAUTION: This is an external email. Do NOT click links or open attachments unless you are certain the content is safe. Kenya Owens has shared the folder TracFone Audit File- Second Batch with you. Note From Kenya: I've added you to a folder >Click here to view this folder ShareFile is a tool for sending, receiving, and organizing your business files online. It can be used as a password-protected area for sharing information with clients and partners, and it's an easy way to send files that are too large to e-mail. Trouble with the above link? You can copy and paste the following URL into your web browser: https://omwlaw.sharefile.com/f/fod13b6f-54e6-4819-ab56-128a30b0cc1e Powered By Citrix ShareFile 2020 From:Degginger, Grant To:TRS Cc:Edwards, Scott M.; Kari L. Sand Subject:RE: Rescheduling the phone call Date:Wednesday, January 13, 2021 6:04:31 PM Tamara, We were disappointed that you did not participate in the call that Kari Sand set up yesterday. Please copy Scott and Kari on any response. 1. As discussed at your second deposition, you need to produce complete copies of all correspondence to and from TracFone. Despite having the better part of a year to accomplish this, you have not done so. The way to correct this deficiency and preserve confidentiality of your other clients is to convert each email to an individual PDF and redact only the names of other TRS clients (or other words that would disclose the identity – as opposed to the existence of – any other TRS client). It is not permissible to alter any words in the emails. Period. Making changes such as altering the word “cities” to read “city” is not a “redaction” and is not permissible. 2. Schedules. You have produced in multiple batches of electronic copies of schedules that have the same name but different content. For example you have produced multiple files titled “ExcelPrelim3Renton Tracfone.xls” that assert different amounts of interest due. After the second day of your deposition, you produced files with the titles “ExcelPrelim3Renton TracFoneA.xls” and ExcelPrelim3Renton TracFone (higher interest)AA.xls” which appear to have the same content, including the same interest amount, as some of the prior produced files without any A or AA in the document name. It is unclear when documents were renamed and how many different versions of draft schedules were prepared. We need you to specify when each version was created by date. We need you to provide the documents in the form specified above no later than Monday January 18th. We are running out of both time and patience.     GRANT S. DEGGINGER Shareholder Bio | vCard deggingerg@lanepowell.com D 206.223.7390 C 206.484.8154 LANEPOWELL.COM From: TRS <crisp@trs-integrity.com>  Sent: Tuesday, January 12, 2021 12:13 PM To: Degginger, Grant <DeggingerG@LanePowell.com> Subject: Re: Rescheduling the phone call   CAUTION: This is an external email. Do NOT click links or open attachments unless you are certain the content is safe.   Hi Scott and Grant, I am sorry, but I cannot talk with you today. I am also sorry that you are unwilling to give these questions in writing so that I would be able to give you accurate and complete answers to your concerns. I will spend some time going over my depositions and see if there are any questions written in there that I have not answered, and obtain from Kari what she thinks that you are wanting to know. Once I have information in hand regarding what I believe are your questions, we can talk. And if you change your mind and want to give the questions to me ahead of time that you want answers to during the phone call, you can still send them on to me. I think you will be pleased with the efficiency and accuracy resulting in my understanding your concerns beforehand and my having time to address them adequately. Sincerely, Tamara This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. On Tuesday, January 12, 2021, 09:08:39 AM PST, Degginger, Grant <deggingerg@lanepowell.com> wrote: Tamara, We think a conversation will be a better format for getting our questions answered. See you at 1. GRANT S. DEGGINGER Shareholder Bio | vCard deggingerg@lanepowell.com D 206.223.7390 C 206.484.8154 LANEPOWELL.COM From: TRS <crisp@trs-integrity.com> Sent: Monday, January 11, 2021 5:30 PM To: Edwards, Scott M. <EdwardsS@LanePowell.com>; Degginger, Grant <DeggingerG@LanePowell.com> Cc: Kari L. Sand <ksand@omwlaw.com> Subject: Rescheduling the phone call CAUTION: This is an external email. Do NOT click links or open attachments unless you are certain the content is safe. Hi Scott and Grant, I was talking with Kari, and asking her how I could prepare for the phone call tomorrow, and it sounds like I am going to have to do some research to get you definitive answers to your questions. Can you put as many of your questions for the phone call as possible into an email and send them on to me so that I can get to the facts you are needing for each issue? For instance, if you are seeing missing emails, please list them for me so I can look into the situation. If I can resolve your concerns about them to your satisfaction, perhaps I won't have to go meticulously through the 186 pages of emails I sent you, comparing them to the ones in our email folders, to see if there are any I missed. But if it turns out that there are missing emails I should have sent to you that are found, then I will need to check thoroughly to see if I missed any you haven't found. If you send your questions and concerns in written form, I can respond to each one as thoroughly as possible, and you can receive correct information that way. If you can get the questions and concerns to me right away, I will try to be ready to talk to you by Thursday, January 21, at 1:00, or sooner if I won't need to do as much research as I am anticipating. Thanks, Tamara This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. This message is private or privileged. If you are not the person for whom this message is intended, please delete it and notify me immediately, and please do not copy or send this message to anyone else. TracFone TRS Renton More Emails 1-17-21 Re: NDAs Sent • TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Thu, Nov 7, 2013 at 4:20 PM Hi John, The email date was June 28th. Also, we perform audits for many cities, and we have been contracted by the City of Tukwila to do work for them. They have asked us to do an audit on TracFone for them. We will send you an agent/engagement letter. We will also send the City of Tukwila a copy of the NDA similar to the one that we have used for the other cities. I think you are right, that it would probably be better to wait until we get all of the NDAs signed before you start gathering information. We have been working with the various cities to get the signed NDAs. We will try to get them signed by these cities as soon as possible. Thanks John. Let me know if you have any questions. Mike From: John Cavalieri <JCAVALIERI@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Thursday, November 7, 2013 1:53 PM Subject: RE: NDAs Mike,   Would you kindly tell me the date of the email you requested the info for the Renton audit. I have not started the gathering of any info. Would probably be more efficient to do after all NDA’s are signed.   Thank you, John   John F. Cavalieri | Sr. Manager, Tax | TracFone Wireless, Inc. | O: 305.715.6578 | F: 305.418.2696 | jcavalieri@TracFone.com   From: TRS [mailto:crisp@trs-integrity.com] Sent: Tuesday, November 05, 2013 3:00 PM To: John Cavalieri Subject: NDAs   Hi John, Hope things have been going well with you. I have talked with the City of Burien and they should be sending me a signed copy of the Non-Disclosure Agreement (NDA) soon. I will let you now if they have any questions. Also, we are still waiting for the NDAs for Spokane and Federal Way, as soon as we get them, we will send them to you. Also, have you had a chance to look at the information we need for the Renton audit. Or are you going to wait to get all of the NDAs before you start pulling the information. Let me know if you have any questions. Thanks John. Mike Federal Way NDA Sent • TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Thu, Dec 12, 2013 at 3:33 PM Hi John,  Here is the NDA for the City of Federal Way.  After it has been signed, could you send us a copy? Also, how are the other cities coming along with the signatures (Renton, Burien and Spokane)? Let me know if you have any questions. Have a great day. Thanks John. Mike •racFone NDA Federal Way0001.pdf 556kB NDAs Inbox • John Cavalieri <jcavalieri@tracfone.com> To:crisp@trs-integrity.com Cc:CDillon@tracfone.com Tue, Dec 24, 2013 at 8:10 AM Mike,   The same is true for Burien and Spokane. They did not sign the approved NDAs which were initialed by our legal dept on each page. Please have these municipality sign the NDAs provided in the 9/16/13 email. They are attached again here for your convenience. The only municipality that signed the correct NDA is Renton. I will have one prepared and initialed for Tukwila to sign.   Thank you, John   John F. Cavalieri | Sr. Manager, Tax  | TracFone Wireless, Inc. | O: 305.715.6578 | F: 305.418.2696 |  jcavalieri@TracFone.com    From: John Cavalieri Sent: Tuesday, December 24, 2013 10:59 AM To: 'TRS' Cc: Chesley Dillon Subject: RE: Federal Way NDA   Mike,   The NDA you attached or Federal Way is not the one initialed on each page by our legal dept. Please have the attached signed by Federal Way which was provided in the email of 9/16/13   Thank you, John   John F. Cavalieri | Sr. Manager, Tax  | TracFone Wireless, Inc. | O: 305.715.6578 | F: 305.418.2696  | jcavalieri@TracFone.com   From: TRS [mailto:crisp@trs-integrity.com] Sent: Thursday, December 12, 2013 6:33 PM To: John Cavalieri Subject: Federal Way NDA   Hi John,    Here is the NDA for the City of Federal Way.  After it has been signed, could you send us a copy?   Also, how are the other cities coming along with the signatures (Renton, Burien and Spokane)?   Let me know if you have any questions.   Have a great day.   Thanks John.   Mike         <<                 City of Spokane, Tax Recovery, and TF NDA - Sept. 2013.pdf      (737.5KB)                 City of Federal Way, Tax Recovery, TF NDA - Sept. 2013.pdf      (737.4KB)                 City of Renton, Tax Recovery, and TF NDA - Sept. 2013.pdf        (737.2KB)                 City of Burien, TracFone, and Tax Recovery NDA - Sept. 2013.pdf          (738.3KB)                 (2.9MB)         >> City of Spokane, Tax Recovery, and TF NDA - Sept. 2013.pdf 734kB •City of Burien, TracFone, and Tax Recovery NDA - Sept. 2013.pdf 734.8kB •@ Re: NDAs Sent • TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Thu, Dec 26, 2013 at 2:13 PM Hi John, We are working on the NDAs and will be getting back with you. Also, let us know if you have any more questions on the waiver forms. Hope you had a great Christmas. Thanks John, Mike From: John Cavalieri <JCAVALIERI@tracfone.com> To: TRS <crisp@trs-integrity.com>  Cc: Chesley Dillon <CDillon@tracfone.com>  Sent: Tuesday, December 24, 2013 8:08 AM Subject: NDAs ----- Forwarded Message ----- Mike,   The same is true for Burien and Spokane. They did not sign the approved NDAs which were initialed by our legal dept on each page. Please have these municipality sign the NDAs provided in the 9/16/13 email. They are attached again here for your convenience. The only municipality that signed the correct NDA is Renton. I will have one prepared and initialed for Tukwila to sign.   Thank you, John   John F. Cavalieri | Sr. Manager, Tax  | TracFone Wireless, Inc. | O: 305.715.6578 | F:  305.418.2696 | jcavalieri@TracFone.com    From: John Cavalieri Sent: Tuesday, December 24, 2013 10:59 AM To: 'TRS' Cc: Chesley Dillon Subject: RE: Federal Way NDA   Mike,   The NDA you attached or Federal Way is not the one initialed on each page by our legal dept. Please have the attached signed by Federal Way which was provided in the email of 9/16/13   Thank you, John   John F. Cavalieri | Sr. Manager, Tax  | TracFone Wireless, Inc. | O: 305.715.6578 | F:  305.418.2696 | jcavalieri@TracFone.com   From: TRS [mailto:crisp@trs-integrity.com] Sent: Thursday, December 12, 2013 6:33 PM To: John Cavalieri Subject: Federal Way NDA   Hi John,    Here is the NDA for the City of Federal Way.  After it has been signed, could you send us a copy?   Also, how are the other cities coming along with the signatures (Renton, Burien and Spokane)?   Let me know if you have any questions.   Have a great day.   Thanks John.   Mike << City of Spokane, Tax Recovery, and TF NDA - Sept. 2013.pdf (737.5KB) City of Federal Way, Tax Recovery, TF NDA - Sept. 2013.pdf (737.4KB) City of Renton, Tax Recovery, and TF NDA - Sept. 2013.pdf (737.2KB) City of Burien, TracFone, and Tax Recovery NDA - Sept. 2013.pdf (738.3KB) (2.9MB) >> Non-Disclosure Agreement (NDA) Sent • TRS <crisp@trs-integrity.com> To:JCAVALIERI@tracfone.com Tue, Feb 18, 2014 at 4:59 PM Hi John, Here is the signed NDA for the City of Burien. Let me know if you have any questions. I believe this is the last one. Also, let me know if you have any questions with the information we requested for the audit. Thanks John. Have a great day. Mike •2SigndTracFoneBurien.pdf RE: Non-Disclosure Agreement (NDA) Inbox • John Cavalieri <jcavalieri@tracfone.com> To:crisp@trs-integrity.com Fri, Feb 21, 2014 at 1:47 PM The NDAs are now all in for signature.    By-the way, I never  received the contract between you and Tukwila.  Please send.   I also never received a letter of intent to audit directly from Tukwila or Renton.  Please send as well.    Thank you, John   John F. Cavalieri | Sr. Manager, Tax  | TracFone Wireless, Inc. | O: 305.715.6578 | F: 305.418.2696 | jcavalieri@TracFone.com    From: TRS [mailto:crisp@trs-integrity.com]  Sent: Tuesday, February 18, 2014 8:00 PM To: John Cavalieri Subject: Non-Disclosure Agreement (NDA)   Hi John,   Here is the signed NDA for the City of Burien.     Let me know if you have any questions.  I believe this is the last one.     Also, let me know if you have any questions with the information we requested for the audit.   Thanks John.   Have a great day.   Mike Re: 6/23/15 Spokane Submittals Sent • TRS <crisp@trs-integrity.com> To:nford@tracfone.com Mon, Jul 6, 2015 at 2:09 PM Thanks, Nicolas. Hope you had a great 4th of July. We are looking forward to receiving the information. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Monday, July 6, 2015 7:24 AM Subject: RE: 6/23/15 Spokane Submittals Hi Mike – the first part of your question below is still being worked on, as we are just coming out of our month- end closing.   Please see my response to the second part, which I had previously sent to you on 6/25.   I’ll continue forwarding the data for the cities, including Burien.       Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.        From: TRS [mailto:crisp@trs-integrity.com]  Sent: Tuesday, June 30, 2015 8:32 PM To: Nicholas Ford Subject: 6/23/15 Spokane Submittals   Hi Nicholas, Hope all is well with you. Also, wanted to check and see if you had a chance to look at the email that we sent to you (see below). Let us know if you have any questions. Thanks Nicholas. Have a great evening. Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com>  Sent: Wednesday, June 24, 2015 4:38 PM Subject: 6/23/15 Spokane Submittals   Hi Nicholas, Hope all is well with you. Thank you for the Spokane information you have been sending. We have been going through the information, and we have some initial questions: -On the Billing Platform sheets. First, in the Tax 911 column, is this the State-only tax, or the State plus county tax for this zip? Second, what is the Amount column for? Third, how is this amount related to the 911 tax? We see there is a regular mathematical relationship, but since 911 is calculated on a per line monthly charge, where do the values in the Amount column come from?   -In an email dated October 21, 2014, you mentioned that you were in the process of pulling State-wide data for the audit, but we never received this. It looks like we will need to see your combined Excise State of Washington tax returns, one from each year of the audit; for each, please send the month of June.   My October 21, 2014 e-mail indicated that I was pulling State-wide data in connection with a WA State excise tax audit, in which case there would be overlap in the data where the local cities such as Spokane, WA is concerned.  That said, it is our position that Spokane’s taxing authority is limited to Spokane’s city limits, and that there is no power to request WA State-wide data.   We would take the same position regarding the other WA cities under audit as well.   Please reply to the questions and requests above as soon as possible, as Spokane is anxious to see progress on this audit.   Also, we are still reviewing the items that were requested on the audit and will get back with you.   Thank Nicholas.   Mike Re: TracFone-Federal Way, WA Utility Users' Tax Audit -- Jan. 1 2008 to Dec. 31 2008 -- Utility Users' Tax Returns Sent • TRS <crisp@trs-integrity.com> To:nford@tracfone.com Mon, Jul 28, 2014 at 1:24 PM Hi Nicholas, Thanks for the tax returns. Let us know if you have any questions with any of the information that was requested for the audit. Have a great afternoon. Mike From: Nicholas Ford <nford@tracfone.com> To: "crisp@trs-integrity.com" <crisp@trs-integrity.com>  Sent: Monday, July 28, 2014 8:44 AM Subject: TracFone-Federal Way, WA Utility Users' Tax Audit -- Jan. 1 2008 to Dec. 31 2008 --  Utility Users' Tax Returns Hi Mike -- In regard to your TracFone-Federal Way, Washington State Utility Users' Tax Audit, please find attached to this e-mail a zip file containing TracFone’s Telephone Utility Users’ Tax Returns for the January 1, 2008 to December 31, 2008 period.      * Federal Way, Washington State Utility Users' Tax Returns for the remaining periods under audit will be sent under separate e-mails.*   Regards,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com   Tax Returns and information for the audit Sent • TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Sep 4, 2014 at 2:38 PM Hi Nicholas, Hope things have been going good for you. Thanks for all of the utility tax returns.  It looks like we just have the City of Tukwila and Burien left for the returns.  Also, I wanted to check and see how things are coming along with the other information that we requested for the audit and the information mentioned below.  The cities have asked me to prepare updates for them to let them know how things are coming along. Let me know if you have any questions.   Have a great day. Mike From: TRS <crisp@trs-integrity.com> To: "nford@tracfone.com" <nford@tracfone.com>  Sent: Friday, June 20, 2014 2:58 PM Subject: TracFone: Key issues regarding municipal taxation of calling cards Hi Nicholas, It was good talking with you. We also wanted to ask you a few questions concerning the telephone prepaid cards:    How does TracFone keep track of sales and revenue? Does TracFone source calls at all? How does TracFone keep record of calls and minutes used? Does TracFone break calls and revenues down geographically, i.e. jurisdictionally? Does TracFone keep track of the primary residence of the customers (primary place of use)?   This would include both pre-paid calling cards and recharges. Also, it is our understanding that TracFone has several brands (telephone cards) that they sell.  These include: TracFone, Net10, StraightTalk, Simple Mobile, Telcel America. If there are any other brands, please include those also with the information that we have requested for the audit. Lastly, we have checked with the cities of Renton, Tukwila and Burien and they would like to go ahead and extend the audit out to May 31, 2014. At this point, it would also probably be good to extend Federal Way out to May 31, 2014, too The City of Spokane would like to exten the audit out to March 31, 2014.  By doing it this way, your company will not have to go back and prepare all of these month's tax returns yourself to catch up, and we can bring everything current as much as possible.     At this point, we will not need any additional information due to the extensions. Let me know if you have any questions concerning the items above or any questions on the information that was requested for the audit. Thanks Nicholas.  We look forward to working with you on these audits. Have a great weekend. Mike     This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  6/23/15 Spokane Submittals Sent • TRS <crisp@trs-integrity.com> To:nford@tracfone.com Wed, Jun 24, 2015 at 4:38 PM Hi Nicholas, Hope all is well with you. Thank you for the Spokane information you have been sending. We have been going through the information, and we have some initial questions: -On the Billing Platform sheets. First, in the Tax 911 column, is this the State-only tax, or the State plus county tax for this zip? Second, what is the Amount column for? Third, how is this amount related to the 911 tax? We see there is a regular mathematical relationship, but since 911 is calculated on a per line monthly charge, where do the values in the Amount column come from? -In an email dated October 21, 2014, you mentioned that you were in the process of pulling State-wide data for the audit, but we never received this. It looks like we will need to see your combined Excise State of Washington tax returns, one from each year of the audit; for each, please send the month of June. Please reply to the questions and requests above as soon as possible, as Spokane is anxious to see progress on this audit. Also, we are still reviewing the items that were requested on the audit and will get back with you. Thank Nicholas. Mike Thanks, Nicolas. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  RE: 6/23/15 Spokane Submittals Inbox • Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Thu, Jun 25, 2015 at 10:36 AM Hi Mike – I am looking at the 1st segment of your questions below, with the aim of providing feedback next week.  Please note that our V.P. of Tax is out of the office until Monday, June 29th.      Regarding the 2nd segment of your question, my October 21, 2014 e-mail indicated that I was pulling State-wide data in connection with a WA State excise tax audit, in which case there would be overlap in the data where the local cities such as Spokane, WA is concerned.  That said, it is our position that Spokane’s taxing authority is limited to Spokane’s city limits, and that there is no power to request WA State-wide data.   We would take the same position regarding the other WA cities under audit as well.   Regards,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.            From: TRS [mailto:crisp@trs-integrity.com]  Sent: Wednesday, June 24, 2015 7:38 PM To: Nicholas Ford Subject: 6/23/15 Spokane Submittals   Hi Nicholas, Hope all is well with you. Thank you for the Spokane information you have been sending. We have been going through the information, and we have some initial questions: -On the Billing Platform sheets. First, in the Tax 911 column, is this the State- only tax, or the State plus county tax for this zip? Second, what is the Amount column for? Third, how is this amount related to the 911 tax? We see there is a regular mathematical relationship, but since 911 is calculated on a per line monthly charge, where do the values in the Amount column come from?   -In an email dated October 21, 2014, you mentioned that you were in the process of pulling State-wide data for the audit, but we never received this. It looks like we will need to see your combined Excise State of Washington tax returns, one from each year of the audit; for each, please send the month of June.   Please reply to the questions and requests above as soon as possible , as Spokane is anxious to see progress on this audit.   Also, we are still reviewing the items that were requested on the audit and will get back with you.   Thank Nicholas.   Mike Thanks, Nicolas.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. NOTE: The response to the July 6, 2015 email from TracFone cannot be found on my server, but it is preserved in the email chain below our reply on July 6.. Re: 6/23/15 Spokane Submittals Sent • TRS <crisp@trs-integrity.com> To:nford@tracfone.com Mon, Jul 6, 2015 at 2:09 PM Thanks, Nicolas. Hope you had a great 4th of July. We are looking forward to receiving the information. Have a great afternoon. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Monday, July 6, 2015 7:24 AM Subject: RE: 6/23/15 Spokane Submittals Hi Mike – the first part of your question below is still being worked on, as we are just coming out of our month- end closing.   Please see my response to the second part, which I had previously sent to you on 6/25.   I’ll continue forwarding the data for the cities, including Burien.       Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.  From: TRS [mailto:crisp@trs-integrity.com]  Sent: Tuesday, June 30, 2015 8:32 PM To: Nicholas Ford Subject: 6/23/15 Spokane Submittals   Hi Nicholas, Hope all is well with you. Also, wanted to check and see if you had a chance to look at the email that we sent to you (see below). Let us know if you have any questions. Thanks Nicholas. Have a great evening. Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com>  Sent: Wednesday, June 24, 2015 4:38 PM Subject: 6/23/15 Spokane Submittals   Hi Nicholas, Hope all is well with you. Thank you for the Spokane information you have been sending. We have been going through the information, and we have some initial questions: -On the Billing Platform sheets. First, in the Tax 911 column, is this the State-only tax, or the State plus county tax for this zip? Second, what is the Amount column for? Third, how is this amount related to the 911 tax? We see there is a regular mathematical relationship, but since 911 is calculated on a per line monthly charge, where do the values in the Amount column come from?   -In an email dated October 21, 2014, you mentioned that you were in the process of pulling State-wide data for the audit, but we never received this. It looks like we will need to see your combined Excise State of Washington tax returns, one from each year of the audit; for each, please send the month of June.   My October 21, 2014 e-mail indicated that I was pulling State-wide data in connection with a WA State excise tax audit, in which case there would be overlap in the data where the local cities such as Spokane, WA is concerned.  That said, it is our position that Spokane’s taxing authority is limited to Spokane’s city limits, and that there is no power to request WA State-wide data.   We would take the same position regarding the other WA cities under audit as well.   Please reply to the questions and requests above as soon as possible, as Spokane is anxious to see progress on this audit.   Also, we are still reviewing the items that were requested on the audit and will get back with you.   Thank Nicholas.   Mike   Re: TracFone-Renton, WA Utility Users' Tax Audit -- Retail (Direct) Sales Summary Reports -- FOR DECEMBER 2009 Sent • TRS <crisp@trs-integrity.com> To:nford@tracfone.com Wed, Jul 29, 2015 at 5:21 PM Hi Nicholas, Hope things are going well with you. Did you get a chance to review the information that we requested in a previous email: -On the Billing Platform sheets. First, in the Tax 911 column, is this the State-only tax, or the State plus county tax for this zip? Second, what is the Amount column for? Third, how is this amount related to the 911 tax? We see there is a regular mathematical relationship, but since 911 is calculated on a per line monthly charge, where do the values in the Amount column come from? -In an email dated October 21, 2014, you mentioned that you were in the process of pulling State-wide data for the audit, but we never received this. It looks like we will need to see your combined Excise State of Washington tax returns, one from each year of the audit; for each, please send the month of June. Also, I wanted to check and see how Federal Way's information is coming along. We will be out of the office until early next week.  In case of an emergency, you can contact n.crisp@trs-integrity.com. Thanks Nicholas. Have a great weekend. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Wednesday, July 29, 2015 8:48 AM Subject: TracFone-Renton, WA Utility Users' Tax Audit -- Retail (Direct) Sales Summary Reports -- FOR  DECEMBER 2009 Hi Mike – in connection with the TracFone-Renton, WA Utility Users' Tax Audit, please find attached the Company’s retail (direct) sales summary reports for the  December 2009   audit month.   It should be noted that TracFone does notearn revenue in the City of Renton, Washington.   **Additional data relating to the remaining audit periods for Burien are forthcoming in separate e-mails.**   Thanks,     Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.    TracFone-Renton Utility Users' Tax Audit -- Responses to Questions Inbox • Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Thu, Aug 13, 2015 at 8:07 AM Hi Mike – below are responses to several of the questions regarding Renton, WA that we had received in respect to the ongoing Utility Users' Tax Audit. Ø  A list of all revenue figures by account category earned in Washington State for each year of the audit. ·         It is our position that Renton’s taxing authority is limited to the city limits of Renton, and that there is no power to request Washington State-wide data. Ø  Information on how TracFone Wireless sources calls. ·         TracFone does not source calls. Ø  Information on how TracFone Wireless keeps record of calls and minutes used. ·         TracFone does not own or operate any telephone facilities. Rather, it resells airtime purchased from third party carriers. The company receives some limited information about calls from the carriers. Ø  Information on how TracFone Wireless breaks calls and revenues down geographically, i.e. jurisdictionally. If they only break them down state-wise, show how this is done. ·         TracFone does not break calls down geographically, and the information received from carriers provides a limited ability to do so. We have some ability to identify redemption of airtime geographically and do so using the zip code assigned to the handset upon activation. Ø  Information on whether TracFone Wireless keeps track of the primary residence of the customers (primary place of use). ·         TracFone does not utilize primary place of use (PPU).   Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |   nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above. Re: TracFone-Renton Utility Users' Tax Audit -- Responses to Questions Sent • TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Aug 13, 2015 at 2:00 PM Hi Nicholas, Thanks for the email.  We will review your answers and get back with you.    Also, do you know how soon it will be when you will be able to get back with us concerning the email that was sent on July 29th (see below)?  -On the Billing Platform sheets. First, in the Tax 911 column, is this the State-only tax, or the State plus county tax for this zip? Second, what is the Amount column for? Third, how is this amount related to the 911 tax? We see there is a regular mathematical relationship, but since 911 is calculated on a per line monthly charge, where do the values in the Amount column come from? Let us know if you have any questions. Have  a good afternoon. Mike From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Thursday, August 13, 2015 7:57 AM Subject: TracFone-Renton Utility Users' Tax Audit -- Responses to Questions Hi Mike – below are responses to several of the questions regarding Renton, WA that we had received in respect to the ongoing Utility Users' Tax Audit. Ø  A list of all revenue figures by account category earned in Washington State for each year of the audit. ·         It is our position that Renton’s taxing authority is limited to the city limits of Renton, and that there is no power to request Washington State-wide data. Ø  Information on how TracFone Wireless sources calls. ·         TracFone does not source calls. Ø  Information on how TracFone Wireless keeps record of calls and minutes used. ·         TracFone does not own or operate any telephone facilities.  Rather, it resells airtime purchased from third party carriers.  The company receives some limited information about calls from the carriers. Ø  Information on how TracFone Wireless breaks calls and revenues down geographically, i.e. jurisdictionally. If they only break them down state-wise, show how this is done. ·         TracFone does not break calls down geographically, and the information received from carriers provides a limited ability to do so. We have some ability to identify redemption of airtime geographically and do so using the zip code assigned to the handset upon activation. Ø  Information on whether TracFone Wireless keeps track of the primary residence of the customers (primary place of use). ·         TracFone does not utilize primary place of use (PPU).   Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.  Fw: TracFone-Kennewick Utility Users' Tax Audit -- Responses to Questions Sent • TRS <crisp@trs-integrity.com> To:nford@tracfone.com Wed, Oct 14, 2015 at 3:58 PM Hi Nicholas, Hope things are good for you. Also checking in to see how things are coming along with the questions that we sent to you on August 27th. Let us know if you have any questions. Thanks Nicholas. Mike ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com>  Sent: Monday, October 5, 2015 2:59 PM Subject: TracFone-Kennewick Utility Users' Tax Audit -- Responses to Questions Hi Nicholas, Hope things have been going well with you. I also wanted to check and see if you have had a chance to answer our question below that we sent on August 27th. Let us know if you have any questions. Thanks Nicholas. Have a great afternoon. Mike ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com>  Sent: Tuesday, September 15, 2015 2:39 PM Subject: Fw: TracFone-Kennewick Utility Users' Tax Audit -- Responses to Questions Hi Nicholas, Hope all is well with you. I also waned to check and see if you have had a chance to answer the question that we sent to you below. Let us know if you have any questions. Thanks Nicholas. Have a great afternoon. Mike ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com>  Sent: Thursday, August 27, 2015 12:47 PM Subject: Re: TracFone-Kennewick Utility Users' Tax Audit -- Responses to Questions Hi Nicholas, Below you say "We have some ability to identify redemption of airtime geographically and do so using the zip code assigned to the handset upon activation ." Would you please explain what ability you have to identify airtime redemption geographically by zip?  Thanks, Mike From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Thursday, August 13, 2015 8:04 AM Subject: TracFone-Kennewick Utility Users' Tax Audit -- Responses to Questions Hi Mike – below are responses to several of the questions regarding Kennewick, WA that we had received in respect to the ongoing Utility Users' Tax Audit. Ø  A list of all revenue figures by account category earned in Washington State for each year of the audit. ·         It is our position that Kennewick’s taxing authority is limited to the city limits of Kennewick, and that there is no power to request Washington State-wide data. Ø  Information on how TracFone Wireless sources calls. ·         TracFone does not source calls. Ø  Information on how TracFone Wireless keeps record of calls and minutes used. ·         TracFone does not own or operate any telephone facilities.  Rather, it resells airtime purchased from third party carriers.  The company receives some limited information about calls from the carriers. Ø  Information on how TracFone Wireless breaks calls and revenues down geographically, i.e. jurisdictionally. If they only break them down state-wise, show how this is done. ·         TracFone does not break calls down geographically, and the information received from carriers provides a limited ability to do so. We have some ability to identify redemption of airtime geographically and do so using the zip code assigned to the handset upon activation. Ø  Information on whether TracFone Wireless keeps track of the primary residence of the customers (primary place of use). ·         TracFone does not utilize primary place of use (PPU).   Thanks,     Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com   TracFone-City of Burien, Washington Telephone Utility Tax Audit -- Attachments: March 2012 Sample Period Reconciliation -- Customer Transaction-Level Inbox • Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Thu, Feb 25, 2016 at 3:16 PM Hi Mike -- in connection with the City of Burien, Washington Telephone Utility Tax Audit, please find attached the customer transaction-level detail files for the March 2012 Sample Period for reconciliation purposes.   The brands associated with the transactions are also shown in each of the attached files.   Note:  the customer transaction-level detail files for the remaining sample months related to the other WA cities under audit are forthcoming in separate e-mails.   Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |   nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.   Download all attachments as a zip file •20160225 - TracFone-Burien WA Audit March 2012 APPT Transaction Detail.xlsx 44kB •20160225 - TracFone-Burien WA Audit March 2012 BP Transaction Detail.xlsx 30.7kB •20160225 - TracFone-Burien WA Audit March 2012 PhonesTransaction Detail.xlsx 14.6kB Re: TracFone-City of Federal Way, Washington Telephone Utility Tax Audit -- Attachments: November 2014 Sample Period Reconciliation -- Customer Transa Sent • TRS <crisp@trs-integrity.com> To:nford@tracfone.com Thu, Mar 10, 2016 at 12:50 PM Thanks Nicholas for all of the emails.  We are reviewing them and will get back with you. We also wanted to check and see how things are coming along with our second question (on the email that we sent to you on December 11th) concerning whether or not all of the retail store revenues are included in the revenues that you sent to us, and if they are, can you send us information for each month that we are currently reviewing to verifying that this is occurring?   Let us know if you have any questions. Thanks Tony. Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Monday, March 7, 2016 11:33 AM Subject: TracFone-City of Federal Way, Washington Telephone Utility Tax Audit -- Attachments: November 2014 Sample Period Reconciliation -- Customer Transaction-Level Detail Files   Hi Mike -- in connection with the City of Federal Way, Washington Telephone Utility Tax Audit, please find attached the customer transaction-level detail files for the  November 2014 Sample Period for reconciliation purposes.   The brands associated with the transactions are also shown in each of the attached files.   Note:  the customer transaction-level detail files for the remaining sample months related to the other WA cities under audit are forthcoming in separate e-mails.   Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.    •Fw: TracFone-City of Federal Way, Washington Telephone Utility Tax Audit -- Attachments: November 2014 Sample Period Reconciliation -- Customer Transa Sent • TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Mar 18, 2016 at 1:30 PM Hi Nicholas, We are just about done reviewing the emails that you sent to us and will be responding to you soon. Also, I wanted to check and see how things are coming along with the second part of our email below.  Let us know if you have any questions. Thanks Nicholas. Have a great afternoon. Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com>  Sent: Thursday, March 10, 2016 12:50 PM Subject: Re: TracFone-City of Federal Way, Washington Telephone Utility Tax Audit -- Attachments: November  2014 Sample Period Reconciliation -- Customer Transaction-Level Detail Files Thanks Nicholas for all of the emails.  We are reviewing them and will get back with you. We also wanted to check and see how things are coming along with our second question (on the email that we sent to you on December 11th) concerning whether or not all of the retail store revenues are included in the revenues that you sent to us, and if they are, can you send us information for each month that we are currently reviewing to verifying that this is occurring?   Let us know if you have any questions. Thanks Tony. Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Monday, March 7, 2016 11:33 AM Subject: TracFone-City of Federal Way, Washington Telephone Utility Tax Audit -- Attachments: November 2014 Sample Period Reconciliation -- Customer Transaction-Level Detail Files   Hi Mike -- in connection with the City of Federal Way, Washington Telephone Utility Tax Audit, please find attached the customer transaction-level detail files for the  November 2014 Sample Period for reconciliation purposes.   The brands associated with the transactions are also shown in each of the attached files.   Note:  the customer transaction-level detail files for the remaining sample months related to the other WA cities under audit are forthcoming in separate e-mails.   Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.    Re: TracFone Audit Questions - Responses Sent • TRS <crisp@trs-integrity.com> To:nford@tracfone.com Fri, Aug 26, 2016 at 1:42 PM Hi Nicholas, Thanks for the email regarding definitions.  After reviewing your definitions of the items below, we were wondering if the following are included in the revenue figures you sent to us? All sales of the category 6102 "Pay as you Go" prepaid wireless services (airtime), voice and texting related to customers in the Spokane area.  The sales of the category 6113 of Monthly Programs for prepaid wireless services (airtime), voice and texting related to customers in the Spokane area.  The sales of the category 6202 of BYOP related to customers in the Spokane area. And , if not, are part of these revenues included in the revenue figures that you sent to us?   We also need to see category 6308 revenues received for advertising (also include a copy of the contracts between ad sellers and TracFone) for advertising related to customers in the Spokane area. Thanks Nicholas. Let us know if you have any questions. Have a great day. Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Wednesday, August 17, 2016 11:12 AM Subject: RE: TracFone Audit Questions - Responses   Hi Mike – please see below responses regarding your chart of accounts related questions.  Please be aware that I should have feedback related to your questions on the retail sales, wholesale sales and airtime revenue (where I had sent you some roughly estimated percentage amounts) next week sometime.     Account Number(s)                                                   Description   6102                                                    Airtime Revenue Ø  Sales of prepaid wireless service (airtime) of  voice, data (internet), and texting  under the “Pay as you go” or “PayGo” Airtime coverage, whereby  minutes and days of service can be added as according to a customer’s needs.  Includes retail and wholesale sales (to retailers).   6112                                                    Revenue - TF Service Protection Ø  Sales of TF service protection plans, whereby customers can enroll and protect their service by receiving a 30-day service only extension if needed and add any airtime cards or minutes.   6113                                                    Revenue - Monthly Program Ø  Sales of prepaid wireless service (airtime) of voice, data (internet), and texting under the monthly plans program.  For example, monthly plans of varying periods—of up to one year—are offered.   6118                                                    Revenue - Safelink Program Ø  The Lifeline service (“Safelink”) is a program that enables low-income households to afford phone service.  In the Safelink (Lifeline) Program, TracFone gives airtime (minutes) service free-of- charge to eligible, low-income participants.  In turn, TracFone receives payments, which are reimbursements by USAC for TracFone’s participation in the Safelink program.   6202                                                    BYOP Revenue Ø  Sales of TracFone BYOP packages, which include the BYOP SIM card.  BYOP stands for Bring Your Own Phone. With TracFone's Bring Your Own Phone program, a customer can get TracFone service on their current phone.       6303                                                    Revenue – Other Ø  Miscellaneous Revenue not related to operating activity.   6305                                                    Revenue - ILD Cards Ø  Sales of international long distance (“ILD”) prepaid wireless service (airtime) of voice, data (internet), and texting.   ILD makes it easy for wireless customers to make international calls.   6306                                                    Mobile Advertising Revenue Share Ø  Tracfone owns an inventory of “spaces” that its sells to ad networks (ad resellers). TracFone’s subscribers will see ads from several companies in apps, and then the ad networks will pay Tracfone for the use of these “spaces”.     6308                                                    Revenue - Advertising Ø  See 6306 above.   Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.        From: TRS [mailto:crisp@trs-integrity.com]  Sent: Monday, August 15, 2016 3:46 PM To: Nicholas Ford Subject: Re: TracFone Audit Questions - Responses   Hi Nichols,   Hope things are going well with you and that things are starting to slow down.   Also, wanted to check and see how things are coming along with the information that we requested for the audit.   Let us know if you have any questions.   Thanks Nicholas.   Have a great afternoon.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Friday, August 5, 2016 7:35 AM Subject: RE: TracFone Audit Questions - Responses   Hi Mike – we’re just wrapping up our month end closing.  I had prepared a draft of responses to your questions and will circle back to my contact today, who was reviewing.   Thanks for your patience,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.        From: TRS [mailto:crisp@trs-integrity.com]  Sent: Thursday, August 04, 2016 6:02 PM To: Nicholas Ford Subject: Re: TracFone Audit Questions - Responses   Hi Nicholas,   Just checking to see how things are coming along with the information that we requested on June 30th and April 29th.   Let us know if you have any questions.   Thanks Nicholas.   Have a great afternoon.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com>  Sent: Thursday, July 28, 2016 5:00 PM Subject: Re: TracFone Audit Questions - Responses   Hi Nicholas,   Hope all is well with you.   I also wanted to check and see how things are coming along with the information that we requested for the audit.   Let us know if you have any questions.   Thanks Nicholas.   Have a great day.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Tuesday, July 19, 2016 2:40 PM Subject: RE: TracFone Audit Questions - Responses   Hi Mike – just a heads up that I’ve been working on your questions, however the Head of Tax and myself will be out of the office the rest of this week until Monday.  As such, I’d aim to get feedback to you sometime next week.   Thanks,     Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.        From: TRS [mailto:crisp@trs-integrity.com]  Sent: Tuesday, July 12, 2016 5:08 PM To: Nicholas Ford Subject: Fw: TracFone Audit Questions - Responses   Hi Nicholas,   Looking at our June 30 email below, we noticed that we made a typo of sorts. In item (3), we put the word "without," when we actually meant "with." Hopefully, from context, you caught our intended meaning and have been framing your reply accordingly, but just in case, we wanted to clarify.    Let us know if you have any questions.   Have a great day.   Thanks Nicholas.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com>  Sent: Friday, July 8, 2016 2:01 PM Subject: Re: TracFone Audit Questions - Responses   Hi Nicholas,   Hope everything is going great for you.   Also, wanted to check and see how things are coming along with the email below and if you have any questions.   Thanks Nicholas.   Have a great weekend.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com>  Sent: Thursday, June 30, 2016 4:08 PM Subject: Re: TracFone Audit Questions - Responses   Hi Nicolas,   Thanks for the information you sent. It is very helpful for us to understand the terminology used inside your company.   Regarding the calculations you sent us to back up the 30%, this is a good start, but we do have a few further questions.    1) If all of the Direct Sales Amount is "retail," and all of the Airtime Revenue is "wholesale," then, to find what percentage of total sales are Direct Sales, it looks like to me that we should add Direct and Airtime and divide Direct by the sum. Using this method, we arrive at 23.6% and 25.9%.   2) You are dividing two numbers, one is the Direct Sales Amount, and the other is the Airtime Revenue. We were wondering: are you dividing two things that are similar enough to compare? It seems that Direct Sales would include more than just airtime revenue, probably including handset sales and internet? So could you give a definition of each one, including what components they contain?   3) We were looking at the monthly reports you sent a while back, and the amounts from earlier years were so very much smaller than the amounts for more current years, yet company profits appeared high. Has the percentage of sales (comparing ones made without using another retailer to ones being done directly by TracFone) changed significantly over the years? At this point, it looks like we will need to see the figures used for calculating the percentages for each year, rather than just for a few recent years.  Could you send us this information?   Also, let us know if you have any questions concerning the April 29th email that we sent to you.   Thanks Nichols for all of your help.   Have a great 4th of July weekend.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Tuesday, June 28, 2016 12:25 PM Subject: RE: TracFone Audit Questions - Responses     Hi Mike – please see my responses below to your questions (per your 6/24 e-mail):   (1)   What is Internet (APP)?   Ø  The Alternative Payment Plan (“APP”) is TracFone’s credit card transaction interface for retail sales.  Under the APP, customers engage in one-time credit card based transactions via the internet or phone.   APP based customer transactions are consummated predominantly via the internet.  Furthermore, any TracFone plan program which is not available to be set up for an automated-recurring charge gets processed through APP.    (2)    What is Billing Platform?   Ø  The Billing Platform (“BP”) is a supplement to the Alternative Payment Plan (“APP”) to provide a system for automated-recurring charges.  Customers can make a one-time purchase or enroll into programs available for automated or recurring charges, most of which include airtime on a monthly (30 day) basis.    Based on the above, both APP and Billing Platform are internet-based credit card transaction interfaces for executing TracFone’s customers’ retail purchases—except that Billing Platform provides for recurring charges whereas APP allows customers to engaged in one-time credit card transactions.   (3)      Retail Sales Comprise Roughly 30% of TracFone’s sales.     Below shows the breakdown for 2013 and 2014, for example.     2013 Direct Sales Amounts (Per Accum. Summary Reports for '13) Company-Wide         1,658,066,825   31%Retail Sales Percentage Airtime Revenue (Per Financial Statements)Company-Wide      5,358,559,000  69% Wholesale Sales Percentage 2014 Direct Sales Amounts (Per Accum. Summary Reports for '14)Company-Wide         2,144,494,356   35%Retail Sales Percentage Airtime Revenue (Per Financial Statements)Company-Wide      6,126,893,000  65% Wholesale Sales Percentage   Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.      From: TRS [mailto:crisp@trs-integrity.com]  Sent: Friday, June 24, 2016 4:35 PM To: Nicholas Ford Subject: Re: TracFone Audit Questions - Responses Hi Nicholas,   Thanks for your responses.  After reviewing your reports again we want to make sure we understand what each report is showing, so could you review with us the definition for each report below:   Platform report   APPT report   In other words, is the Billing Platform Report sales for website or phone sales or both?   And the APPT report sales would be for? The sheets say "internet," but we want to ascertain if this means that they were sales made over the internet, not sales of internet (data plans). Perhaps all of your sales are made in bundles, without breaking out data from telephone services?   In addition, do you have any back-up information for the 30 percent figure for your retail sales verses non-retail sales? We were wondering, as well, if this percent changed significantly over time?   Let us know, also, if you have any questions on the April 29 email.   Thanks Nicholas.   Have a great weekend.   Mike     This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Friday, June 24, 2016 8:06 AM Subject: RE: TracFone Audit Questions - Responses     Hi Mike – please see my responses to your questions below in bold blue font.   Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.          From: TRS [mailto:crisp@trs-integrity.com]  Sent: Tuesday, June 21, 2016 5:01 PM To: Nicholas Ford Subject: Re: TracFone Audit Questions - Responses   Hi Nicholas,   Thanks for the email, and all the clarification you provided. We do appreciate it.   I was reviewing your answers to our questions below, and I noticed that you omitted one of the questions, the one asking for a percentage of revenues that come from other stores:   ". . . could you tell us the percentage of your revenues that come from your stores versus the revenues that come from other stores?"  As indicated my original response, TracFone is a reseller of prepaid wireless service (airtime) thatneither owns any stores nor cellular facilities.  Your answers below seem to indicate that both sales from other stores (which sales TracFone does not consider "retail"), and any recharges (or what TracFone calls "refills") associated with those sales, were not included in the figures you sent us. Please verify if this is the correct understanding.  Not correct:  TracFone does not own any stores.  Refills are retail sales of airtime.  As such, customers can purchase additional airtime (refills) via the internet (i.e., TracFone’s website), and over the phone.  Refills are included in the Billing Platform and Internet Sales retail sales summary reports/figures that I had sent to you.    So could you send us the percentage breakout between your sales at your Website and by phone (which we believe you call retail) and your other sales (non-"retail," including refills or what we call recharges on the non-retail sales)?   Retail sales comprise roughly 30% of TracFone’s sales. Also, let me know if you have any questions concerning the email that we sent to you on April 29th, concerning other revenues that TracFone receives. Working on… Have a great afternoon.   Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Friday, June 17, 2016 8:34 AM Subject: RE: TracFone Audit Questions - Responses     Hi Mike – please see responses below to your questions.  *Please note that I am still reviewing your questions related to TracFone’s chart of accounts.*   Billing Platform Transaction Detail Report:  What is?:  ·         OTAPURCH -- ‘over the air’ purchase of prepaid wireless services (airtime) by a customer through the phone. ·         Enrollment --  initial (one-time) enrollment of a customer when purchasing airtime.  ·         Recurring -- using the Billing Platform, customers make a one-time purchase or enroll into programs available for recurring charges, most of which include airtime on a monthly (30 day) basis.   ·         BN Enrollment – ‘Buy Now-Airtime on Demand’ enrollment’, which allows customers to choose and buy Airtime directly from their TracFone, so that they can buy Airtime when they need it.   Also, does TracFone receive their revenues for features such as call waiting sold to their customers, or are they part of the plan when you sell your cards?   No, TracFone does not receive revenues for call waiting.  The feature is part of the airtime plan that customers purchase, thus it is not a separate charge.   After thinking about it, we had some other questions.  You mentioned below that the data that you provided to us does not include retailers such as Walmart.  So the revenue figures that you sent to us are for your own stores?  First off, TracFone is a reseller of prepaid wireless service (airtime) that neither owns any stores nor cellular facilities.  It should also be noted that TracFone does not earn revenue in Burien, Federal Way, Kennewick, Renton, Spokane, or Tukwila.   As such, the Billing Platform, Internet Sales, and Telephone Sales excel format reports that you received comprise TracFone’s retail sales amounts.  These amounts, which are all of the Company’s retail sales, are from customer purchases made via the internet (i.e., the TracFone’s website) and over the phone.     Recharges on Sales Made by Outside Stores Such as Walmart:   One more question we forgot to ask you: when you send us the revenue information that we asked about in the email below, could you also include the charges to customers who have continued to use your services (directly through your drawing funds from their credit card or bank account) after they bought a phone or calling card from one of your outside retailers (like Walmart)? We generally refer to these charges as "recharges." Or are these charges included in the figures you already sent?  Refills of airtime that a customer can purchase at retail via the internet (i.e., the TracFone’s website), and over the phone.  They are included in the Billing Platform and Internet Sales retail reports that you received.   Recharges on Sales Made by TracFone's Own Stores:   In addition, we will need to ascertain that all recharges done on accounts opened at your own stores are included somewhere in the information we are provided with, as well: are charges (associated with sales that initiated at one of your stores) for continued services which were completed by automatic withdrawals or telephone withdrawals included in the figures you sent to us? If not, we will need access to these numbers as well.   See response to question above.   Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.    From: TRS [mailto:crisp@trs-integrity.com]  Sent: Friday, June 10, 2016 3:29 PM To: Nicholas Ford Subject: TracFone Audit   Hi Nicholas,   Hope everything is going well.   Also, just checking to see how things are coming along with the information that you told us you would send to us this week.   Let us know if you have any questions.   Thanks Nicholas.   Have a great afternoon.   Mike     This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    RE: TracFone Audit Questions - Responses Inbox • Nicholas Ford <nford@tracfone.com> To:crisp@trs-integrity.com Tue, Aug 30, 2016 at 1:29 PM Hi Mike – please see my responses to your questions inserted in bold blue font below.   If you would, please provide some timeframes in the near future that would be convenient for you for purposes of sitting down with us to discuss your audits.  For example, October 2016 would work for us, with the exception of October 6th.   Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.    From: TRS [mailto:crisp@trs-integrity.com]  Sent: Friday, August 26, 2016 4:43 PM To: Nicholas Ford Subject: Re: TracFone Audit Questions - Responses   Hi Nicholas,   Thanks for the email regarding definitions.  After reviewing your definitions of the items below, we were wondering if the following are included in the revenue figures you sent to us?  As indicated in my prior e-mail communications, TracFone does not earn revenue in the City of Spokane, Washington.   All sales of the category 6102 "Pay as you Go" prepaid wireless services (airtime), voice and texting related to customers in the Spokane area. Yes. The sales of the category 6113 of Monthly Programs for prepaid wireless services (airtime), voice and texting related to customers in the Spokane area. Yes.   The sales of the category 6202 of BYOP related to customers in the Spokane area.  Yes.   And , if not, are part of these revenues included in the revenue figures that you sent to us?     We also need to see category 6308 revenues received for advertising (also include a copy of the contracts between ad sellers and TracFone) for advertising related to customers in the Spokane area.   Advertising sales arrangements take place at TracFone’s headquarters in Miami and have no connection to Spokane.    Thanks Nicholas.   Let us know if you have any questions.   Have a great day.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Wednesday, August 17, 2016 11:12 AM Subject: RE: TracFone Audit Questions - Responses   Hi Mike – please see below responses regarding your chart of accounts related questions.  Please be aware that I should have feedback related to your questions on the retail sales, wholesale sales and airtime revenue (where I had sent you some roughly estimated percentage amounts) next week sometime.     Account Number(s)                                                   Description   6102                                                    Airtime Revenue Ø  Sales of prepaid wireless service (airtime) of voice, data (internet), and texting under the “Pay as you go” or “PayGo” Airtime coverage, whereby minutes and days of service can be added as according to a customer’s needs.  Includes retail and wholesale sales (to retailers).   6112                                                    Revenue - TF Service Protection Ø  Sales of TF service protection plans, whereby customers can enroll and protect their service by receiving a 30-day service only extension if needed and add any airtime cards or minutes.   6113                                                    Revenue - Monthly Program Ø Sales of prepaid wireless service (airtime) of voice, data (internet), and texting under the monthly plans program.  For example, monthly plans of varying periods—of up to one year—are offered.   6118                                                    Revenue - Safelink Program Ø  The Lifeline service (“Safelink”) is a program that enables low-income households to afford phone service.  In the Safelink (Lifeline) Program, TracFone gives airtime (minutes) service free- of-charge to eligible, low-income participants.  In turn, TracFone receives payments, which are reimbursements by USAC for TracFone’s participation in the Safelink program.   6202                                                    BYOP Revenue Ø  Sales of TracFone BYOP packages, which include the BYOP SIM card.  BYOP stands for Bring Your Own Phone. With TracFone's Bring Your Own Phone program, a customer can get TracFone service on their current phone.       6303                                                    Revenue – Other Ø  Miscellaneous Revenue not related to operating activity.   6305                                                    Revenue - ILD Cards Ø  Sales of international long distance (“ILD”) prepaid wireless service (airtime) of voice, data (internet), and texting.   ILD makes it easy for wireless customers to make international calls.   6306                                                    Mobile Advertising Revenue Share Ø  Tracfone owns an inventory of “spaces” that its sells to ad networks (ad resellers). TracFone’s subscribers will see ads from several companies in apps, and then the ad networks will pay Tracfone for the use of these “spaces”.     6308                                                    Revenue - Advertising Ø  See 6306 above.   Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.        From: TRS [mailto:crisp@trs-integrity.com]  Sent: Monday, August 15, 2016 3:46 PM To: Nicholas Ford Subject: Re: TracFone Audit Questions - Responses   Hi Nichols,   Hope things are going well with you and that things are starting to slow down.   Also, wanted to check and see how things are coming along with the information that we requested for the audit.   Let us know if you have any questions.   Thanks Nicholas.   Have a great afternoon.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Friday, August 5, 2016 7:35 AM Subject: RE: TracFone Audit Questions - Responses   Hi Mike – we’re just wrapping up our month end closing.  I had prepared a draft of responses to your questions and will circle back to my contact today, who was reviewing.   Thanks for your patience,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.        From: TRS [mailto:crisp@trs-integrity.com]  Sent: Thursday, August 04, 2016 6:02 PM To: Nicholas Ford Subject: Re: TracFone Audit Questions - Responses   Hi Nicholas,   Just checking to see how things are coming along with the information that we requested on June 30th and April 29th.   Let us know if you have any questions.   Thanks Nicholas.   Have a great afternoon.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com>  Sent: Thursday, July 28, 2016 5:00 PM Subject: Re: TracFone Audit Questions - Responses   Hi Nicholas,   Hope all is well with you.   I also wanted to check and see how things are coming along with the information that we requested for the audit.   Let us know if you have any questions.   Thanks Nicholas.   Have a great day.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Tuesday, July 19, 2016 2:40 PM Subject: RE: TracFone Audit Questions - Responses   Hi Mike – just a heads up that I’ve been working on your questions, however the Head of Tax and myself will be out of the office the rest of this week until Monday.  As such, I’d aim to get feedback to you sometime next week.   Thanks,     Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.        From: TRS [mailto:crisp@trs-integrity.com]  Sent: Tuesday, July 12, 2016 5:08 PM To: Nicholas Ford Subject: Fw: TracFone Audit Questions - Responses   Hi Nicholas,   Looking at our June 30 email below, we noticed that we made a typo of sorts. In item (3), we put the word "without," when we actually meant "with." Hopefully, from context, you caught our intended meaning and have been framing your reply accordingly, but just in case, we wanted to clarify.    Let us know if you have any questions.   Have a great day.   Thanks Nicholas.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com>  Sent: Friday, July 8, 2016 2:01 PM Subject: Re: TracFone Audit Questions - Responses   Hi Nicholas,   Hope everything is going great for you.   Also, wanted to check and see how things are coming along with the email below and if you have any questions.   Thanks Nicholas.   Have a great weekend.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com>  Sent: Thursday, June 30, 2016 4:08 PM Subject: Re: TracFone Audit Questions - Responses   Hi Nicolas,   Thanks for the information you sent. It is very helpful for us to understand the terminology used inside your company.   Regarding the calculations you sent us to back up the 30%, this is a good start, but we do have a few further questions.    1) If all of the Direct Sales Amount is "retail," and all of the Airtime Revenue is "wholesale," then, to find what percentage of total sales are Direct Sales, it looks like to me that we should add Direct and Airtime and divide Direct by the sum. Using this method, we arrive at 23.6% and 25.9%.   2) You are dividing two numbers, one is the Direct Sales Amount, and the other is the Airtime Revenue. We were wondering: are you dividing two things that are similar enough to compare? It seems that Direct Sales would include more than just airtime revenue, probably including handset sales and internet? So could you give a definition of each one, including what components they contain?   3) We were looking at the monthly reports you sent a while back, and the amounts from earlier years were so very much smaller than the amounts for more current years, yet company profits appeared high. Has the percentage of sales (comparing ones made without using another retailer to ones being done directly by TracFone) changed significantly over the years? At this point, it looks like we will need to see the figures used for calculating the percentages for each year, rather than just for a few recent years.  Could you send us this information?   Also, let us know if you have any questions concerning the April 29th email that we sent to you.   Thanks Nichols for all of your help.   Have a great 4th of July weekend.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Tuesday, June 28, 2016 12:25 PM Subject: RE: TracFone Audit Questions - Responses     Hi Mike – please see my responses below to your questions (per your 6/24 e-mail):   (1)   What is Internet (APP)?   Ø  The Alternative Payment Plan (“APP”) is TracFone’s credit card transaction interface for retail sales.  Under the APP, customers engage in one-time credit card based transactions via the internet or phone.   APP based customer transactions are consummated predominantly via the internet.  Furthermore, any TracFone plan program which is not available to be set up for an automated-recurring charge gets processed through APP.    (2) What is Billing Platform?   Ø The Billing Platform (“BP”) is a supplement to the Alternative Payment Plan (“APP”) to provide a system for automated-recurring charges.  Customers can make a one-time purchase or enroll into programs available for automated or recurring charges, most of which include airtime on a monthly (30 day) basis.    Based on the above, both APP and Billing Platform are internet-based credit card transaction interfaces for executing TracFone’s customers’ retail purchases—except that Billing Platform provides for recurring charges whereas APP allows customers to engaged in one-time credit card transactions.   (3)      Retail Sales Comprise Roughly 30% of TracFone’s sales.     Below shows the breakdown for 2013 and 2014, for example.     2013 Direct Sales Amounts (Per Accum. Summary Reports for '13)Company-Wide         1,658,066,825 31%Retail Sales Percentage Airtime Revenue (Per Financial Statements)Company-Wide      5,358,559,000 69% Wholesale Sales Percentage 2014 Direct Sales Amounts (Per Accum. Summary Reports for '14)Company-Wide         2,144,494,356 35%Retail Sales Percentage Airtime Revenue (Per Financial Statements)Company-Wide      6,126,893,000 65% Wholesale Sales Percentage   Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.          From: TRS [mailto:crisp@trs-integrity.com]  Sent: Friday, June 24, 2016 4:35 PM To: Nicholas Ford Subject: Re: TracFone Audit Questions - Responses   Hi Nicholas,   Thanks for your responses.  After reviewing your reports again we want to make sure we understand what each report is showing, so could you review with us the definition for each report below:   Platform report   APPT report   In other words, is the Billing Platform Report sales for website or phone sales or both?   And the APPT report sales would be for? The sheets say "internet," but we want to ascertain if this means that they were sales made over the internet, not sales of internet (data plans). Perhaps all of your sales are made in bundles, without breaking out data from telephone services?   In addition, do you have any back-up information for the 30 percent figure for your retail sales verses non-retail sales? We were wondering, as well, if this percent changed significantly over time?   Let us know, also, if you have any questions on the April 29 email.   Thanks Nicholas.   Have a great weekend.   Mike     This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Friday, June 24, 2016 8:06 AM Subject: RE: TracFone Audit Questions - Responses   Hi Mike – please see my responses to your questions below in bold blue font.   Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.  From: TRS [mailto:crisp@trs-integrity.com]  Sent: Tuesday, June 21, 2016 5:01 PM To: Nicholas Ford Subject: Re: TracFone Audit Questions - Responses   Hi Nicholas,   Thanks for the email, and all the clarification you provided. We do appreciate it.   I was reviewing your answers to our questions below, and I noticed that you omitted one of the questions, the one asking for a percentage of revenues that come from other stores:   ". . . could you tell us the percentage of your revenues that come from your stores versus the revenues that come from other stores?"  As indicated my original response, TracFone is a reseller of prepaid wireless service (airtime) thatneither owns any stores nor cellular facilities.    Your answers below seem to indicate that both sales from other stores (which sales TracFone does not consider "retail"), and any recharges (or what TracFone calls "refills") associated with those sales, were not included in the figures you sent us. Please verify if this is the correct understanding.  Not correct:  TracFone does not own any stores.  Refills are retail sales of airtime.  As such, customers can purchase additional airtime (refills) via the internet (i.e., TracFone’s website), and over the phone.  Refills are included in the Billing Platform and Internet Sales retail sales summary reports/figures that I had sent to you.    So could you send us the percentage breakout between your sales at your Website and by phone (which we believe you call retail) and your other sales (non-"retail," including refills or what we call recharges on the non-retail sales)?   Retail sales comprise roughly 30% of TracFone’s sales.   Also, let me know if you have any questions concerning the email that we sent to you on April 29th, concerning other revenues that TracFone receives. Working on… Have a great afternoon.   Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Friday, June 17, 2016 8:34 AM Subject: RE: TracFone Audit Questions - Responses   Hi Mike – please see responses below to your questions.  *Please note that I am still reviewing your questions related to TracFone’s chart of accounts.*   Billing Platform Transaction Detail Report:  What is?:  ·         OTAPURCH -- ‘over the air’ purchase of prepaid wireless services (airtime) by a customer through the phone. · Enrollment --  initial (one-time) enrollment of a customer when purchasing airtime.  · Recurring -- using the Billing Platform, customers make a one-time purchase or enroll into programs available for recurring charges, most of which include airtime on a monthly (30 day) basis.   · BN Enrollment – ‘Buy Now-Airtime on Demand’ enrollment’, which allows customers to choose and buy Airtime directly from their TracFone, so that they can buy Airtime when they need it.   Also, does TracFone receive their revenues for features such as call waiting sold to their customers, or are they part of the plan when you sell your cards?   No, TracFone does not receive revenues for call waiting.  The feature is part of the airtime plan that customers purchase, thus it is not a separate charge.   After thinking about it, we had some other questions.  You mentioned below that the data that you provided to us does not include retailers such as Walmart.  So the revenue figures that you sent to us are for your own stores?  First off, TracFone is a reseller of prepaid wireless service (airtime) that neither owns any stores nor cellular facilities.  It should also be noted that TracFone does not earn revenue in Burien, Federal Way, Kennewick, Renton, Spokane, or Tukwila.   As such, the Billing Platform, Internet Sales, and Telephone Sales excel format reports that you received comprise TracFone’s retail sales amounts.  These amounts, which are all of the Company’s retail sales, are from customer purchases made via the internet (i.e., the TracFone’s website) and over the phone.     Recharges on Sales Made by Outside Stores Such as Walmart:   One more question we forgot to ask you: when you send us the revenue information that we asked about in the email below, could you also include the charges to customers who have continued to use your services (directly through your drawing funds from their credit card or bank account) after they bought a phone or calling card from one of your outside retailers (like Walmart)? We generally refer to these charges as "recharges." Or are these charges included in the figures you already sent?  Refills of airtime that a customer can purchase at retail via the internet (i.e., the TracFone’s website), and over the phone.  They are included in the Billing Platform and Internet Sales retail reports that you received.   Recharges on Sales Made by TracFone's Own Stores:   In addition, we will need to ascertain that all recharges done on accounts opened at your own stores are included somewhere in the information we are provided with, as well: are charges (associated with sales that initiated at one of your stores) for continued services which were completed by automatic withdrawals or telephone withdrawals included in the figures you sent to us? If not, we will need access to these numbers as well.   See response to question above.   Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.      From: TRS [mailto:crisp@trs-integrity.com]  Sent: Friday, June 10, 2016 3:29 PM To: Nicholas Ford Subject: TracFone Audit   Hi Nicholas,   Hope everything is going well.   Also, just checking to see how things are coming along with the information that you told us you would send to us this week.   Let us know if you have any questions.   Thanks Nicholas.   Have a great afternoon.   Mike     This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.      RE: TracFone Audit Questions Inbox • Nicholas Ford <nford@tracfone.com> To:TRS Fri, Sep 30, 2016 at 1:52 PM   Hi Mike – here is an in part response below to your audit questions referenced in your latest e-mail:   Your Question:  “In the schedule grid below, and in your explanation, are we correct in understanding that the 'retail direct' figures contain phone and accessory revenue, but since these cannot be broken out (or can they?)”  Response:   Yes, the retail sales amounts contain phone and accessory revenue and they were broken out in separate files for each of the cities under audit—i.e., ‘telephone sales’.   You had received those files some time ago in separate e-mails.  For example, containing individual files for Billing Platform Sales, Internet Sales, and Telephone Sales.   *I expect to respond to the rest of your questions once my V.P. of Tax completes his review of the answers I’ve drafted and submitted to him.*   Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.      From: TRS [mailto:crisp@trs-integrity.com]  Sent: Friday, September 23, 2016 4:53 PM To: Nicholas Ford Subject: TracFone Audit Questions Hi Nichols,   Just checking to see if you have had a chance to take a look at our questions below.   Thanks Nicholas.   Have a great weekend.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    ----- Forwarded Message ----- From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Wednesday, September 7, 2016 2:09 PM Subject: RE: TracFone Audit Questions - Responses   Hello Mike – I’ll be out of the office beginning tomorrow (9/8) and returning on Monday (9/12), at which time I can take a closer look at your questions below.   Thanks,     Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.      From: TRS [mailto:crisp@trs-integrity.com]  Sent: Wednesday, September 07, 2016 4:49 PM To: Nicholas Ford Subject: Re: TracFone Audit Questions - Responses   Hi Nicholas,   Hope you had a great holiday weekend.   Thanks for all of the information sent August 26. After studying the figures, we have some questions. In the schedule grid below, and in your explanation, are we correct in understanding that the 'retail direct' figures contain phone and accessory revenue, but since these cannot be broken out (or can they?), and since the net airtime revenue did not contain phones and accessories, you found the total phone and accessory revenue and added that into the net airtime figures, then you used this sum to come up with the percentages?   If so, this is very helpful. Now, looking at the chart you sent to us on August 17 (copied below), I am wondering how close we have come in comparing like figures to come up with percentages. Which of the revenue code categories below are included in the the Airtime revenue values you sent August 26th? And which are included in the Retail Direct revenue values sent August 26th? I know the retail direct section is labeled "airtime and phones," but, for example, there is airtime in the monthly program, but only Category 6102 is named "Airtime Revenue."   6102                                                    Airtime Revenue Ø  Sales of prepaid wireless service (airtime) of voice, data (internet), and texting under the “Pay as you go” or “PayGo” Airtime coverage, whereby minutes and days of service can be added as according to a customer’s needs.  Includes retail and wholesale sales (to retailers). 6112                                                    Revenue - TF Service Protection Ø  Sales of TF service protection plans, whereby customers can enroll and protect their service by receiving a 30-day service only extension if needed and add any airtime cards or minutes. 6113                                                    Revenue - Monthly Program Ø  Sales of prepaid wireless service (airtime) of voice, data (internet), and texting under the monthly plans program.  For example, monthly plans of varying periods—of up to one year—are offered. 6118                                                    Revenue - Safelink Program Ø  The Lifeline service (“Safelink”) is a program that enables low-income households to afford phone service.  In the Safelink (Lifeline) Program, TracFone gives airtime (minutes) service free-of-charge to eligible, low-income participants.  In turn, TracFone receives payments, which are reimbursements by USAC for TracFone’s participation in the Safelink program. 6202                                                    BYOP Revenue Ø  Sales of TracFone BYOP packages, which include the BYOP SIM card.  BYOP stands for Bring Your Own Phone. With TracFone's Bring Your Own Phone program, a customer can get TracFone service on their current phone.       6303                                                    Revenue – Other Ø  Miscellaneous Revenue not related to operating activity. 6305                                                    Revenue - ILD Cards Ø  Sales of international long distance (“ILD”) prepaid wireless service (airtime) of voice, data (internet), and texting.   ILD makes it easy for wireless customers to make international calls. 6306                                                    Mobile Advertising Revenue Share Ø  Tracfone owns an inventory of “spaces” that its sells to ad networks (ad resellers). TracFone’s subscribers will see ads from several companies in apps, and then the ad networks will pay Tracfone for the use of these “spaces”.   6308                                                    Revenue - Advertising Ø  See 6306 above.   Also, you stated that you have the ability to break out the interstate information. At what level(s) can you do this, city, state, national or company-wide?    Thanks Nicolas.   Have a great afternoon.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Friday, August 26, 2016 10:35 AM Subject: RE: TracFone Audit Questions - Responses   Hi Mike – in regard to your remaining questions, please see responses below.  As far as I can tell, in providing the information below there are no outstanding questions and/or requests for other information.  Assuming that’s the case, we are asking once again for an opportunity to meet with you—as we also requested in December 2014 to meet in January 2015—and discuss your WA local/city audits with the aim of bringing them to a resolution.  If you would, please provide some timeframes in the near future that would be convenient for you for purposes of sitting down with us to discuss your audits.  For example, October 2016 would work for us, with the exception of October 6th.   1) Your Question:  If all of the Direct Sales Amount is "retail," and all of the Airtime Revenue is "wholesale," then, to find what percentage of total sales are Direct Sales, it looks like to me that we should add Direct and Airtime and divide Direct by the sum. Using this method, we arrive at 23.6% and 25.9%. Ø   Response:  The roughly 30% (retail-direct) sales compared to the roughly 70% wholesale was just that—an estimate.  It was also based on the whole company as opposed to a particular state or city.  The net airtime revenue (per financial statements) denominator includes not only retail sales, but also wholesale sales.    2) Your Question: You are dividing two numbers, one is the Direct Sales Amount, and the other is the Airtime Revenue. We were wondering: are you dividing two things that are similar enough to compare? It seems that Direct Sales would include more than just airtime revenue, probably including handset sales and internet? So could you give a definition of each one, including what components they contain? Ø  Response:  In addition to the net airtime revenue (per financial statements) denominator, the grid below now shows a separate break-out of sales of phones & accessories sales.  The retail sales amounts (numerator) that were provided to you also include both phones & accessories sales and internet.    3) Your Question:  We were looking at the monthly reports you sent a while back, and the amounts from earlier years were so very much smaller than  the amounts for more current years, yet company profits appeared high. Has the percentage of sales (comparing ones made without using another retailer to ones being done directly by TracFone) changed significantly over the years? At this point, it looks like we will need to see the figures used for calculating the percentages for each year, rather than just for a few recent years.  Could you send us this information?    Ø  Response:  See information in schedule grid below, which serves as a basis for the estimated wholesale percentages shown.    2010 (1) Retail (Direct) Sales Amounts (Airtime & Phones) Company-Wide                                                                           486,626,850 17%Retail Sales Percentage (2) Net Airtime Revenue (Per Financial Statements)                                 2,457,761,508 (3) Net Phones & Accessories Revenue (Per Financial Statements)                                                                            341,243,351 Total (2) + (3):                                 2,799,004,859  Company-Wide 1 minus Retail Percentage =83% Wholesale Sales Percentage 2011 (1) Retail (Direct) Sales Amounts (Airtime & Phones) Company-Wide                                                                           793,674,906 21%Retail Sales Percentage (2) Net Airtime Revenue (Per Financial Statements)                                 3,433,624,000 (3) Net Phones & Accessories Revenue (Per Financial Statements)                                                                            380,952,000 Total (2) + (3):                                 3,814,576,000    Company-Wide 1 - Retail Percentage =79% Wholesale Sales Percentage 2012 (1) Retail (Direct) Sales Amounts (Airtime & Phones)Company-Wide                                                                 1,164,915,001 24%Retail Sales Percentage (2) Net Airtime Revenue (Per Financial Statements)                                 4,291,440,000 (3) Net Phones & Accessories Revenue (Per Financial Statements)                                                                            502,534,000 Total (2) + (3):                                 4,793,974,000    Company-Wide 1 - Retail Percentage =76% Wholesale Sales Percentage 2013 (1) Retail (Direct) Sales Amounts (Airtime & Phones) Company-Wide                                                                 1,658,066,825 27%Retail Sales Percentage (2) Net Airtime Revenue (Per Financial Statements)                                 5,358,599,000 (3) Net Phones & Accessories Revenue (Per Financial Statements)                                                                            676,091,000 Total (2) + (3):                                 6,034,690,000    Company-Wide 1 - Retail Percentage =73% Wholesale Sales Percentage 2014 (1) Retail (Direct) Sales Amounts (Airtime & Phones) Company-Wide                                                                 2,144,494,356 31%Retail Sales Percentage (2) Net Airtime Revenue (Per Financial Statements)                                 6,126,893,000 (3) Net Phones & Accessories Revenue (Per Financial Statements)                                                                            694,099,000 Total (2) + (3):                                 6,820,992,000    Company-Wide 1 - Retail Percentage =69% Wholesale Sales Percentage 2015 (1) Retail (Direct) Sales Amounts (Airtime & Phones) Company-Wide                                                                 2,330,936,554 33%Retail Sales Percentage (2) Net Airtime Revenue (Per Financial Statements)                                 6,279,204,000 (3) Net Phones & Accessories Revenue (Per Financial Statements)                                                                            699,462,000 Total (2) + (3):                                 6,978,666,000    Company-Wide 1 - Retail Percentage =67% Wholesale Sales Percentage   4) Your Question:  We need to know if you would be able to break out the interstate amounts for the long-distance charges. Ø  Response:  we have the ability to identify interstate amounts for total calling activity.      Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.    From: TRS [mailto:crisp@trs-integrity.com]  Sent: Wednesday, August 17, 2016 5:01 PM To: Nicholas Ford Subject: Re: TracFone Audit Questions - Responses   Thanks Nicholas.  We will review the information that you sent to us and we will let you know if we have any questions.   Have a great afternoon.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Wednesday, August 17, 2016 11:12 AM Subject: RE: TracFone Audit Questions - Responses     Hi Mike – please see below responses regarding your chart of accounts related questions.  Please be aware that I should have feedback related to your questions on the retail sales, wholesale sales and airtime revenue (where I had sent you some roughly estimated percentage amounts) next week sometime.     Account Number(s)                                                   Description   6102                                                    Airtime Revenue Ø  Sales of prepaid wireless service (airtime) of voice, data (internet), and texting under the “Pay as you go” or “PayGo” Airtime coverage, whereby minutes and days of service can be added as according to a customer’s needs.  Includes retail and wholesale sales (to retailers).   6112                                                    Revenue - TF Service Protection Ø  Sales of TF service protection plans, whereby customers can enroll and protect their service by receiving a 30-day service only extension if needed and add any airtime cards or minutes.   6113                                                    Revenue - Monthly Program Ø  Sales of prepaid wireless service (airtime) of voice, data (internet), and texting under the monthly plans program.  For example, monthly plans of varying periods—of up to one year—are offered.   6118                                                    Revenue - Safelink Program Ø  The Lifeline service (“Safelink”) is a program that enables low-income households to afford phone service.  In the Safelink (Lifeline) Program, TracFone gives airtime (minutes) service free- of-charge to eligible, low-income participants.  In turn, TracFone receives payments, which are reimbursements by USAC for TracFone’s participation in the Safelink program.   6202                                                    BYOP Revenue Ø  Sales of TracFone BYOP packages, which include the BYOP SIM card.  BYOP stands for Bring Your Own Phone. With TracFone's Bring Your Own Phone program, a customer can get TracFone service on their current phone.       6303                                                    Revenue – Other Ø  Miscellaneous Revenue not related to operating activity.   6305                                                    Revenue - ILD Cards Ø  Sales of international long distance (“ILD”) prepaid wireless service (airtime) of voice, data (internet), and texting.   ILD makes it easy for wireless customers to make international calls.   6306                                                    Mobile Advertising Revenue Share Ø  Tracfone owns an inventory of “spaces” that its sells to ad networks (ad resellers). TracFone’s subscribers will see ads from several companies in apps, and then the ad networks will pay Tracfone for the use of these “spaces”.     6308                                                    Revenue - Advertising Ø  See 6306 above.   Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.  From: TRS [mailto:crisp@trs-integrity.com]  Sent: Monday, August 15, 2016 3:46 PM To: Nicholas Ford Subject: Re: TracFone Audit Questions - Responses   Hi Nichols,   Hope things are going well with you and that things are starting to slow down.   Also, wanted to check and see how things are coming along with the information that we requested for the audit.   Let us know if you have any questions.   Thanks Nicholas.   Have a great afternoon.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Friday, August 5, 2016 7:35 AM Subject: RE: TracFone Audit Questions - Responses Hi Mike – we’re just wrapping up our month end closing.  I had prepared a draft of responses to your questions and will circle back to my contact today, who was reviewing.   Thanks for your patience,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.        From: TRS [mailto:crisp@trs-integrity.com]  Sent: Thursday, August 04, 2016 6:02 PM To: Nicholas Ford Subject: Re: TracFone Audit Questions - Responses   Hi Nicholas,   Just checking to see how things are coming along with the information that we requested on June 30th and April 29th.   Let us know if you have any questions.   Thanks Nicholas.   Have a great afternoon.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com>  Sent: Thursday, July 28, 2016 5:00 PM Subject: Re: TracFone Audit Questions - Responses   Hi Nicholas,   Hope all is well with you.   I also wanted to check and see how things are coming along with the information that we requested for the audit.   Let us know if you have any questions.   Thanks Nicholas.   Have a great day.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Tuesday, July 19, 2016 2:40 PM Subject: RE: TracFone Audit Questions - Responses   Hi Mike – just a heads up that I’ve been working on your questions, however the Head of Tax and myself will be out of the office the rest of this week until Monday.  As such, I’d aim to get feedback to you sometime next week.   Thanks,     Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.        From: TRS [mailto:crisp@trs-integrity.com]  Sent: Tuesday, July 12, 2016 5:08 PM To: Nicholas Ford Subject: Fw: TracFone Audit Questions - Responses   Hi Nicholas,   Looking at our June 30 email below, we noticed that we made a typo of sorts. In item (3), we put the word "without," when we actually meant "with." Hopefully, from context, you caught our intended meaning and have been framing your reply accordingly, but just in case, we wanted to clarify.    Let us know if you have any questions.   Have a great day.   Thanks Nicholas.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com>  Sent: Friday, July 8, 2016 2:01 PM Subject: Re: TracFone Audit Questions - Responses   Hi Nicholas,   Hope everything is going great for you.   Also, wanted to check and see how things are coming along with the email below and if you have any questions.   Thanks Nicholas.   Have a great weekend.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com>  Sent: Thursday, June 30, 2016 4:08 PM Subject: Re: TracFone Audit Questions - Responses   Hi Nicolas,   Thanks for the information you sent. It is very helpful for us to understand the terminology used inside your company.   Regarding the calculations you sent us to back up the 30%, this is a good start, but we do have a few further questions.    1) If all of the Direct Sales Amount is "retail," and all of the Airtime Revenue is "wholesale," then, to find what percentage of total sales are Direct Sales, it looks like to me that we should add Direct and Airtime and divide Direct by the sum. Using this method, we arrive at 23.6% and 25.9%.   2) You are dividing two numbers, one is the Direct Sales Amount, and the other is the Airtime Revenue. We were wondering: are you dividing two things that are similar enough to compare? It seems that Direct Sales would include more than just airtime revenue, probably including handset sales and internet? So could you give a definition of each one, including what components they contain?   3) We were looking at the monthly reports you sent a while back, and the amounts from earlier years were so very much smaller than the amounts for more current years, yet company profits appeared high. Has the percentage of sales (comparing ones made without using another retailer to ones being done directly by TracFone) changed significantly over the years? At this point, it looks like we will need to see the figures used for calculating the percentages for each year, rather than just for a few recent years.  Could you send us this information?   Also, let us know if you have any questions concerning the April 29th email that we sent to you.   Thanks Nichols for all of your help.   Have a great 4th of July weekend.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Tuesday, June 28, 2016 12:25 PM Subject: RE: TracFone Audit Questions - Responses     Hi Mike – please see my responses below to your questions (per your 6/24 e-mail):   (1)   What is Internet (APP)?   Ø  The Alternative Payment Plan (“APP”) is TracFone’s credit card transaction interface for retail sales.  Under the APP, customers engage in one-time credit card based transactions via the internet or phone.   APP based customer transactions are consummated predominantly via the internet.  Furthermore, any TracFone plan program which is not available to be set up for an automated-recurring charge gets processed through APP.    (2)    What is Billing Platform?   Ø  The Billing Platform (“BP”) is a supplement to the Alternative Payment Plan (“APP”) to provide a system for automated-recurring charges.  Customers can make a one-time purchase or enroll into programs available for automated or recurring charges, most of which include airtime on a monthly (30 day) basis.    Based on the above, both APP and Billing Platform are internet-based credit card transaction interfaces for executing TracFone’s customers’ retail purchases—except that Billing Platform provides for recurring charges whereas APP allows customers to engaged in one-time credit card transactions.   (3)      Retail Sales Comprise Roughly 30% of TracFone’s sales.     Below shows the breakdown for 2013 and 2014, for example.     2013 Direct Sales Amounts (Per Accum. Summary Reports for '13)Company-Wide         1,658,066,825   31%Retail Sales Percentage Airtime Revenue (Per Financial Statements)Company-Wide      5,358,559,000  69% Wholesale Sales Percentage 2014 Direct Sales Amounts (Per Accum. Summary Reports for '14)Company-Wide         2,144,494,356   35%Retail Sales Percentage Airtime Revenue (Per Financial Statements)Company-Wide      6,126,893,000  65% Wholesale Sales Percentage   Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.          From: TRS [mailto:crisp@trs-integrity.com]  Sent: Friday, June 24, 2016 4:35 PM To: Nicholas Ford Subject: Re: TracFone Audit Questions - Responses   Hi Nicholas,   Thanks for your responses.  After reviewing your reports again we want to make sure we understand what each report is showing, so could you review with us the definition for each report below:   Platform report   APPT report   In other words, is the Billing Platform Report sales for website or phone sales or both?   And the APPT report sales would be for? The sheets say "internet," but we want to ascertain if this means that they were sales made over the internet, not sales of internet (data plans). Perhaps all of your sales are made in bundles, without breaking out data from telephone services?   In addition, do you have any back-up information for the 30 percent figure for your retail sales verses non-retail sales? We were wondering, as well, if this percent changed significantly over time?   Let us know, also, if you have any questions on the April 29 email.   Thanks Nicholas.   Have a great weekend.   Mike     This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Friday, June 24, 2016 8:06 AM Subject: RE: TracFone Audit Questions - Responses     Hi Mike – please see my responses to your questions below in bold blue font.   Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.          From: TRS [mailto:crisp@trs-integrity.com]  Sent: Tuesday, June 21, 2016 5:01 PM To: Nicholas Ford Subject: Re: TracFone Audit Questions - Responses   Hi Nicholas,   Thanks for the email, and all the clarification you provided. We do appreciate it.   I was reviewing your answers to our questions below, and I noticed that you omitted one of the questions, the one asking for a percentage of revenues that come from other stores: ". . . could you tell us the percentage of your revenues that come from your stores versus the revenues that come from other stores?"  As indicated my original response, TracFone is a reseller of prepaid wireless service (airtime) that neither owns any stores nor cellular facilities.  Your answers below seem to indicate that both sales from other stores (which sales TracFone does not consider "retail"), and any recharges (or what TracFone calls "refills") associated with those sales, were not included in the figures you sent us. Please verify if this is the correct understanding.  Not correct:  TracFone does not own any stores.  Refills are retail sales of airtime.  As such, customers can purchase additional airtime (refills) via the internet (i.e., TracFone’s website), and over the phone.  Refills are included in the Billing Platform and Internet Sales retail sales summary reports/figures that I had sent to you.    So could you send us the percentage breakout between your sales at your Website and by phone (which we believe you call retail) and your other sales (non-"retail," including refills or what we call recharges on the non-retail sales)?   Retail sales comprise roughly 30% of TracFone’s sales. Also, let me know if you have any questions concerning the email that we sent to you on April 29th, concerning other revenues that TracFone receives.Working on… Have a great afternoon.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Friday, June 17, 2016 8:34 AM Subject: RE: TracFone Audit Questions - Responses     Hi Mike – please see responses below to your questions.  *Please note that I am still reviewing your questions related to TracFone’s chart of accounts.*   Billing Platform Transaction Detail Report:  What is?:  ·         OTAPURCH -- ‘over the air’ purchase of prepaid wireless services (airtime) by a customer through the phone. ·         Enrollment --  initial (one-time) enrollment of a customer when purchasing airtime.  ·         Recurring -- using the Billing Platform, customers make a one-time purchase or enroll into programs available for recurring charges, most of which include airtime on a monthly (30 day) basis.   ·         BN Enrollment – ‘Buy Now-Airtime on Demand’ enrollment’, which allows customers to choose and buy Airtime directly from their TracFone, so that they can buy Airtime when they need it.   Also, does TracFone receive their revenues for features such as call waiting sold to their customers, or are they part of the plan when you sell your cards?   No, TracFone does not receive revenues for call waiting.  The feature is part of the airtime plan that customers purchase, thus it is not a separate charge.   After thinking about it, we had some other questions.  You mentioned below that the data that you provided to us does not include retailers such as Walmart.  So the revenue figures that you sent to us are for your own stores?  First off, TracFone is a reseller of prepaid wireless service (airtime) that neither owns any stores nor cellular facilities.  It should also be noted that TracFone does not earn revenue in Burien, Federal Way, Kennewick, Renton, Spokane, or Tukwila.   As such, the Billing Platform, Internet Sales, and Telephone Sales excel format reports that you received comprise TracFone’s retail sales amounts.  These amounts, which are all of the Company’s retail sales, are from customer purchases made via the internet (i.e., the TracFone’s website) and over the phone.     Recharges on Sales Made by Outside Stores Such as Walmart:   One more question we forgot to ask you: when you send us the revenue information that we asked about in the email below, could you also include the charges to customers who have continued to use your services (directly through your drawing funds from their credit card or bank account) after they bought a phone or calling card from one of your outside retailers (like Walmart)? We generally refer to these charges as "recharges." Or are these charges included in the figures you already sent?  Refills of airtime that a customer can purchase at retail via the internet (i.e., the TracFone’s website), and over the phone.  They are included in the Billing Platform and Internet Sales retail reports that you received.   Recharges on Sales Made by TracFone's Own Stores:   In addition, we will need to ascertain that all recharges done on accounts opened at your own stores are included somewhere in the information we are provided with, as well: are charges (associated with sales that initiated at one of your stores) for continued services which were completed by automatic withdrawals or telephone withdrawals included in the figures you sent to us? If not, we will need access to these numbers as well.   See response to question above.   Thanks,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.  From: TRS [mailto:crisp@trs-integrity.com]  Sent: Friday, June 10, 2016 3:29 PM To: Nicholas Ford Subject: TracFone Audit   Hi Nicholas,   Hope everything is going well. Also, just checking to see how things are coming along with the information that you told us you would send to us this week.   Let us know if you have any questions.   Thanks Nicholas.   Have a great afternoon.   Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.    Re: TracFone Audit Questions Sent • TRS <crisp@trs-integrity.com> To:Nicholas Ford Fri, Sep 30, 2016 at 3:50 PM Hi Nicolas, Thanks for the response.  But the question we were asking was regarding the schedule you sent detailing the company-wide data and calculated percents (not the city-specific data). Could you take another look at the question in reference to the company-wide data on the schedule that you sent to us?  Thanks Nicolas. Have a great weekend. Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  NOTE: Email train omitted, as it is the same as the email and train above, same date and subject. TracFone Audit Questions Sent • TRS <crisp@trs-integrity.com> To:Nicholas Ford Fri, Oct 7, 2016 at 2:53 PM Hi Nicholas, Hope all is well with you. Also, just checking to see if you have had a chance to take a look at the email below and how things are coming along with the other information that you were going to send us. Let us know if you have any questions. Thanks Nicholas. Have a great weekend. Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com>  Sent: Friday, September 30, 2016 3:50 PM Subject: Re: TracFone Audit Questions Hi Nicolas, Thanks for the response.  But the question we were asking was regarding the schedule you sent detailing the company-wide data and calculated percents (not the city-specific data). Could you take another look at the question in reference to the company-wide data on the schedule that you sent to us?  Thanks Nicolas. Have a great weekend. Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  NOTE: the rest of this email train is omitted because it is the same as the last two emails on this sheet. TracFone Audit Questions Sent • TRS <crisp@trs-integrity.com> To:Nicholas Ford Fri, Oct 28, 2016 at 5:14 PM Hi Nicholas, Just checking to see if you have had a chance to look at the email below. Let us know if you have any questions. Thanks Nicholas. Have a great weekend. Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  ----- Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com>  Sent: Monday, October 17, 2016 2:12 PM Subject: Re: TracFone Audit Questions Hi Nicholas, Thanks for the chart below. Assuming that the answers you provided are for the company-wide date figures, it does look as though we are pretty much comparing like numbers; we know the Safelink program represents a tiny proportion of revenues, and other than that, the figures contain the same elements. But here are some outstanding questions:  -You told us in an earlier email that phones could be broken out of the conglomerate numbers you sent. Why did you add phones in one rather than removing them from the other? How difficult would that be to convert these to non-accessary numbers? That would be a bit more accurate, but for estimation purposes, we could also assume that the percentages would be the same for both. -Have you any more information on how to break out intrastate and interstate calls? -Can you verify for us that the answers in the chart below (October 10) refer to the company-wide figures supplied to us on August 26th? Thanks, Nicholas. We really appreciate all your work on this. Have a great afternoon. Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  NOTE: This email train is truncated because it is repeated above. Same subject line. Net vs Gross Sent • TRS <crisp@trs-integrity.com> To:Nicholas Ford Tue, Feb 21, 2017 at 2:08 PM Hi Nicholas, Hope everything is going well. Just checking to see if you have had a chance to review the questions below. Let us know if you have any questions. Thanks Nicholas. Have a great afternoon. Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  ----- Forwarded Message ----- From: TRS <crisp@trs-integrity.com> To: Nicholas Ford <nford@tracfone.com>  Sent: Thursday, February 9, 2017 2:32 PM Subject: Re: Net vs Gross Thanks, Nicholas, for the information.  We do appreciate all of your help with these audits. We will be looking forward to the before-2010 figures regarding the whole-company data. Could you also provide a more direct answer to that part of the first question regarding "gross" and "net," that reads, "And were the figures for direct sales, which are not labeled "net," inclusive of the types of revenue excluded in these numbers? If so, is there any way of correcting this situation with a percentage of "net" vs "gross" ?" Once again, here we were wondering if your numbers for city-wide sales included the same part of revenues as the company-wide sales. Are they different? And if so, what is the percentage of difference? As soon as we wrap up the audits, we can then discuss the matter with the [city] about your concerns and how they would like to move forward.  As you probably remember, the [city has] asked us to complete the audits before they would consider your request regarding any meetings. And as mentioned before, we do not plan to send out any assessments before you have had a chance to take a look at our audit schedules. Regarding Burien, we only have numbers going back as far as 2009 for the city-specific data. The audit date for this begins with 2003. Should we estimate these figures, or are you also working on obtaining this data? Thanks, and have a great day. Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Thursday, February 9, 2017 10:47 AM Subject: RE: Net vs Gross Hi Mike – please see my responses to your questions bolded in green font below.   As discussed, from our end it would be preferable to enlighten you on our business model and answer your questions in-person.   The sit down does not have to be formal in order to walk you through the workings of our business.   Regards,   Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.    From: TRS [mailto:crisp@trs-integrity.com]  Sent: Monday, January 09, 2017 5:00 PM To: Nicholas Ford Subject: Net vs Gross   Hi Nicholas, Hope you had a Happy New Year Day.   We are working on the audit tax schedules, and have 3 questions for you: 1. While working on the audit estimate spreadsheets, we noticed something that we had missed earlier. The first chart you sent to us in June showing company-wide direct sales vs. airtime revenue just labeled the airtime revenue without inserting the word "net." But the chart you sent us in August, which showed the same and additional numbers, inserted a further clarification by labeling direct airtime and phone accessories as "net."    Since these numbers are net and not gross, can you explain what was excluded from the gross to make them net? And were the figures for direct sales, which are not labeled "net," inclusive of the types of revenue excluded in these numbers? If so, is there any way of correcting this situation with a percentage of "net" vs "gross" ?   there is a revenue recognition concept involved, whereby some there are things such as deferrals, etc which are not a part of net revenue.   Net revenue is basically recognized revenue.   2. Another question. In graphing the percents of indirect vs. direct sales, we noticed a big drop between 2010 and 2011. Not sure what you mean by ‘big drop’, based on the retail vs wholesale percentages provided from 2010 to 2011 – i.e., 2010: 17% (retail), 83% (wholesale); 2011: 21% (retail), 79% (wholesale).   Was there a point when TracFone did 100% indirect sales? If so, when did that change? We are trying to figure a good way to estimate for the time before your data begins. We don't have indirect vs direct figures for earlier than 2010. Can you get those for us quickly, or should we work toward an educated estimate for this?   I’ll be working on compiling retail vs wholesale figures for earlier than 2010, and seek to provide at my earliest.   3. The direct sales data years you gave us does not always correlate with the audit period. With your permission, we can expand the audit to match the direct-sales information you have given us, and estimate the years of the audit for years you have not. Another option would be to take the audit up to the present, although this would require either more data or some additional estimation. Another option is to include only the years open on the audit, which would require another audit to be opened to bring you up to the present. Whatever you want to do is your choice and we will go with it. Let us know what way you would think would be best.  I do not give permission to alter the audit periods.  Thanks, Nicolas.   Let us know if you have any questions.   Have a great afternoon.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  Net/Gross question and information for the City of Burien Sent • TRS <crisp@trs-integrity.com> To:Nicholas Ford Tue, Mar 28, 2017 at 1:59 PM Hi Nichols, Hope all is going well. Just checking to see how things are coming along with our net/gross questions. Also, are you going to be able to provide more information for us for the City of Burien, or is the year 2008 is the furthest that you can go back? Let us know if you have any questions. Thanks Nicholas. Have a great day. Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  Re: Missing Billing Platform Sales Sent • TRS <crisp@trs-integrity.com> To:Nicholas Ford Thu, May 11, 2017 at 11:44 AM Hi Nicholas, We were wondering about when the data shows that no Billing Platform or Western Union sales are completed in a city: can you tell us what is happening in that situation?  Where all direct sales done APP at that time? It looked particularly strange in the case of Burien 7/07, which had Billing Platform sales the month before and none that month, but we looked more closely, and there are two submittals for that month, one with Billing Platform, and one without, so that's all good. Thanks Nicholas, and we will be looking forward to the Renton information you will be sending today. Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Thursday, May 11, 2017 7:14 AM Subject: RE: Missing Billing Platform Sales Hi Mike – see below   ·         Billing Platform was not in existence as a customer retail sales transaction interface until May 2007.  As such, there are no Billing Platform sales for Burien in 2006 (i.e., 4/06—12/06) or 2007 (i.e., 1/07—4/07).  For May 2007, there were no Billing Platform sales for Burien and thus you did not receive a file.   Please check your e-mail on May 2ndfor the Burien Billing Platform file for July 2007 that I sent you.     ·         Prior to the existence of the Billing Platform customer retail sales transaction interface, Western Union was being used (as well as APP) for retail sales of airtime.  And you are not correct to say that Western Union was the Billing Platform.   ·         Per my 1st bullet point, Billing Platform was not in existence to record retail sales transactions during the 1/07—4/07 period.   For May 2007, there were no Billing Platform sales for Renton.  However, I will be sending you today the Billing Platform retail sales reports for Renton for 6/07—12/07.   You can let me know if you are missing anything else.   Thanks,     Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.  From: TRS [mailto:crisp@trs-integrity.com]  Sent: Wednesday, May 10, 2017 7:38 PM To: Nicholas Ford Subject: Missing Billing Platform Sales Hi Nicholas, After reviewing the information we noticed that we are missing the Billing Platform sales for Burien: 4/06 through 12/06; 1/07 through 5/07; and 7/07. Are we correct in assuming that Western Union was the billing sales of 1/06 through 3/06? We are also missing Billing Platform sales, as you know, for Renton for all of 2007. Will you be able to get these to us right away, or will we need to estimate them?  Thanks Nicholas for checking this out for us. Have a great day.   Mike This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it. Re: Missing Billing Platform Sales Sent • TRS <crisp@trs-integrity.com> To:Nicholas Ford Thu, May 11, 2017 at 11:44 AM Hi Nicholas, We were wondering about when the data shows that no Billing Platform or Western Union sales are completed in a city: can you tell us what is happening in that situation?  Where all direct sales done APP at that time? It looked particularly strange in the case of Burien 7/07, which had Billing Platform sales the month before and none that month, but we looked more closely, and there are two submittals for that month, one with Billing Platform, and one without, so that's all good. Thanks Nicholas, and we will be looking forward to the Renton information you will be sending today. Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  From: Nicholas Ford <nford@tracfone.com> To: TRS <crisp@trs-integrity.com>  Sent: Thursday, May 11, 2017 7:14 AM Subject: RE: Missing Billing Platform Sales Hi Mike – see below   ·         Billing Platform was not in existence as a customer retail sales transaction interface until May 2007.  As such, there are no Billing Platform sales for Burien in 2006 (i.e., 4/06—12/06) or 2007 (i.e., 1/07—4/07).  For May 2007, there were no Billing Platform sales for Burien and thus you did not receive a file.   Please check your e-mail on May 2ndfor the Burien Billing Platform file for July 2007 that I sent you.     ·         Prior to the existence of the Billing Platform customer retail sales transaction interface, Western Union was being used (as well as APP) for retail sales of airtime.  And you are not correct to say that Western Union was the Billing Platform.   ·         Per my 1st bullet point, Billing Platform was not in existence to record retail sales transactions during the 1/07—4/07 period.   For May 2007, there were no Billing Platform sales for Renton.  However, I will be sending you today the Billing Platform retail sales reports for Renton for 6/07—12/07.   You can let me know if you are missing anything else.   Thanks,     Nicholas E. Ford | Corporate Tax  | TracFone Wireless, Inc. | O: 305.715.6500 extn. 3217 |  nford@TracFone.com _______________________________________________________________ This Email contains PRIVILEGED AND CONFIDENTIAL, PROPRIETARY INFORMATION intended only for the use of the Addressee(s) named above.        From: TRS [mailto:crisp@trs-integrity.com]  Sent: Wednesday, May 10, 2017 7:38 PM To: Nicholas Ford Subject: Missing Billing Platform Sales   Hi Nicholas,   After reviewing the information we noticed that we are missing the Billing Platform sales for Burien: 4/06 through 12/06; 1/07 through 5/07; and 7/07. Are we correct in assuming that Western Union was the billing sales of 1/06 through 3/06? We are also missing Billing Platform sales, as you know, for Renton for all of 2007. Will you be able to get these to us right away, or will we need to estimate them?    Thanks Nicholas for checking this out for us. Have a great day.   Mike   This email and any files attached to it are the property of Tax Recovery Services, LLC. The contents may be confidential and proprietary, and any use or distribution of the information contained herein may be prohibited by law. If you are not a named recipient, or if you have received this email in error, please notify the person who sent it, and immediately delete it.  •