HomeMy WebLinkAboutEx 24 T Crisp letter to Edwards and Degginger 3.18.2021.pdfT. R,77,7v =ovow
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tLC
Providing cities with experienced research and suditing services"
March 18, 2021
SENT VIA E-MAIL ONLY
Mr. Scott Edwards (EdwardsSgLanePowell.com)
Mr. Grant Degginger (De ingerG e lanepowell.com)
Lane Powell PC
P.O. Box 91302
Seattle, WA 98111-9402
RE: Tracfone Wireless Inc. — Corrections to Renton Audit Assessment
Dear Mr. Scott Edwards and Mr. Grant Degginger:
It has come to our attention in the course of the discovery and appeal in the above -
referenced audit that there are two corrections that need to be made on the tax schedules
for the audit of Tracfone Wireless Inc. The first issue is that of the omission of the 98178
zip code's population, and the second issue is the non -incorporation of the changes in the
Renton Municipal Code regarding interest due on the tax. The two corrections required
are described in detail in this letter. The corrected tax schedules (spreadsheets) are
attached to the email conveying this letter.
Regarding the 98178 zip code population omission: In 2015, TRS requested that
TracFone include the 98178 zip code revenue with the other revenue data we requested.
But when we received the information, TracFone omitted the 98178 zip code from the
revenue data they supplied to us, and we found that some zip code websites omitted it in
the Renton zip code list because it was such a small percentage of the Renton population.
Because of this, TRS designed our tax schedules to not include revenue data or
population numbers from the 98178 zip code. We performed all our checks and reviews
of the spreadsheet with this situation in place.
In May 2017, TRS concluded that the 98178 zip code included a material amount of the
Renton population, and we again requested that TracFone supply the revenue data
including the 98178 zip code. When that revenue data came in, we inadvertently omitted
the 98178 zip code population.
In August 2017, TRS sent a copy of the schedules to TracFone for their review. We sent
out requests to TracFone asking them to review the schedules and supply in writing any
(253) 223-4986 PO Box 608 Spanaway, WA 98387 Crisp@TRS-integrity.com
Mr. Scott Edwards
Mr. Grant Degginger
March 18, 2021
Page 2 of 2
objections they had regarding the work and how it was done, but we did not receive a
reply delineating objections to the schedules.
Regarding the interest calculation error, the situation was as follows: As far as our
records show, TRS first became aware of the Renton code change in March of 2020, long
after sending out the tax assessment in 2019. We also checked our email records, and we
found we did not send another electronic copy of the 2019 assessment with updated
interest out to Renton for them to notice this oversight.
In December 2020 we realized that the interest calculation method on Tracfone's
assessment had not been updated consistent with the new code, and we notified Renton of
the issue. When the question came up during my deposition, I erroneously stated that
Renton had said to leave that be. Afterwards, I realized the error and have now corrected
the interest calculation in the attached spreadsheets. The new code and interest
calculation was in effect beginning 1/1/2016, and all prior years were subject to the rates
in effect under Renton Municipal Code 5-11 (12% per year).
The corrected schedules have been reviewed and accepted by the City, and we
recommend that the City issue a refund for the difference of $80,958.37, which includes
$20,407.51 of tax, $55,449.02 of interest and $5,101.84 of penalties.
Cordially,
Tamara Crisp
Vice President
Tax Recovery Services, LLC
Electronic CC:
Nate Malone, Renton Tax & License Program Manager (NMalone Rentonwa. ov)
Leslie Clark, Senior Assistant City Attorney (LC1ark&RenIgR g aov)
Karl Sand, Ogden Murphy Wallace {ksandgomwlaw.com)
(253) 223-4986 PO Box 608 Spanaway, W4 98387 Crisp@TRS-Integrity.corn