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Home My WebLink About13.E-mails from TRS to TracFone requesting schedule reviewsEXHIBIT C-13 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 [ ] 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. 001817 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 separately and [they] 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] methodology in a separate email. [. . . ] Enclosed with this email you will find the tax [schedule].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. 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. 001114 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. 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 001115 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 001116 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 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. 001821 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 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. 001822 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 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> 001823 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. [ ] 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. 001824