colorado department of revenue tax checkoff emails

8/8/2019 Colorado Department of Revenue Tax Checkoff emails

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Vecchiarelli, John M.From: .Vecchiarelli, John M.Sent: Thursday, July 08, 2010 9:59 AMTo: Couch, Mark P.; Giardini, Richard J.Subject: RE: Tax checkoff fund glitchI do have a recollection of the CITA requirement discussion surrounding this issue. I am not certain that itis a system limitation that precipitated this requirement, rather it was the notion that the check-offs wereintended to allow a portion of a taxpayer's "refund" to be earmarked for donation to one of the authorizedentities, If the taxpayer owes money with the return , there is no refund money available to send to thecharity. While the taxpayer may include a check with the tax return that pays the outstanding tax due andhas extra money available for distribution to the charity, it is also possible that the check may be returnedby the bank as Non-sufficient Funds, If this happens then it places the department in the position ofhaving to serve as the charity's collection agent (in other words the charity already has been paid , so nowthe DOR must collect from the donor instead of asking the charity to return the donation) I do not believethis is was the legislative intent. I am going to review the statute and see if gives greater direction. Am Ihearing that there is a desire to allow this functionality? I may be missing something , but why is it betterfor the donor to pay us extra and have us send the money to the charity ra ther than donating directly tothe charity? The only reason that I can think of, is so that the charity can make a final push to receivesufficient check-off donations to allow it to remain on the return. If this is the only reason it seems just atad bit disingenuous, As for the comment that 3 Board members were in this position, I ask why did 3Board members want to make check-off donations on their tax return , I think the answer may be that theywanted to keep their charity on the return even though the general taxpaying public did not makesufficient check-off donations to satisfy the statutory requirement to remain on the return,I will let you know what the statutory review reveals.From: Couch, Mark P.Sent: Thursday, July 08, 2010 8:05 AMTo: Vecch iarelli, John M.; Giardini, Richard J,Subject: FW: Tax checkoff fund glitchHi guys,

Roxy just called and wanted to follow up on this issue.She needs to verify how many checkoff contributions have been made historically by taxpayers who owemoney?She also asks why this funct ionality was not included in the CITA programming and what it would take toinclude it.Thanks,Mark- - - - - - .__ ._- -_._ - ._---_._- _.--- . _. ..- - - ,--_ . _- ---------_.__ ._-------From: Huber, Roxanne M,Sent: Wednesday, July 07, 2010 7:51 PMTo: Couch, Mark P.Subject: FW: Tax checkoff fund glitchMark, can you look into this, not sure th is is right.

From: Gurr, Jenifer [mailto:[email protected],co.us]Sent: Wednesday, July 07, 2010 7:18 PM

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To: Huber, Roxanne M.Su bject: FW : Tax che cko ff fund g litchDirector Hu ber:Commissioner Stulp asked me to forward the following email to you.I gue ss t he questions are, is this just a technology glitch and will it be resolved?Let us know if yo u need more informat ion.Tha nks,JeniferJenifer Gu rrExecutive Administrator/Human Resources ManagerColo rado Department of Agricul t ure .700 Kipling Street. Suite 4000Lakewood , CO 80215(303) 2394104(30 3) 2394176 fax

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CO NFIDENTIALITY NOTICE: The information contained in or attached to this transmiss ion is intended solely for its authorized recipient and may be confidential. Ifyou are not the intended recipient, or responsible for delivering some or all of this information to the intended recipient, you have received this transmission in errorand are hereby notified that you are strictly prohibited from reading , copying, printing, distributing, or disclosing any of the information contained herein. If you havereceived this communication in error, immedi ate ly notify the sender and delete or properly destroy this transmission, including attach ments.

From: Anderson, Ka teSent: Tuesda y, July 06, 20 10 4:56 PMTo: Stulp, John; Miller, Jim ; Gu rr, JeniferSubject: Tax checkoff fu nd gl itchCommissioner Stulp,Th e boa rd of directors fo r the Pet Ove rpopulat ion Fund wa nted to make you aware of a concerningde vel opment at Department of Reve nue. It seems that due to a technology gl itch, if you owe taxes youcannot contribute any amount to any of the tax checkoffs. I f you do, the amount of your donationwill be returned to you as a check f rom t he State Treasury with no explanation. Ou r understandingis that this is due to a change in DOR's computer system . I t will undoubtedly have a negativeimpact on all the checkoff funds. We don't know how many people who owe taxes make checkoffdonations (a t least 3 CPOF board members) but regardless, this glitch needs to be fixed. Thecheckoffs are no longer "a simple way to gi ve." The Ch eckoff Coalition has this statement on itswebsite:Attention Tax ProfessionalsWhen you are fili ng Colorado individual income tax electronically for your clients this year, please notethat if your client owes tax, your software will not allow Colorado checkoff donations to be made onreturns with tax liabilities. Taxpayers who have a refund may donate a portion of the refund, but thosewho owe will not be able to make checkoff donations on their return. Donations may be made directly tothe organizations listed on the 2009 Colorado I 04 individual income tax return .

The Pet Overpopulation Fund is the third most successful fund on the checkoff list and has raised over$1.3 million dollars since 2001 to suppOli spay/neuter for pets belonging to low income families in

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Colorado. Nearly 40,000 pets have received low cost sterilization surgeries in underserved areas of ourstate thanks to Colorado state tax payers. The board would like to make you aware of this problem andto ask for any assistance in informing the DOR of the impact this could have on the checkoff funds.

I would be happy to speak with you further about this but wanted to give you a bit of background first.

Thanks,

Kate N. Anderson, DVMPACFAlBAP AdministratorColorado Department of Agriculture700 Kipling Street, STE 4000Lakewood, CO 80215303-239-4168303-239-4164 [email protected]

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Vecchiarelli, John M.From: Vecchiarelli, John M.Sent: Thursday, July 08, 2010 10:48 AMTo: Horwitz , Phil lip C.Subject: RE : voluntary checkoffsThanks Ph il. Th is is the information that I need. Iwil l submit an SQR (solution request) and see if we canallow this functionality within GenTax, or ascertain if it was indeed a system limitation precludes theallowance of these non-refund donations.

From: Horwitz, Phillip C.Sent: Thursday, July 08, 2010 10:30 AMTo: Vecchiarelli, John M.Subject: voluntary checkoffsJohn,There would not appear to be any statutory requirement that voluntary contributions come out of refunds.The language quoted below from the most recent five checkoffs is similar or exactly the same (in form) asevery other checkoff I looked at. In addition, many checkoffs (perhaps half) have legislative declarationlanguage that roughly conveys the following: "by allowing citizens to make vo luntary contributionson their state income tax returns for such purpose". (That language is from the Easter Sealslegislative declaration in 39-22-3301.) Although the legislative declaration language does not have thesame consistency that is found in the procedure sections, all of the legislative declarations that I readappeared to suggest that contributions could be made in addition to ones liability or out of ones refund.Thus I conclude that we cannot rely on statutory language to limit the ability of taxpayers wishing tocontribute to these causes as an addition to a taxpayer's balance due . If we believe th is presentsadministrative difficulties, we would probably wa nt to promulgate a regulation.Thanks,PhilMS:39-22-3202 - Fo r income tax years commencing on or after January 1,2 009, but prior to January1, 2012, the Colorado state individual income tax return form shall contain a line whereby eachindividual taxpayer ma y designate the amount of the contribut ion, if any, the individual w ishes tomake to the multiple sclerosis fund created in section 39 -22-3203.Breast Cancer:39-22-3302 -For income tax years commencing on or after January 1,2007, but prior to January 1,2010, the Colorado state individual income tax return form shall contain a line whereby eachindividual taxpayer may designate the amount of the contribution, if any, the individual wishes tomake to the Colorado breast and women's reproductive cancers fund created in section 39-22-3303.9 Health Fair:39-22-3402 -For income tax years commencing on or after January 1,2008, but prior to January 1,20 I I , the Colorado state individual income tax return form shall contain a line whereby eachindiv idual taxpayer may designate the amount of the contribution, if any, the individual wishes tomake to the 9Health Fair fund created in section 39-22-3401 .

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Vecchiarelli, John M.From: Vecchiarelli, John M.Sent: Thursday, July 08, 2010 11: 17 AMTo: Giardini, Richard J.; Couch. Mark P.Subject: RE: voluntary checkoffsWow, this seems to have hit a nerve. I agree that it makes little sense for the DOR to serve as acollection agency for these charities. Let me ask Phil to take a look at the language you have provided. Itwould be easier to simply continue with the way the system is now configured, but if you haven 't noticedby now I am a bit sensitive to the idea that the new system is an easy scapegoat and is being blamed foreverything under the Sun. I do not think that the system precludes us from allowing this. The systemshould simply see this as another debit and bill accord ingly. Let's see what Phil thinks. It appears asthough 39-22-1001(1) (a) is an umbrella statute that would apply to all check-offs.

From: Giardini, Richard J.Sent: Thursday, Ju ly 08,2010 11:07 AMTo: Vecchiarelli, John M.; Couch, Mark P.Subject : RE: voluntary checkoffsWhile most of the checkoff statutes are silent on this issue, 39-22-1001 (1 )(a) does refer to programs" .. funded by voluntary contributions of income tax refunds .. " So this does provide limited statutorysupport for our position.The bigger issue is whether we want to be responsible collection activity and P&I for funds donated tocheckoffs but not properly paid (as well as for short checks) . If a donor wants to make up the $7 ,000shortage fo r the MS Fund in September so they can stay on the form next year, they can still manipulatethe system by sending an extension payment first and claiming that payment. so that is not a reason tochange our procedure. The grief we get from billing for unpaid checkoff donations will be far greater thanthe grief we ha ve gotten from the checkoff organizations.Or we can go back to the legacy method and just distribute funds to the checkoffs on a hit and miss basiswith checkoff adjustments regularly coming months and years after the return was filed. This inaccuracyin legacy allowed us to accept payment for the checkoff donations.From: Vecchiarelli, John M.Sent: Thursday, July 08, 2010 10:51 AMTo: Couch, Mark P.; Giardini, Richard J.Subject: FW: voluntary checkoffsBelow you will find Phil 's statutory analysis. Based upon his findings I will submit an SQR in an effort toconfigure the GenTax system to allow check-off donations for non-refund returns.

From: Vecchiarelli, John M.Sent: Thursday, July 08, 2010 10:48 AMTo: Horwitz, Phillip C.Subject: RE: voluntary checkoffsThanks Phil. This is the information that I need. I will submit an SQR (solution request) and see if we canallow this functionality within GenTax, or ascertain if it was indeed a system limitation precludes theallowance of these non-refund donations.

From: Horwitz, Phil lip C.Sent: Thursday, July 08, 2010 10:30 AM

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Vecchiarelli, John M.From: Vecchiarelli, John M.Sent: Thursday, July 08, 2010 1:40 PMTo: Horwitz, Phillip C.Subject: RE: voluntary checkoffs

Okay well how about sending me an email that is no so targeted at Richard , one that deals with the actuallanguage of the statute and does not impugn his motives. One that I can copy him on. Thanks.

From: Horwitz, Phillip C.Sent: Thursday, July 08, 2010 11:51 AMTo: Vecchiarelli, John M.Subject: RE: voluntary checkoffsJohn,I am forced to disagree with Richard's interpretation of the language he has provided. It is quoted out-ofcontext. (Though Richard notes that that language provides only "limited statutory support".) The fulllanguage is as follows:(I )(a) Except as otherwise provided in paragraph (b) of this subsection (I), it is the intent of thegeneral assembly that any program funded by voluntary contributions of income tax refunds thatis created on or after June 2, 1985, shall have a sunset clause providing that the program shallapply to no more than three income tax years, unless the program is continued or reestablishedby the general assembly acting by bill prior to the date that the program is scheduled to sunset.The rest of the section uses language of "voluntary contributions". For example (1 (b) refe rs to "All othervoluntary contribution programs". Subsection (5) refers to "every voluntary contribution". And Subsection(6) indicates that "No more than fifteen voluntary contributions shall appear .. ".Given the relatively clear language in each specific contribution section (each one entitled "procedure")saying that the form "shall contain a line whereby every individual taxpayer may designate theamount..." (emphasis added), the language cited by Richard seems to me poor fodder for trying to arguethat the taxpayer must be receiving a refund. The provision he cites clearly does not create thatrequirement. It merely seems to refer to it as an established idea. However, the statutes nowhereestablish that requirement. If anything, the statutes require that every taxpayer be given the opportunityto make a contribution.That's my take on the interplay between these sections.Thanks,Phil

----_ ..._. __ .._--_.__ _- -_ . - ....._---_ .__ - - - ...._---- - - - - - - - ----From: Vecchiarelli, John M.Sent: Thursday, July 08, 2010 11:18 AMTo: Horwitz, Phillip C.Subject: FW: voluntary checkoffsPhil ,Please take a look at the language that Richard has provided. It seems that this language would apply toall check-offs.

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Vecchiarelli, John M.From: Vecchiarelli, John M.Sent: Thursday, July 08, 2010 1:59 PMTo: Horwitz, Phillip C.Subject: RE: voluntary checkoffsI thought that you might point to the fact that it was not enacted contemporaneously with the otherprovisions, but I think that may support Richard's position. I assume that (1) (a) was enacted prior to theother specific check-off provisions. If that is the case could it not be argued that the "contributions ofincome tax refunds" language applies to each and every check-off that follows? I understand yourargument about "every individual taxpayer may designate an amount", but if the refund language wasoriginal then I think it can be argued that the language really means every taxpayer to whom a refund isdue. These check-offs were to make it easy to contribute , but using the department as an agent toprocess payments and collect accounts receivable is outside of that objective.-- - - -_._. ---From: Horwitz, Phillip C.Sent: Thursday, July 08, 2010 1:50 PMTo: Vecchiarelli, John M.Subject: RE: voluntary checkoffsJohn,I am forced to disagree with Richard 's interpretation. Although the language Richard is pointing to iscorrect, it does not limit the donation; it merely refers to the donation as though it is limited to refunds.While this language could be used to help discern legislative intent, it has problems even in that context.(E.g. , it was not enacted contemporaneously with the operative language of the donations.) The fullparagraph follows:(I)(a) Except as otherwise provided in paragraph (b) of this subsection (I), it is the intent of thegeneral assembly that any program funded by vo luntary contributions of income tax refunds thatis created on or after June 2, 1985, shall have a sunset clause providing that the program shallapply to no more than three income tax years, unless the program is continued or reestablishedby the general assembly acting by bill prior to the date that the program is scheduled to sunset.As you can see, the "income tax refund" language is more language of reference than language oflimitation. It is not supported by language in the rest of the section, which uses language of "voluntarycontributions". For example (1 )(b) refers to "All other voluntary contribution programs". Subsection (5)refers to "every voluntary contribution". And Subsection (6) indicates that "No more than fifteen voluntarycontributions shall appear .. ".I see the language in each specific contribution section as relatively clear: each one is entitled"procedure" and each one indicates that the form "shall contain a line whereby every individual taxpayermay designate the amount..." (emphasis added). Given these factors, and the fact that our currentinterpretation has been challenged by the checkoff proponents, I do not believe that the language in 1001(1 )(a) (above) can be effectively used to argue that the taxpayer must be receiving a refund . Theprovision in question clearly does not create that requirement. It merely seems to refer to it as anestablished idea. However, the statutes nowhere establish that requirement. If anything , the statutesrequire that every taxpayer be given the opportunity to make a contribution.That's my take on the interplay between these sections.Thanks,Phil

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Vecchiarelli, John M.From: Vecchiarelli, John M.Sent: Thursday, July 08, 2010 2:00 PMTo: Horwitz, Phillip C.Subject: FW: voluntary checkoffsFYI.

From: Giardini, Richard J.Sent: Thursday, July 08, 2010 1:53 PMTo: Vecchiarelli, John M.; Couch, Mark P.Subject: RE: voluntary checkoffs

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I have real concerns that the complaints from billing for checkoffs (and the losses to the state for writingoff amounts less than $10) will be far worse than any feedback we have received from the checkoffagencies. Furthermore, we cannot wait for the SQR resolution to decide what instructions go into the 104book for 2010. My vote is to rely on the statutory reference and continue to offer the extension paymentworkaround as an option for the 100 taxpayers who really want to donate on the tax form.Perhaps it is important to explain to Roxy that the Gentax limitation that prevents payments from beingapplied to the checkoff also prevents a multitude of errors in applying payments to the account thatexisted in the legacy methodology. There is a real reason why the system works as it does.

From: Vecchiarelli, John M.Sent: Thursday, July 08, 2010 1:45 PMTo: Giardini, Richard J.; Couch, Mark P.Subject: RE: voluntary checkoffsI appreciate your comments, and I trust that they reflect what happened. However, if Roxy is gettingcomplaints and if Mark is correct that there will be some pressure to allow these nonrefund contributions Ithink it prudent to try and get ahead of the curve and submit the SQR. It may be that we will have tosimply allow any amount that is posted from the check-offs and bill if there is a discrepancy. Thanks.

From: Giardini, Richard J.Sent: Thursday, July 08, 2010 12:00 PMTo: Vecchiarelli, John M.; Couch, Mark P.Subject: RE: voluntary checkoffsThe original I-Specs had the system accepting payment for checkoffs as the old system did. Severalmeetings were held as we tried to find a solution to make it happen, but the way Gentax matches thepayment against the return after the return is edited would not allow the system to identify whether or nota payment was sent to cover the checkoff donation . It came down to Gentax being able to limit donationsto no more than the amount of the overpayment, or Gentax allowing any donation entered and billing ifthe payment is not received.Legacy didn't have this problem because the return posted and we billed for the tax balance ignoring thecheckoff keys among other items. Of course this meant we paid the checkoff agencies for unpaidcheckoffs and took the money back in later years ifwe found the mistake. Although sometimes we did bil lfor the donations later depending on various possible scenarios on the account, sometimes with P&I andsometimes without. Sometimes we even billed for dupl icate checkoffs in error. Gentax, even with thislimitation, is handling the checkoffs far more accurately than legacy ever could.

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Vecchiarelli, John M.From: Vecchiarelli . John M.Sent: Thursday. July 08, 2010204 PMTo: Giardini, Richard J.; Couch, Mark P.Subject: RE: voluntary checkoffsI truly understand your concerns and in large part I agree with what you are saying. I am troubled by thenotion that the DOR is being used to process contributions and manage any resulting accountsreceivable. However, if Phil concludes that the statutes do not limit contributions to accounts with refundsdue, where does that leave us? We must implement the statutes to the best of our ability.------_._----------_._----_._------_._-------------------.------------

From: Giardini, Richard J.Sent: Thursday, July 08, 2010 1:53 PMTo: Vecchiarelli, John M.; Couch, Mark P_Subject: RE: voluntary checkoffsI have real concerns that the complaints from billing for checkoffs (and the losses to the state for writingoff amounts less than $10) will be far worse than any feedback we have received from the checkoffagencies. Furthermore, we cannot wait for the SQR resolution to decide what instructions go into the 104book for 2010. My vote is to rely on the statutory reference and continue to offer the extension paymentworkaround as an option for the 100 taxpayers who really want to donate on the tax form_Perhaps it is important to explain to Roxy that the Gentax limitation that prevents payments from beingapplied to the checkoff also prevents a multitude of errors in applying payments to the account thatexisted in the legacy methodology. There is a real reason why the system works as it does.-----------------------From: Vecchiarelli, John M_Sent: Thursday, July 08, 2010 1:45 PMTo: Giardini, Richard J.; Couch, Mark P.Subject: RE: voluntary checkoffsI appreciate your comments, and I trust that they reflect what happened. However, if Roxy is gettingcomplaints and if Mark is correct that there will be some pressure to allow these non-refund contributions Ithink it prudent to try and get ahead of the curve and submit the SQR. It may be that we will have tosimply allow any amount that is posted from the check-offs and bill if there is a discrepancy. Thanks_

From: Giardini, Richard J,Sent: Thursday, July 08, 2010 12:00 PMTo: Vecchiarelli, John M.; Couch, Mark P.Subject: RE: voluntary checkoffsThe original I-Specs had the system accepting payment for checkoffs as the old system did_ Severalmeetings were held as we tried to find a solution to make it happen , but the way Gentax matches thepayment against the return after the return is edited would not allow the system to identify whether or nota payment was sent to cover the checkoff donation. It came down to Gentax being able to limit donationsto no more than the amount of the overpayment, or Gentax al lowing any donation entered and billing ifthe payment is not received_Legacy didn't have this problem because the return posted and we billed for the tax balance ignoring thecheckoff keys among other items. Of course this meant we paid the checkoff agencies for unpaidcheckoffs and took the money back in later years if we found the mistake. Although sometimes we did billfor the donations later depending on various possible scenarios on the account, sometimes with P&I andsometimes without Sometimes we even billed for duplicate checkoffs in error. Gentax, even with this

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Vecchiarelli, John M.From: Vecchiarell i, John M.Sent: Thursday, July 08, 2010 2:07 PMTo: Horwitz, Phillip C.Subject: RE: voluntary checkoffsIt is not a system limitation! The system can allow for these contributions. What the system cannot do ismake sure that the amount posted correctly (thus subjecting the line to data capture errors) or verify thatthe payment has cleared, before it posts. That means we may be in a position where we have to bill thetaxpayer and if unsuccessful either write-off the debt or recover it from the check-off organization.-_._ - _ . _ - - - - -From: Horwitz, Phillip C.Sent: Thursday, Ju ly 08, 2010 2:03 PMTo: Vecchiarelli, John M.Subject: RE: voluntary checkoffsI think this is fine, if that's the way we go, but we should recognize this as a system limitation not as astatutory one. If we want to maintain this position , we would be best served by promulgating a regulationarticulating that limitation (though I worry that it would not pass muster in either the AG's office or LLS ).The more I read it, the more convinced I am that we are on shaky ground statutorily.

From: Vecchiarelli, John M.Sent: Thursday, July 08, 20102:00 PMTo: Horwitz, Phillip C.Subject: FW: vo luntary checkoffsFYI.

- - - - _ . _ - _ . _ - -_ ._----_ .__._._---------- -_.-From: Giardini, Richard J.Sent: Thursday, July 08, 2010 1:53 PMTo: Vecchiarelli, John M.; Couch, Mark P.Subject: RE: voluntary checkoffsI have real concerns that the complaints from billing for checkoffs (and the losses to the state for writingoff amounts less than $10) will be far worse than any feedback we have received from the checkoffagencies. Furthermore, we cannot wait for the SQR resolution to decide what instructions go into the 104book for 2010. My vote is to rely on the statutory reference and continue to offer the extension paymentworkaround as an option for the 100 taxpayers who really want to donate on the tax form.Perhaps it is important to explain to Roxy that the Gentax limitation that prevents payments from beingapplied to the checkoff also prevents a multitude of errors in applying payments to the account thatexisted in the legacy methodology. There is a real reason why the system works as it does.

From: Vecchiarelli, John M.Sent: Thursday, July 08, 2010 1:45 PMTo: Giardini, Richard J.; Couch, Mark P.Subject: RE: voluntary checkoffsI appreciate your comments, and I trust that they reflect what happened. However, if Roxy is gettingcomplaints and if Mark is correct that there will be some pressure to allow these non-refund contributions Ithink it prudent to try and get ahead of the curve and submit the SQR. It may be that we will have tosimply allow any amount that is posted from the check-offs and bill if there is a discrepancy. Thanks.

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Vecchiarelli, John M,From: Vecchiarelli, John M.Sent: Thursday, July 08, 2010 2:33 PMTo: Horwitz, Phillip C.Subject: RE: voluntary checkoffsI couldn' t disagree more. First of alii do not believe that Colorado was the first state to allow check-offs , Ithink if we research other states we will find that they are limited to refunds and that is what was expectedhere. Secondly I do not believe that the legislature gave any thought to our superior collections expertise,in fact if you listen to them you will find that they do not think do a very good job. They simply wanted tomake it easy for taxpayers who were due a refund to make a contribution of that refund or a portionthereof to the charities involved. They did not want us to do the work of the charities. Perhaps I shouldhave our telephone collectors solicit donation instead of dunning debtors. I could also waive penalty andinterest in exchange for donations to the check-off charities.From: Horwitz, Phillip C.Sent: Thursday, July 08,20102:12 PMTo: Vecchiarelli, John M.Subject: RE: voluntary checkoffsIt does seem to me that we can do that, and that our systems are designed to do. Contrary to Richard'sand your suggestions, it seems to me that this is exactly what the legislature was trying to do when itpassed these checkoffs. To the extent that the agency's collection expertise increases the amount theserecipients receive, that seems to have been the legislature's objective. I recognize (as do you andRichard) that there is a high cost to such a system and that it is a poor use of state resources. However,it seems to me certain that the legislature does not feel the same way (or at least did not at the time thesewere passed).I do think all these issues of what is best practice is academic, though. I think it's a tough row to hoe toargue that the statutes allow us to limit the donations to refund recipients.

From: Vecchiarelli, John M.Sent: Thursday, July 08, 20102:07 PMTo: Horwitz, Phillip C.Subject: RE: voluntary checkoffsIt is not a system limitation! The system can allow for these contributions . What the system cannot do ismake sure that the amount posted correctly (thus subjecting the line to data capture errors) or verify thatthe payment has cleared, before it posts. That means we may be in a position where we have to bill thetaxpayer and if unsuccessful either write-off the debt or recover it from the check-off organization.

From: Horwitz, Phillip C.Sent: Thursday, July 08, 2010 2:03 PMTo: Vecchiarelli, John M.Subject: RE: voluntary checkoffsI think this is fine, if that's the way we go, but we should recognize this as a system limitation not as astatutory one. If we want to maintain this position , we would be best served by promulgating a regulationarticulating that limitation (though I worry that it would not pass muster in either the AG's office or LLS).The more I read it, the more convinced I am that we are on shaky ground statutorily._ . - - - -_ ..-._-......._--- - - - - - - - - - - -_ ...----- -.- - - - - - ....-----From: Vecchiarelli, John M.Sent: Thursday, July 08, 2010 2:00 PM

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Vecch iarell i , John M.From: Vecchiarelli , John M.Sent : Thursday, July 08, 2010 2:37 PMTo: Horwitz, Phi ll ip C.Subject: RE: voluntary ch eckoffsNeil plea se, I do not want to bother Tim.- - - - - _ ._-_.__ ._----_._----_ .- - - - - _ . _ - -------From : Horwitz, Phillip C.Sent: Thursday, Ju ly 08, 20 10 2:36 PMTo : Vecchiarell i, John M.Subject: RE: voluntary checkoffs

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I think a ll of those are excellent ideas. I'm sure if we floated them by our friends across the street, theywould jump on them (as long as they didn't have a fiscal note ... )My argument is not abo ut wha t the legislature meant or did n' t mean to do. I don't believe that is relevan t.I'm strictly looking at the language of the statutes, and I think we have a poor position if we try to limit thedonations to refunds. I don't be lieve the language of the statutes support us.We can certa inly get a forth opinion from Ti m or Neil.Phil ---------- . --From : Vecchiarelli, Joh n M.Sent: Thursday, July 08, 20102:33 PMTo : Horwitz, Phillip C.Subject: RE: voluntary ch ecko ffsI couldn' t disagree more. First of all I do not believe that Colorado was the first state to allow check-offs , Ithink if we research other states we wi ll find that they are limited to refunds and that is what was expectedhere . Secondly I do not believe that the legis lature gave any thought to ou r superior collections expertise ,in fact if you listen to them you will find that they do not think do a very good job . They simply wanted tomake it easy for taxpayers who were due a refund to make a contribution of that refund or a portionthereof to the charities involved. They did not want us to do the work of the charities . Perhaps I shouldhave our telephone collectors solicit donation instead of dunning debtors. I could also waive penalty andinte rest in exchange for donations to the check-off charities.--------From : Horwitz, Phillip C.Sen t: Thursday, Jul y 08, 2010 2:12 PMTo: Vecchiarelli, Jo hn M.Subject : RE: voluntary checkoffs

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It does seem to me that we can do that, and that our systems are designed to do. Contrary to Richard'sand your suggestions, it seems to me that th is is exactly what the legislature was trying to do when itpassed these checkoffs. To the extent that the agency's collection expertise increases the amount theserecipients receive, that seems to have been the legislature's objective. I recognize (as do you andRichard) that there is a high cost to such a system and that it is a poor use of state resources. However,it seems to me certain that the leg islature does not feel the same way (or at least did not at the t ime thesewere passed).I do think all these issues of what is best practice is academic, though. I think it's a tough row to hoe toargue that the statutes al]0\"1 us to limit the donations to refund recipients.

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Vecchiarelli, John M.From: Vecchiarelli, John M.Sent: Thursday , July 08, 2010 2:38 PMTo: Horwitz , Phillip C.Subject: RE : voluntary checkoffsEven still. I know we won't ha ve a change to the system before then.

From: Horwitz, Phillip C.Sent: Thursday, July 08, 2010 2:37 PMTo: Vecchiarelli, John M.Subject: RE: vo luntary checkoffsThe only problem is that Neil won't be back until Tuesday .

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------ - - ------- _ ..__ _---_._-_.- -_._ - - - ----_ ..._ - - - - - - - - - - -From: Vecchiare lli, John M.Sent: Thursday, July 08, 2010 2:37 PMTo: Horw itz, Phillip C.Subject: RE: voluntary checkoffsNeil please, I do not want to bother T im.--.-.- - - - - - - - -From: Horwitz, Phillip C.Sent: Th ursday, July 08, 2010 2:36 PMTo: Vecchiarelli, John M.Subject: RE: voluntary checkoffsI think all of those are excellent ideas. I'm sure if we floated them by our friends across the street, theywould jump on them (as long as they didn't have a fiscal note ... )My argument is not about what the legislature meant or didn't mean to do. I don't believe that is relevant.I'm strictl y looking at the language of the statutes, and I think we have a po or position if we try to limit thedonations to refunds. I don 't believe the language of the statu tes support us.We can certainly get a forth opinion from Tim or Neil.Phil

From: Vecchiarelli, John M.Sent: Thursday, July 08 , 2010 2:33 PMTo: Horwitz, Phillip C.Subject: RE: voluntary checkoffsI couldn't disagree more. First of all I do not believe that Colorado was the first state to allow check-ofts, Ithink if we research other states we will find that they are limited to refunds and that is what was expectedhere. Secondly I do not bel ieve that the legislature gave any thought to our superior collections expertise,in fact if you listen to them you will find that they do not think do a very good job. They simply wanted tomake it easy for taxpayers who were due a refund to make a contribution of that refund or a portionthereof to the charities involved. They did not want us to do the work of the charities . Perhaps I shouldhave our telephone collectors solicit donation instead of dunning debtors. I could also waive penalty andinterest in exchange fo r donations to the check-oft charities.

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Vecchiarelli, John M.From: Vecchiarelli, John M.Sent: Thursday, July 08, 2010 2:59 PMTo: Couch , Mark P.; Giardini, Richard J.Subject: RE : voluntary checkoffsI don't want to beat a dead horse, but I don't think tha t what was allowed in legacy is germane. The factthat legacy allowed this simply points out the system limitations of legacy not a purposeful decision on thepart of the department to allow contributions from people who do not have a refund due. Having said that,I am still resea rching what options we have in GenTax.

From: Couch, Mark P.Sent: Thursday, July 08, 20102:06 PMTo: Vecchiarelli, John M.; Giardini, Richard J.Subject: RE: voluntary checkoffsJ really appreciate the points you're making. Richard, but I would express the concern that we have doneit in the past, but now would be re lying on statute to say we don't have to.

From: Vecchiarelli, John M.Sent: Thursday, July 08, 20 10 2:04 PMTo: Giardini, Richard J.; Couch, Mark P.Subject: RE: voluntary checkoffsI truly understand your concerns and in large part I agree with what you are saying. I am troubled by thenotion that the DOR is being used to process contributions and rnanage any resulting accountsre ceivable. However, if Phi l concludes that the statutes do not limit contributions to accounts wi th refundsdue, where does that leave us? We must implement the statutes to the best of our ability.--- -_._-_._----------_._-From: Giardini, Richard J.Sent: Thursday, July 08,2010 1:53 PMTo: Vecchiarelli, John M.; Couch, Mark P.Subject: RE: volunta ry checkoffsI have real concerns that the complaints from billing for checkoffs (and the losses to the state for writingoff amounts less than $10) will be far worse than any feedback we have received from the checkoffagencies. Furthermore, we cannot wait for the SOR resolution to decide what instructions go into the 104book for 2010. My vote is to rely on the statutory reference and continue to offer the extension paymentworkaround as an option for th e 100 taxpayers who really want to donate on the tax form.Perhaps it is important to explain to Roxy that the Gentax limitation that prevents payments from beingapplied to the checkoff also prevents a multitude of errors in applying payments to the account thatexisted in the legacy methodology. There is a real reason why the system works as it does.

From: Vecchiarelli, John M.Sent: Thursday, Ju ly 08, 2010 1:45 PMTo: Giardini, Richard J.; Couch, Mark P.Subject: RE: volu ntary checkoffsI ap preciate yo ur comments, and I trust that they reflect what happened. However, if Roxy is gettingcomplaints and if Mark is correct that there will be some pressure to allow these non-refund contributions Ithink it prudent to try and get ahead of the curve and submit the SOR. It may be that we will have to

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Vecchiarelli, John M.From: Giardini, Richard J.Sent: Thursday, July 08, 2010 8:59 AMTo: Couch, Mark P.; Vecchiarelli, John M.Subject: RE: Tax checkoff fund glitchLast year, approximately 100 taxpayers paid additional money so they could donate extra money to acheckoff. We tried to include this functionality in Gentax, but the way Gentax processes overpayments wehad two options. To allow taxpayers to donate additional money to a checkoff, Gentax will have to includecheckoff donations in the billing process. This means that a taxpayer who makes a donation thinking theyhad a refund but made a mistake that overstated the refund will receive a bill plus penalty and interest onthat donation amount. This is not correct and will result in significant problems, which is why we selectedthe lesser of the two evils and restricted the checkoff payments. We have offered the option to taxpayersto pay an extension payment that can then be applied to the checkoff as a work around if they are trulycommitted to donating to the checkoff on the tax return.

From: Couch, Mark P.Sent: Thursday, July 08, 2010 8:05 AMTo: Vecchiarelli, John M.; Giardini, Richard J.Subject: FW: Tax checkoff fund glitchHi guys,Roxy just called and wanted to follow up on this issue.She needs to verify how many checkoff contributions have been made historically by taxpayers who owemoney?She also asks why this functionality was not included in the CITA programming and what it would take toinclude it.Thanks,Mark

From: Huber, Roxanne M.Sent: Wednesday, July 07, 2010 7:51 PMTo: Couch, Mark P.Subject: FW: Tax checkoff fund glitchMark, can you look into this, not sure this is right.

From: Gurr, Jenifer [mailto:[email protected]]Sent: Wednesday, July 07,20107:18 PMTo: Huber, Roxanne M.Subject: FW: Tax checkoff fund glitchDirecto r Huber:Commissioner Stulp asked me to fo rward the following email to you.I guess the questions are, is this just a technology glitch and will it be resolved?Let us know if you need more in formation.

colorado department of revenue tax checkoff emails

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