CA, Inc.'s Answer and Counterclaim - Reed Smith

More documents

Recommendations

Info

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com58. Indeed, the State has conceded that it would never be satisfied with CA’sdocuments, no matter what was produced. In fact, while the State now complains that CA didnot provide enough documents, its internal documents, prepared by the State's Senior TaxAuditor, Camilla Ridgeway, to the State's Audit Manager, Mark Udinski, in March 2008, revealthat the State was, in actuality, "not interested in receiving/reviewing" additional documentsprovided by CA, even as the State demanded them. Camilla Ridgeway reiterated the State'sposition on this point during telephone conferences with representatives of CA.59. Nevertheless, even though CA had no obligation to do so and even though itbecame increasingly apparent that nothing would satisfy the State, CA provided the State withadditional information throughout the VDA process.60. The VDA process appears to be designed for Holders to fail, such that the Staterepeatedly demands increasingly more aged records, and when a Holder cannot produce each andevery aged record for periods in excess of ten or twenty years – an unreasonable standard for anycorporation to maintain – the State decides arbitrarily and capriciously that the records are"incomplete" and "unreliable," and that “estimation” techniques must be used to calculateliability – techniques that, not surprisingly, substantially increase the amount of money allegedlydue to the State.61. The State enforces its VDA program in a way that does not provide a Holder withpredictability, consistency, fairness or finality in regard to the VDA process or its audits,regardless of the legitimacy of the State's requests and demands.62. Ultimately, the State forces Holders like CA into an untenable situation. Eitherthe Holder agrees to estimate, despite the accuracy of its books and records, or it faces theassessment of interest, penalties, audit and/or litigation. The State's goal of maximizing itsrevenue from the abandoned property processes appears to have eclipsed the State's obligation to- 48 –
From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.comfulfill the purpose of escheat law, which is to reunite owners with their lost or unclaimedproperty. That purpose derives from the custodial nature of escheat laws, which are not intendedto act as revenue generators, like tax statutes.63. In addition, the State has modified the VDA program from a voluntary self-auditby Holders into a full-fledged audit of a Holder's books and records, with the intention tounreliably estimate liability even where the Holder has produced names and addressesaccounting for that unclaimed and abandoned property.64. For instance, CA has provided the State with its books and records for certaincategories of properties, and those records contain complete names and addresses for all relevantyears. Specifically, with respect to amounts allegedly owed for the categories of accountsreceivable "direct" and accounts receivable "indirect," CA provided the State with detailedrecords evidencing clearly the names and addresses for the vast majority of credits on its booksfrom 1991 to 2001.65. Despite this uncontroverted evidence, the State has chosen to ignore the clearbooks and records maintained by CA that set forth the credits owed and the owners of thosecredits, including their last known addresses, by demanding higher amounts from CA.66. Further, the State has taken the inconsistent position of saying, on the one hand,that the books and records of CA are too unreliable and incomplete to allow CA to determine itsescheat liability but, at the same, the State relies expressly upon those very books and records inestimating CA's alleged escheat liability on its own.67. The State's efforts to disregard CA's detailed books and records are in directviolation of the law as set forth by the United States Supreme Court in Texas v. New Jersey andDelaware v. New York, and by the Court of Chancery in Nellius v. Tampax, Incorporated.- 49 –
Page 1 and 2: From the state tax library of Reed
Page 47: From the state tax library of Reed
Page 87: From the state tax library of Reed

CA, Inc.'s Answer and Counterclaim - Reed Smith

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?