I don't know if it's a 'cave in' on the part of the Oregon Dept of Revenue. But I would say that it is a smart move.

I do think that some people probably got their kicker donated without their approval (nor did they do anything to warrant it), but it is going to be hard to prove that unless the tax software folks discover and admit to a malfunctioning update sw patch. That seems unlikely. So, IMHO the ODR did the correct thing here.

The "kicker" was not some gift from government, but the property of the taxpayer.

What's good to see are the thousands that this has happened to want THEIR money back, and not to go to an already over-funded government school system.

Fortunately I don't use some cheap-o temporary tax person but a real CPA, so I got the refund of my overpayment on schedule, which subsequently went to a purchase of some stock.

The latest from our brilliant and unfortunatly soon to be mayor.

First comment has it right on.

http://www.wweek.com/wwire/?p=10320

"Unfortunatly"?

It will be interesting, if they share, how many of the 12,000 "donors" claim their kicker.

Jack something you didn't include in your quote: Some taxpayers who electronically filed. their 2006 personal income tax returns report that their kicker refund was donated by mistake to the State School Fund

So does that mean that the people who used TurboTax, or something else, but filed on paper can't claim their "donated" kicker? (I would say that it was checked on what they signed and sent in, which is something someone who filed electronically really couldn't see.)

That's only a partial cure. Previous posts by Jack and others on day 3 have suggested that there are users whom the first page of their tax returns DO show the box checked, though it was neither checked in the onscreen version nor did they answer that interview question in the affirmative. Are these users to have no recourse since they cannot meet the first requirement of "a printed first page with the box not checked?"

It doesn't seem to address the complaint that users are up in arms about. Sounds to me like they are deflecting blame, the taxpayer should have proof read the printed form.

But a reasonable person could conclude that if they proof read the document as displayed on screen, the printed version would reflect the same.

I go back to my theory I posted to the day 4 post. Intuit is not off the hook.

JustaDog, I don't know where you went to school, but you should definitely be asking for a refund.

Allan L. I suggest you go back to school and pay attention this time. How do you think the state gets the money they spend? Think really hard now. You paid it in the form of taxes. It's your money. If you over pay you should get it back. If you are that ignorant the state should keep what's owing to you. Those of us who understand economics what our money back.

mmv:

Sorry to intrude on this thread, but you asked me in the other thread why I keep defending Intuit and who do I work for.

To answer your question, I'm a 60 year retired college professor. I don't work for anyone and never worked outside the public sector. I taught Anthropology, the biological side. I started programming in 1963, in the days when FORTRAN II was still popular. I got interested in financial analysis before Quicken was even a glimmer in anyone's eyes. I wrote shareware software that ended up making me quite a bit of money and I learned to program in all the mainstream languages along the way - FORTRAN, Pascal, SmallTalk-80, C, C++, Objective-C and even BASIC. But I never programmed for a living.

I agree with your take on this remedy. It leaves more questions than solves many problems. I'm still scratching my head trying to figure out who is included and who is excluded. I'm also trying to figure out how hard it would be to game the system and convert a bad personal decision into a reversal of fortune. Not hard to my devious (or some would say, deviant) mind.

And, we still don't have the answer as to the cause of the error or the ultimate mechanisms to stop it in the future. Does the state have faulty data capture software on their frontend. Did they give out ambiguous instructions about the kicker to the software companies. Did the software companies, Intuit in particular, misapply the instructions, fail to initialize some variable, or end up with a subtle buffer overrun with no error trapping at that point? How is it that three or four companies have reported problems? The list of possibilities is endless, but with the DOR throwing out this poorly thought out solution, we'll probably never publicly get to the bottom of this. There too little money at stake individually for most anyone to pursue litigation.

This was a potentially major policy decision that will have legal ramifications for other taxpayers in the future. It would behoove the DOR to get to the bottom of what happened here, and to reveal to the public just what it was. Otherwise, the department may have violated the law, which clearly states that a kicker donation, once elected, can't be revoked.

AP article with incorrect conclusion that the cure suggested by the DOR today will address the issues for all affected.

You may also want to check out comments posted to the other section of Jack's Blog associated with this topics. (link at bottom of post)

- S.

http://www.kgw.com/news-local/stories/kgw_122007_news_kicker_confusion.348c7ec1.html
Oregon to refund unwillingly donated kicker checks

------------------
https://bojack.org/2007/12/turbotax_and_the_oregon_kicker.html#comments
06:01 PM PST on Thursday, December 20, 2007

Associated Press

SALEM, Ore. -- Oregon taxpayers who claim their "kicker" tax rebates were mistakenly donated to the State School Fund will get their money back.

Nearly 6,000 got thank-you letters instead of checks even though they had not checked a box on their tax forms making the donation to Oregon schools.

About 3,000 people have called or e-mailed the state to complain about their kickers -- about a quarter of the 12,000 people who donated to the fund.

Background: What went wrong?

Poll: Did you get your kicker?

Deputy Director Susan Browning said Thursday the department determined that the law only applied to people who voluntarily make that choice.

"In this case, these taxpayers are telling us they did not make the choice to donate," Browning said.

State officials are investigating whether a glitch with tax preparation software could have caused the problem. But the software companies are reporting that their products are working fine.

Here’s how to get your money back:

Make a copy of only the front page of your 2006 Oregon tax return (Form 40S, 40, 40P, or 40N) that shows the "donate kicker" box is not checked.

Write "kicker" plainly across the top of the page.

On the back of the tax return copy, write: "I certify that I did not check the box to donate my tax year 2006 kicker to the State School Fund."

Sign and legibly print your name and the date. If you filed a joint return, both spouses must sign and date.

Mail (don't e-mail or fax) only that page of your tax return with your signed statement on the back, along with the letter, to Oregon Department of Revenue, P.O. Box 14600, Salem, OR, 97309-5049.

The envelope must be postmarked by February 1, 2008.

The department will send the taxpayer their check within three to four weeks after it receives this information. The department said taxpayers who owe a debt on which the state collects may receive a smaller-than-expected kicker check.

You can check the state Web site or call 1-800-356-4222 (toll-free from an Oregon prefix); 503-378-4988 for help.

AP article with incorrect conclusion that the cure suggested by the DOR today will address the issues for all affected.

Unless and until the DOR denies some requests for refunds based on claims of mistaken donations, it's hard to see how they haven't satisfied all aggrieved taxpayers' claims.

The DOR press release says to Make a copy of the front page only of your 2006 Oregon tax return. . . that shows that you did not check the "donate kicker" box

That leaves out all the people who say they did not check the box in TurboTax
but their printed version or the version that was filed electronically mysteriously had the box checked. For those people, it seems pretty clear that DOR will deny their refund requests.

Okay, we are one of the couple's who were stymied when we got the letter saying we donated our refund. We e-filed and printed a copy, looking at the printed copy it does say we wanted to donate the kicker. But here's the 'kicker'. When you look at the interview that Turbo Tax summarizes, the kicker box is NOT checked. When we zoom to the Oregon 40 form ON THE COMPUTER. There is a big blank spot over to the right of the USA with an X and NOTHING else surrounding it. Looking at it you think, "Yep, USA, Check." The 'kicker' box is not there. If you right click on it, you get a menu which includes "about the kicker' but it's not labeled kicker anywhere until its printed. but it's not there on the screen. Does that make sense? So, our verification was in the turbo tax interview. It clearly has the donate kicker box unchecked. And labeled as such. We only printed it out for safety, after e-filing. We never looked at it and shouldn't need to. I think Turbo Tax should take responsibility for this error.

That leaves out all the people who say they did not check the box in TurboTax
but their printed version or the version that was filed electronically mysteriously had the box checked. For those people, it seems pretty clear that DOR will deny their refund requests.

Of course, they can manually undo the check mark, and send in a return without the check mark on it, can't they? I haven't heard that anyone can't get the check mark to go away.

The DOR is obviously giving us a big wink here. If you want your money back, just wink back.

It makes sense to me that a mark involuntarily or erroneously or unwittingly made on a filed return doesn't constitute an "election". While it's hard to see how the potential for fraud can be avoided in the proposed refunds, isn't the whole voluntary reporting process of federal and state income taxes rife with the possibility of fraud? Whatever caused this mess, it has brought to light serious flaws in the whole concept of an election in advance to donate.

No doubt, the "election in advance" was a political move. It's harder to get people to write a check back than it is to get them to say they don't want it in advance.

What no one anticipated is how large this year's kicker would be. In past years, the amount was too small for most folks to care about.

From the quoted text above the DOR does not look like they are budging on the irrevocability point.

Past tense: "If you didn’t check the box "

Send proof: "that shows that you did not check the 'donate kicker' box"

From the news item on what to write: "I certify that I did not check the box"

============

Suppose that Charity X conducted a pledge drive in December 2006 to convince folks to donate the potential kicker checks to their organization, and not to any item listed on the tax form. Would the organization have an enforceable contract from a mere pledge? It would require the additional affirmative act of signing over the check after it was received. It is an example of a unitary contract.

The acts of the recipient to spend it or otherwise repledge it to another before the mere pledge is honored, or partially performed, does not alter whether it is enforceable. (The issue of partial performance, versus full performance, of a unitary contract has been litigated for example regarding PERS contracts.)

I quarrel with the soundness and validity of the statutory irrevocability, which occurs only because of the inclusion of the donation on the tax form. For illustration or contrast, suppose the legislature declared that all pledges (to OPB or to political campaign X) were enforceable contracts so as to allow the potential recipient to pledge their interest in a donor-pledge as collateral for a loan. Would we want lenders to act like the Oregon Department of Revenue and insist, like some broken record, that a pledge is a pledge and is the same thing as a contract is a contract and to then rely exclusively on the single statutory provision as the sole source of authority for the change in the normal treatment of such a promise to donate money. Could I, for example, seek to get 1,000 signatures from folks that pledge to give me 150 dollars each if I can get 1,000 folks to make the same pledge, and then deliver the 1,000 signatures/pledges to a bank for a loan? (Then take the money and run . . . )

Does the irrevocability element found in the statute mean (as a clue) that the state has already spent or promised to spend such money (an "appropriation" for purposes of compliance with the Oregon Constitution) or used it as collateral to obtain a loan, so as to spend the anticipated donation before it is fulfilled? (Off hand, for example, the State Treasurer has authorized the issuance of at least one 700 million dollar revenue anticipation bond.)

A policy question is whether inclusion of a donation on the tax form is merely a matter of convenience or whether it is something more. I say it is the former, not the latter, and think that the irrevocability point is challengeable.

I would certainly not want to have the State Treasurer start asserting the threat of criminal action for a donation pledge that is revoked (before completed) as on par with a misstatement of facts pertaining to a compulsory tax. Imagine that you call in on a OPB pledge drive and later change your mind or discover that your funds are too low . . . should it too be something that could rise beyond contract law into the realm of a potential criminal sanction?

Nevertheless, it does not seem as bad as not being given the opportunity by folks like the City of Portland to opt out of illegal gifts of taxpayer dollars that are routinely dished out on a whim.

I would have no hesitancy telling the DOR not to count your eggs before they hatch.

If the State Treasurer does not have the intention to insist upon irrevocability then this will itself be actionable neglect of his duty to enforce the law, unless of course he asks the Attorney General to issue an opinion on the validity or invalidity of the irrevocability element of the statute. This "opinion" would constrain the appearance of acting wholly arbitrarily. If the AG has already advised privately that the irrevocability element is unenforceable then he should make that decision public. (Think of the flood gates that would unleash?)

Ron, I'm rolling my eyes. Get real. The statute says that the election is irrevocable. The constitution allows the legislature to say that, and it clearly said it. And there's no way that the treasurer or the attorney general are going to get involved.

Allan L. wisely observed, "While it's hard to see how the potential for fraud can be avoided in the proposed refunds..."

To all those who might file a fraudulent claim for a kicker refund, I say: What about the CHILDREN?

If you revoke your kicker donation just because the DOR makes it easy to do, you're as bad as Ronald Reagan labeling ketchup a vegetable for food pyramid purposes.

And for what? A few more lousy Christmas presents? A month's worth of gasoline? A trip to Spirit Mountain? Don't you think the CHILDREN are more important than your personal consumption?

Well, there is certainly a shared interest between TurboTax, if they are sued by folks who did not get a kicker because of the X, and folks who simply have a change of heart on a donation pledge. The measure of the potential kicker at the time of filing of taxes was a future contingent event that would have thwarted judicial resolution of the legality of the inclusion of donations, any donations, on the tax form. Now is the right time, when the amount has become certain.

I wouldn't want someone that has indeed changed their mind to accept the invitation to doctor up their past filing under the false expectation that the DOR would give a "wink[.]" They can instead seek a declaratory judgment action, where their ability to obtain standing would depend upon the certainty that the treasurer would ask the AG to prosecute someone under some tax fraud provision for changing a yes-to-donate-before to no-donation-today. Any such case could clearly be consolidated with any that TurboTax might be a party, where a demand for a declaration that the irrevocability element is invalid would have (in the terms used in the Utsey case) "practical effects" on the parties.

I would insist that it would be preferable to suggest that someone seek a declaratory judgment than to tempt a criminal action by our treasure and AG. Lord knows their decision making process has already turned into an arbitrary mess as it is on so many fronts.

Maybe the "kicker" money could instead be used to raise the standard deduction across all filers (after the fact), in conformity with uniformity demands in the Oregon Constitution, rather than fueling the fashionable and perennial debate on what to do with it, like a seasonal football civil war game.

I do not see any obstacle to someone changing their prior NO to a donation to a YES today, and then noting the same on their 2007 tax filing exactly as they would for any donation to any non-profit. Maybe those who did donate could amend their 2006 taxes to note the donation for the 2006 year and adjust their tax obligation, now that they know the value of the donation. While some folks might see mere complexities, I instead see analytical absurdities.

If you think that neither the current treasurer nor current attorney general would get involved then the issue is surely open to public debate by candidates for each of those offices.

"Some" have had their problems resolved, but many others remain in the lurch.

Jack - The AG's office is already involved with this. I would encourage you PDXnag to contact Ms. Stephanie Soden (Executive Assistant to the Attorney General & the Media Spokesperson - stephanie.a.soden@state.or.us)with your obvious legal acumen on this topic. I'm simply not equipped as counsel and while my conversations with her have been cordial and somewhat constructive, I don't believe they've been effective for the subclass of filers affected (at least 3,000 of 12,000).

PDXnag - You have great comments. I hope you will join with Jack (or independently). We might also benefit from the request for independent counsel involved. The Governor's office (governor@state.us.or)won't be active in this as another branch of the executive branch. They've told me this point blank.
Senator Peter Courtney (sen.petercourtney@state.or.us) and other legislators must be involved to invoke a request for independent counsel. The Governor's office contends that what the DOR has been doing is not an "investigation". If it is not, I ask, "What is it?" The DOR conducted this review with the AG advising them as their counsel at the outset will simply lead to acrimony and a call that any conclusions are not independent (from those on both sides of this issue). In any case, as I've said before, the fox should not guard the henhouse. I don't know if any culpability resides with the DOR, but the simple fact is that it could.

Jill, I am in touch on a daily basis with Bob Meighan, the VP from TurboTax. If you'd like to reach him directly and can't find his contact information, please write me (not privately initially) at oregonkicker@yahoogroups.com. Your issue should be investigated if this has not been part of the testing cycle completed by Intuit/TurboTax. The points made by MMN last night about effective regression testing on all packages and updates should be examined.

Unfortunately, and I just heard this broadcast on NPR, all of the media outlets have missed the subtle point here about the latest release "sounding" like a real solution but really being an initial cop out. I encourage all of you to contact OPB/NPR, The Oregonian, KATU, the Statesman Journal (tloew@salem.gannett.com ) and other media outlets to highlight the issue. The DOR is obfuscating and trying to diffuse the issue for the larger public with their release. The press doesn't truly understand the issue and they are operating in good faith that this is a real solution.

"obvious legal acumen"

I am just a pretender . . . with an axe to grind . . . but still must keep it all in the '''public policy" realm rather than anything remotely construable as representing any particular individual . . .

I want the candidates to pipe up . . . here.

seth:

There is plenty of precedent for state agencies to have independent legal counsel. PERS is a good example, but it does take legislative action to compel or enable this. With the legislature meeting in late January, there is the possibility of such action, but the timing is not optimal.

mmv's comments about regression testing should be required for all companies whose software may have led to the same outcome as TurboTax's. Have you spoken to the makers of TaxCut, TaxAct and MacInTax? While the numbers of people with the same issue is small (as are the number of total users), there is no reason to make TurboTax solve this problem alone. I'd like to see the information the DOR sent to each purveyor of tax computing software. I also wonder whether any of the TurboTax Professional line of tax preparation software was affected? That software is only available to tax professionals and while it is unlikely that their clients are affected, it would be interesting to see how that software handles the "kicker". Ditto for TaxCut.

Jack, I understand your thinking about manually undoing the check box and giving a big wink back to the DOR, but the point is much larger and complicated than that. We don't want money that we honestly gave away in a fit of generosity. We didn't give it away in the first place. The solution still seems a little onerous to us. I have a hard time believing that Turbo Tax isn't well aware of this problem and is simply hoping that the DOR will cave. I mean, the DOR must LOVE all the electronically filed returns and blaming Turbo Tax would probably make people go back to paper filing and increase their workload tremendously. They have a vested interested in not making Turbo Tax the bad guy, even though, in my opinion, they are the sum total of the problem.

I understand your thinking about manually undoing the check box and giving a big wink back to the DOR, but the point is much larger and complicated than that.

I'm having a hard time seeing that. Do what they ask, get your money, and move on.

"Some" have had their problems resolved, but many others remain in the lurch.

If and when people do what the DOR asks and are denied, then there is a continuing story here. Until then, I think this one's over.

It appears some folks are concerned about those paper filers who didn't proof read their tax returns and merely signed them before sending them in. I'm not ... no sympathy for those that don't proof read documents before signing. And its not just "any document" like what spews out in a EULA, its your tax return. Spend the 10 minutes to read every line ...

Indeed! I wouldn't send anything off without proofing both on the computer and on paper. It is amazing how many errors go uncaught on the screen and are like large, festering sores when you see them on paper.

All - You have my sincere apologies if I implicated TurboTax/Intuit at all. I only mentioned to Jill the contact with their VP as he has been the most opena and transparent about testing issues that folks have mentioned. Unfortunately, I am in no place to work with the others. Perhaps someone else could do that though I did sent the post earlier today about the DOR release being only a partial solution to The Oregonian, KATU, KPAM, OPB, and the AP.

Does anyone here know the best method we can take to get independent counsel involved?

Also, does anyone have interest in meeting in front of the law library at Lewis & Clark (or another location, perhaps downtown) at 3 PM? I can bring a small sign and try to get some media coverage if we could ensure decent participation. We appear lucky in that it is fairly dry today. Perhaps the law library location and collegiate setting might put the right spin on this.

If you can/want to do this, please sign up to the Yahoo Group and post your intention to attend there. groups.yahoo.com/group/oregonkicker & e-mail posting via oregonkicker@yahoo.com

What do you guys think?
I originally wanted to donate the kicker, but changed my mind BEFORE e-filing the taxes. I changed the option to "NO" in Turbo Tax. My PDF (created at the date of my electronic filing) shows a "No" in the Turbotax workbook - however an "x" in form 40. When I went back to the Turbotax file (accepted in April), there was no visible preselection in the interview question regarding the kicker. By clicking on "No",
I was able to create a Form 40 and a workbook without a kicker donation.
Now, I don't know what to do:
When I send the "old" Form 40, I cannot proof that I did not want to donate the check. They will not accept the workbook which shows a "No" and my real intentions.
When I send my changed "new" pdf, I would probably get the money, but that does not seem OK. Especially since this is something everybody will do who simply changed his mind...
What would you do?

Tony - Bob Meighan will likely want to speak with you and have his team talk with you about testing. They may request a copy of your .TAX file, but they'll have to provide you a secure (non-email) transmission method (perhaps FTP).

Can you write me at oregonkicker@yahoogroups.com? I'll see your e-mail but it won't show up in the posting and I can get you in touch with Bob.
Alternatively, you can write to him directly.

BTW, is anyone else besides me and MMV meeting at the Lewis and Clark Law Library off Terwilliger in 30 minutes at 3 PM?

Jill, Tony and others:

MMV and I just met at Lewis and Clark.
Are you willing to contact me via the yahoo group (write to oregonkicker@yahoogroups.com), your post will show and as the moderator, I alone, will be able to see your e-mail? Anyone who has issues with their software (TaxCut, TurboTax, etc.) that they can replicate, is a candidate to really help us out and isolate the real source of the problem for the 3,000 of us affected.

Alternatively, if you let him know, I believe Jack can send you my direct e-mail.

http://www.oregon.gov/DOR/PERTAX/kicker-donation-faq.shtml

Kicker Donation FAQ
If the return you submitted shows the kicker box checked, you did make the election, whether you intended to or not. By law, the department cannot issue your kicker to you in that case.

Mistakenly donated kicker refunds Frequently Asked Questions

1. My kicker refund was donated to the State School Fund even though I didn’t check the box when I e-filed. How do I get my money back?
a. Make a copy of the front page only of your 2006 Oregon tax return (Form 40S, 40, 40P, or 40N) that shows that you didn’t check the “donate kicker” box; write "kicker" plainly across the top of copy of the return.
b. On the back of the tax return copy, write: "I certify that I did not check the box to donate my tax year 2006 kicker to the State School Fund."
c. Sign and legibly print your name, and include the date. If you filed jointly, both spouses must sign and date.
d. Mail (don’t e-mail or fax) this page of your tax return with the certification statement on the back, along with the letter you should have received from us, to:

Oregon Department of Revenue
PO Box 14600
Salem OR 97309-5049

2. What authority are you using to refund the money when the law says the decision is irrevocable?
The law applies to people who choose to donate to the State School Fund. In this case, these taxpayers can verify they didn’t make that choice.

3. I filed using 2-D Barcode. Will this apply to me?
We won’t refund 2-D and other paper returns showing the box checked. A 2-D barcode return is paper so the taxpayer must sign it before sending it to us. If the taxpayer checks the “donate” box and signs it, that confirms that the taxpayer chose to donate their kicker.

4. When will I get my check?
Three to four weeks after we receive your signed front page of your 2006 tax return that shows you didn’t check the box.

5. Will this change kicker law in the future?
The Legislature makes laws regarding kicker, including the donation to the State School Fund.

6. Don't you think that there are many who just changed their minds?
Taxpayers who change their minds are not eligible to have their kicker returned to them. We’re asking people to provide proof that they didn’t check the box to donate their kicker. We’re relying on the honesty and integrity of Oregonians.

7. Why do I have to send proof when I’ve already told you I didn’t make that election?
Our records show the box is checked, so we need you to provide us with the documentation that shows it isn’t. We will keep the documentation you provide us with your tax file for our accounting purposes.

8. Are you going to go back and check the validity of the claims?
We may.

9. How will the department avoid this in future?
We're still trying to determine the cause. We’re working internally and with software companies to determine the source of the problem, and to prevent this from happening in the future.

10. Are you continuing to investigate? How?
Yes. We are reviewing our processes and documents, collaborating with software companies and tax preparers, and reviewing information from taxpayers.

11. Is e-filing that inaccurate?
E-filing is still the most accurate form of filing available to taxpayers. It’s also safe and secure. In 2006, we processed 1.7 million tax returns. Of those, almost 1 million—roughly 56 percent—were successfully e-filed. Although this issue affected approximately 3,000 taxpayers, that’s only .003 percent of all e-filed returns.

12. What about the software company or tax preparer I used to file my return?
We work with the software companies and tax preparers all year to ensure that their tax preparation software processes tax information correctly. We will continue to work with them on this issue.

13. Will you pay interest on these kicker refunds?
No, Oregon law doesn’t allow interest to be paid on kickers.

14. Are you waiting until February to mail all the checks?
No, we will process and mail each check as we receive the documentation from the taxpayers.

15. What if I can't submit the documentation you ask for by February 1, or my spouse isn't available to sign it?
Call us so that we can work with you.

16. If I don't make the date, can I still get my check?
Please contact us if you can't get your letter to us by February 1, 2008.

17. What do I do if my spouse and I divorced, or my spouse died?
Please contact us so we can work with you.

18. Why can’t I just e-mail all this to you?
The front page of your tax return contains your Social Security number. Because of the unsecure nature of e-mail, we discourage people from ever e-mailing us their Social Security number.

That sure sounds to me like there is no winking going on... If you filed on paper, then what was filed is what you filed. (Which is what I thought they would say.)