EVIDENTIARY PACKAGE — CHAPTERS FILED AND PENDING

I. EXECUTIVE SUMMARY

This analysis presents a chronological examination of all IRS Form 1099-R statements issued by the University of California to Charles A. Harold from 2010 through 2024. The documentary evidence demonstrates:

1. From 2010–2014, UC properly classified Harold’s income as DISABILITY INCOME (Distribution Code 3), with approximately 92.7% being tax-free.

2. In 2015, UC issued MULTIPLE CONFLICTING 1099-R forms for the same tax year, demonstrating system confusion regarding Harold’s status.

3. From 2016–2024, UC reclassified ALL of Harold’s income as RETIREMENT INCOME (Distribution Codes 2 and 7), making 100% taxable.

4. The estimated total financial harm from this improper reclassification is $133,215 to $149,532.

(See Chapter 06: Schrödinger’s Retiree — Ten Contradictions UC Cannot Reconcile, Contradiction 1, for the institutional classification conflicts underlying these tax code changes.)

II. IRS DISTRIBUTION CODE DEFINITIONS

Per IRS Form 1099-R Instructions, Box 7 Distribution Codes:

III. DISABILITY INCOME YEARS (2010–2014)

During this period, UC properly recognized Harold’s permanent disability status per the August 8, 2001 Octagon Risk Services determination and March 2003 Workers’ Compensation Settlement.

KEY OBSERVATION: During disability status, approximately 92.7% of all distributions were TAX-FREE under IRS Code 3.

IV. THE 2015 TRANSITION YEAR — CONFLICTING 1099-R FORMS

CRITICAL EVIDENCE: UC issued MULTIPLE CONFLICTING 1099-R forms for tax year 2015, demonstrating confusion or corruption in UC’s records regarding Harold’s benefit status.

A. Version 1: Single Combined Form (100% Taxable)

B. Version 2: Split Forms (Partial Disability Recognition)

This version shows TWO SEPARATE 1099-R forms on the same document, totaling the same $30,171.78:

SIGNIFICANCE: UC’s own records in 2015 STILL RECOGNIZED Harold’s disability status (Code 3) for $15,557.34 of his income. The issuance of conflicting forms proves UC’s system had conflicting data about his status. (See Chapter 05: 25 Data Breaches Exposed the Systems That Were Supposed to Protect Harold’s Records, for the breach timeline coinciding with this transition.)

V. RETIREMENT INCOME YEARS (2016–2024)

Following the 2015 conversion, UC reclassified ALL of Harold’s income as retirement income, eliminating the disability tax exemption and beginning medical premium deductions.

KEY OBSERVATION: After reclassification, 100% of all distributions became TAXABLE, and medical insurance premiums began being deducted from Harold’s pension. The gross distribution dropped from $33,188.26 (2014) to $27,767.01 (2016) —a 16.3% decrease consistent with the commencement of monthly medical insurance premium deductions. UC's current UCRAYS records reflect a monthly medical premium of $727.48; the 2016 deduction rate would have been lower, consistent with the approximately $451.77 monthly difference reflected in the gross distribution decrease .

VI. CALCULATED FINANCIAL HARM

A. Additional Taxes Paid Due to Loss of Disability Tax Exemption

If disability status had been maintained, approximately 92.7% of income would have remained tax-free (as it was from 2010–2014).

B. Medical Insurance Premiums Improperly Deducted

Per the March 2003 Settlement and Octagon determination, UC was obligated to pay Harold’s medical insurance. Current UCRAYS records show a monthly medical premium of $727.48 being deducted.

C. Total Approximate Estimated Financial Harm

NOTE: These calculations do NOT include: (1) Interest on wrongly taken funds, (2) State tax implications, (3) Future ongoing harm until corrected, (4) Potential IRS penalties for incorrect tax filings based on UC’s erroneous 1099-R forms. (5) Unknown damages not yet realized (6) Penalties

VII. CONTEMPORANEOUS TAX RECONCILIATION EFFORTS, UC COVERAGE REPRESENTATIONS, UC NON-RESPONSE, AND DOCUMENTED RECORD LOSS (2020–2021)

A. UC’s IRS Form 1095-B Coverage Filings and the February–March 2021 Ida Fong Inquiry

As part of its federally mandated Affordable Care Act reporting, the University of California issued IRS Form 1095-B for coverage year 2020, which by law was required to be furnished to the covered individual no later than January 31, 2021. UC’s 2020 Form 1095-B affirmatively represented to the Internal Revenue Service that Charles A. Harold Jr., Harold's wife, and Maximillian (“Max”) Harold were covered by employer-sponsored minimum essential health coverage for all twelve months of 2020.

Max Harold was born March 9, 1994. Under standard ACA rules, dependent coverage ordinarily terminates at the end of the calendar year in which the dependent turns 26. Max therefore exceeded the normal dependent eligibility age no later than the end of calendar year 2020. UC could only lawfully and truthfully represent Max Harold as covered beyond that point if UC treated him as eligible under a disability-based or equivalent special-status exception.

In February 2021, after UC had already been required to furnish the 2020 Form 1095-B reflecting Max as covered, Ida Fong, a UC Benefits employee, telephoned Charles Harold regarding Max’s health insurance coverage. Ida stated that UC’s system listed Max as “disabled” and that she needed to confirm whether Max was still disabled in order to determine whether his coverage could continue, because Max was over age 27. Charles Harold advised Ida that Max has never been disabled and explained that Charles — not Max — was the individual with a disability rating and disability income prior to UC’s later reclassification.

On March 12, 2021 at 1:46 PM, Charles Harold memorialized this communication in writing to Ida Fong, stating that she had called “a few weeks ago” about Max’s coverage and that UC’s system had Max incorrectly checked off as disabled. In that same exchange, Ida Fong acknowledged that UC could not locate prior records because, when UC implemented new computer systems, records from earlier systems were lost and not recovered. (See Chapter 06: Schrödinger’s Retiree, Contradiction 8: The Harold Family Disability Coding.)

UC’s subsequent Form 1095-B for coverage year 2021, required to be furnished by January 31, 2022, no longer lists Max Harold as a covered individual, while continuing to list Charles and Harold's wife. This year-to-year change demonstrates that UC corrected the dependent-level eligibility issue following the February–March 2021 inquiry, while leaving unresolved the underlying disability classification, tax treatment, and benefit status issues affecting Charles Harold.

B. Independent Third-Party Tax Professional Identifies and Attempts to Correct UC 1099 Errors in Real Time

Separately and independently, on September 2, 2020 at 12:03 PM, David Kabachnick, EA — a licensed enrolled agent and Harold’s long-standing tax preparer — sent a written email asking whether the University of California intended to amend Harold’s 2019 IRS Form 1099-R. In that same communication, the accountant explicitly referenced:

• An unresolved 2018 Form 1099-R issue,

• A Form 1099-MISC reflecting an incorrect entity identification number, and

• A prior list of reconciliation questions that had been transmitted but had not been answered.

This correspondence was sent in the ordinary course of tax preparation, not litigation, and constitutes independent, contemporaneous third-party documentary evidence that UC’s tax reporting inconsistencies were actively identified and being addressed in real time in 2020, not retroactively years later. The issues identified by the accountant span multiple tax years and multiple IRS reporting forms, underscoring that the discrepancies were systemic rather than isolated.

C. UC COVID-19 Operational Directives and Restricted Communication Channels

The accountant’s September 2, 2020 inquiry occurred during a period in which UC had formally altered and restricted communications due to COVID-19. On March 26, 2020, the UC Retirement Administration Service Center (RASC) issued a systemwide notice stating that, due to the Governor’s stay-at-home order, UC staff had transitioned to remote operations and were unable to reliably receive physical mail or respond to telephone calls. UC expressly directed retirees that urgent matters must be submitted only through UC Retirement At Your Service (UCRAYS) secure messaging or by fax.

That UC notice appears embedded in the same email chain later provided to the accountant, establishing that Harold and his tax preparer were attempting to reconcile UC tax reporting within the UC-mandated communication framework in place at the time.

D. UC Non-Response and Absence of Corrective Action or Records

Despite a licensed enrolled agent raising specific tax reconciliation questions on September 2, 2020, and despite UC’s own directive that urgent matters be handled through UCRAYS or fax, no response from UC appears in the record addressing the requested amendments or reconciliation.

No amended Forms 1099-R, explanatory correspondence, or written clarification were issued. When Harold later reviewed his UCRAYS account history, the secure message record extended back only to approximately 2022, with no messages, attachments, or audit trail reflecting the 2020 tax reconciliation efforts, notwithstanding UC’s COVID-era centralization of communications into that system. The absence of records is inconsistent with documented actions taken by Harold and his accountant and is consistent with record loss, failed migration, or system degradation.

E. Written UC Admission of Record Loss During System Upgrades

In her March 12, 2021 written response, Ida Fong stated that when UC implemented new computer systems, records from prior systems were lost and not recovered, and that she could not locate records reflecting Harold’s disability status, workers’ compensation history, or related benefit classifications. She further acknowledged that these system changes could explain alterations to Harold’s benefit status.

This written admission provides a contemporaneous UC explanation for both the absence of historical records and UC’s inability to resolve the tax and benefit discrepancies that had been raised by Harold’s accountant in 2020. (See Chapter 05: 25 Data Breaches Exposed the Systems That Were Supposed to Protect Harold’s Records.)

F. Corroboration Through Data Breach and System Migration Timing

The accountant-initiated tax reconciliation efforts of September 2020 occurred immediately before and during a documented sequence of University of California and Anthem / Anthem Blue Cross data breaches, including:

• December 24, 2020 — University of California data breach,

• January 12 and January 21, 2021 — Anthem, Inc. data breaches.

These incidents followed earlier UCLA Health and Anthem breaches and coincided with UC’s COVID-era system migrations. The timing corroborates UC employee admissions that legacy records were lost or not recovered, rather than never having existed.

G. Evidentiary Significance

Taken together, this sequence establishes that:

1. UC affirmatively represented health coverage to the IRS for Harold and his dependents through Forms 1095-B in 2020;

2. UC identified and corrected a dependent-level eligibility issue in early 2021 while acknowledging the loss of underlying records;

3. Independent third-party tax counsel identified and attempted to correct UC tax reporting errors in real time in 2020;

4. UC restricted communications during COVID-19 and directed matters into centralized systems;

5. UC failed to respond and later produced no records of those reconciliation efforts; and

6. A UC Benefits employee admitted in writing that legacy records were lost during system upgrades amid documented data breaches.

The evidence supports a reasonable inference that Harold’s UC tax and benefits records were materially degraded or erased during the COVID-19 and data-breach period, and that the resulting tax harm was not the product of inaction, waiver, or delay by Harold.

VIII. CONCLUSIONS OF FACT

Based on the documentary evidence, third-party records, UC admissions, and contemporaneous tax and benefits filings described in this chapter, the following conclusions of fact are supported by the record:

1. UC affirmatively altered Harold’s tax classification beginning in 2015, converting previously reported disability income to retirement income, without producing contemporaneous documentation reflecting a lawful reclassification, notice, or consent, as demonstrated by UC’s own Forms 1099-R analyzed in Sections II–V.

2. UC’s tax reporting inconsistencies were identified in real time, not retrospectively, by a licensed enrolled agent acting in the ordinary course of tax preparation. As detailed in Section VII.B, Harold’s tax preparer raised specific, written reconciliation questions regarding multiple tax years and multiple IRS forms in September 2020, while the issues were still correctable.

3. UC restricted communication channels during the COVID-19 period and expressly directed retirees to use centralized systems such as UCRAYS and fax for urgent matters, as described in Section VII.C. Harold and his tax preparer attempted to reconcile UC’s tax reporting within the framework UC itself mandated.

4. UC failed to respond to those reconciliation efforts and later produced no amended tax forms, written explanations, or system records reflecting any review or correction, notwithstanding documented outreach through UC-designated channels, as described in Section VII.D.

5. UC affirmatively represented health coverage status to the Internal Revenue Service in 2020 through its issuance of IRS Form 1095-B, which by law was required to be furnished by January 31, 2021. As established in Section VII.A, UC represented that Harold, his spouse, and his son Max Harold were covered for all twelve months of 2020.

6. UC’s 2020 Form 1095-B reflected dependent coverage for Max Harold beyond the standard ACA age cutoff, a representation that could only be accurate if UC treated Max Harold as eligible under a disability-based or equivalent special-status exception.

7. In February–March 2021, UC Benefits employee Ida Fong contacted Harold regarding Max Harold’s coverage, stated that UC’s system listed Max as disabled, and acknowledged in writing that UC could not locate prior records because legacy records were lost during system upgrades. As shown in Section VII.A and VII.E, this communication occurred after UC had already represented coverage to the IRS for 2020.

8. UC subsequently corrected the dependent-level coverage representation by removing Max Harold from its 2021 Form 1095-B, while leaving unresolved Harold’s underlying disability classification, tax treatment, and benefit status. This selective correction demonstrates that UC addressed a downstream consequence without correcting the upstream classification error that caused it.

9. UC employees admitted in writing that historical records were lost or not recovered during system migrations, and this admission is temporally corroborated by a documented sequence of University of California and Anthem data breaches occurring during the same COVID-era period, as described in Section VII.E and VII.F.

10. UC later asserted that historical tax and benefits records do not exist or are retained only for limited periods, yet objective system evidence shows that UC retained and made available historical tax records spanning more than a decade as late as August 2022, undermining post-hoc claims of routine non-retention, as established in Sections VI and VII.

11. The absence of records is inconsistent with documented actions taken by Harold and third-party professionals and is consistent with record loss, failed migration, or system degradation occurring after the relevant events, rather than with waiver, inaction, or delay by Harold.

12. The resulting tax harm, quantified in Section VI, flowed from UC’s reporting decisions and record failures, not from any failure by Harold to timely raise concerns or seek correction. The evidentiary record demonstrates repeated, contemporaneous attempts to reconcile discrepancies that were met with non-response and later explanations of record loss.

Taken together, these facts establish that UC’s tax reporting errors, benefit classification inconsistencies, and subsequent inability to produce records arose from UC’s own actions and system failures during the COVID-19 and data-breach period. The record does not support any conclusion that Harold acquiesced in, caused, or delayed correction of the errors that produced the documented financial harm.

This analysis was prepared from original UC 1099-R documents on file.