Letter, Marywood University Fiscal Services to Synergi Partners (May 27, 2022) — Document 1-5

Summary

Document 1-5 is Exhibit D in Case 3:22-cv-00991-JFS, filed June 22, 2022: a letter dated May 27, 2022 from Marywood University Fiscal Services to Stephen Toniolo, Tax Service Manager at Synergi Partners, about the Client Services Agreement dated March 9, 2021. The letter states that Synergi purported to identify a CARES Act Employee Retention Credit of $6,012,944.15 and appears to be charging a fee of $901,941.62. It states that CliftonLarsonAllen LLP, engaged for a second opinion, concluded Marywood is not eligible for any tax credit under the CARES Act. It closes with the statement that Marywood has no legal obligation to pay any sums to Synergi, over the name William McDonald, Vice President for Finance and Administration.

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Case 3:22-cv-00991-JFS Document 1-5 Filed 06/22/22 Page 2 of 3

Marywood

UNIVERSITY
Fiscal Services

May 27, 2022

Stephen Toniolo

Tax Service Manager
Synergi Partners

151 West Evans Street
Florence, SC 29502

Re: Synergi Partners Client Services Agreement Between Marywood University And
Synergi Partners dtd. March 9, 2021 (the” Agreement”)

Dear Mr. Toniolo:

We write to you concerning the above-identified Agreement and invoices you have sent to
Marywood University (“Marywood”) pursuant to that Agreement. Synergi Partners (“Synergi”)
has purported to identify a tax credit for Marywood, specifically, a CARES Act Employee
Retention Credit (the “Tax Credit”) in a supposedly exact amount of $6,012,944.15 (the “Tax
Credit”. For identifying this purported Tax Credit, Synergi appears to be charging Marywood a
fee or commission in the amount of $901,941.62.

Marywood is a non-profit, Catholic institution of higher learning and is run very
conservatively, including from a financial perspective. Because of what appeared to be the huge
amount of Tax Credit identified by Synergi—over $6 million—and several discrepancies in the
invoices and the Agreement itself which call into question Synergi’s services and expertise,
Marywood decided to engage CliftonLarsonAllen LLP (“CLA”), a full services accounting firm,
to obtain a “second opinion” as to Synergi’s conclusions. In short, CLA concluded that Marywood
is not eligible to avail itself of any tax credit under the CARES Act and related guidance, let alone
the $6 million tax credit identified by Synergi.

Upon review of the Agreement and invoices sent thereunder, we have noticed the following
puzzling discrepancies. At the end of the Agreement, Synergi states:

MISCELLANEOUS. Synergi DOES NOT provide tax advice, tax
filings or CPA services. Synergi is not a tax preparer or accountant
and therefore explicitly disclaims any and all responsibility for
preparation of a Client’s federal or state tax returns. Synergi will
not render or be required to render any service that could be
interpreted as the practice of accounting.

Yet, in section of the Agreement entitled SCOPE OF THE ENGAGMENT; SERVICES,
the very purpose of the Agreement was for Synergi to provide tax advice and accounting services
to Marywood, including reviewing Marywood’s books and records, computing the appropriate tax
credit and delivering to Marywood “a Tax Credit Package...that includes an eligibility analysis,

2300 ADAMS AVE., SCRANTON, PA 18509-1598 | PHONE: 570.348.6293 | MARYWOOD.EDU
Case 3:22-cv-00991-JFS Document 1-5 Filed 06/22/22 Page 3of3

Stephen Toniolo

Tax Service Manager
Synergi Partners
May 27, 2022

Page 2

applicable supporting schedules, and a Calculation of credits based on applicable law (the “Tax
Credit Package”). Synergi also agreed to provide to Marywood “internal, external and IRS audit
support.”

In short, the Agreement appears to disclaim the very services that Synergi agreed to provide
to Marywood, and is now attempting to charge Marywood for. Between the foregoing
contradictory clauses in the Agreement, and an actual accounting firm’s conclusion that Marywood
is not eligible for the Tax Credit in the amount of $6 million identified by Synergi, it is difficult
for Marywood to understand exactly what analysis, services and work Marywood is being charged
for. Finally, you are listed on the invoices as Synergi’s “Tax Service Manager,” a puzzling title
when Synergi states in the Agreement it does not provide any such services.

Marywood is equally concerned about the position that is apparently taken by Synergy,
namely, that it does not matter if an accredited, reputable and full-service accounting firm
determines that Marywood was not eligible for the Tax Credit, and that Synergy’s mere word that
Marywood is so eligible is enough to trigger a nearly $1 million payment owed by Marywood to
Synergy. As I am sure you can see, Marywood is caught between a “rock and a hard place”—it
does not want to claim a Tax Credit it is not eligible for and risk negative consequences from the
Internal Revenue Service or other applicable government authorities, and it merely has Synergy’s
“say so” that it is eligible for the Tax Credit, and CLA’s more extensive opinion that it is not so
eligible.

Since Marywood is not, and never was eligible for the Tax Credit, Marywood has no legal
obligation to pay any sums to Synergi.

Sincerely,

William McDonald
Vice President for Finance and Administration


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