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Success Stories

$7 Million Tax Refund

International Multi-Product Manufacturer

The Problem: Our client sold its Missouri-based subsidiary, recognizing a substantial gain. Its Big 4 tax return preparer did not communicate that an available statutory election to file a Missouri tax return on a consolidated basis would afford a substantial apportionment reduction in the state, and thus mitigate the effects of the extraordinary capital gain. Instead, the return was prepared and filed under the “same as last year” method and tax of $6.3 million was paid.

The Solution: We conducted our signature Reverse Income Tax Audit, identifying this and other opportunities. We prepared an amended tax return with the subject election that was initially denied by the Department of Revenue. Working closely with local counsel, we pursued the case through all levels of judicial review, ultimately winning a $7.0 million refund with interest at the Missouri Supreme Court for our client.

$11 Million Assessment Reduction

Fortune 50 Manufacturer

The Problem: Massachusetts assessed our client more than $12 million in tax over a 3-year audit period.

The Solution: Using our deep Massachusetts technical knowledge, we prepared complex financial models that allowed calculation of tax liabilities under multiple scenarios. These models demonstrated how for any theory the Department of Revenue could use to assign additional liability for an entity, there was either an offsetting expense that was not being taken into account, or an offsetting refund that would be due to an affiliated entity. When the Department would not concede, we appealed to the Appellate Tax Board, participating in multiple settlement conferences with local counsel to advocate a $1 million final settlement with the commonwealth’s litigation counsel. Using care to ensure that the settlement contained favorable language, we ensured specific treatment of certain attributes that insulated our client from additional millions in exposure in later years.

$8 Million Tax Credit Recovery

Fortune 50 Contractor

The Problem: Our client was subject to significant tax liability in a Midwestern state during years when a profitable subsidiary was based in the state. Millions in tax credits generated years earlier were believed lost under the advice of local counsel, a Big 4 accounting firm and others.

The Solution: We performed an independent analysis of the tax credit status and developed a novel basis for reviving the credit. Working closely with non-tax officials at the state, we were able to retroactively qualify our client for the credit. We prepared an amended return, and a refund was received by the client within 60 days of the filing without dispute from the Department of Revenue.

$1 Million Telecom Excise Refund

Worldwide Information Services Provider

The Problem: A one-time refund opportunity for the Federal Telecom Excise followed taxpayer-favorable legal decisions. Our client incurred millions in telecom expense each year, but the recordkeeping was in paper form and determining a refund amount was administratively prohibitive.

The Solution: We determined that the refund opportunity was amenable to a statistical analysis. Working closely with a Boston University statistician, we developed a valid sampling strategy, then spent days in a storage warehouse locating relevant records and tabulating refundable excise. Based on this analysis, the client was able to claim its $1+ million refund from the IRS.