The calculation of the correct amount of interest resulting from overpayments and underpayments is a highly complex area that is not computed by the IRS and/or state taxing authorities in the optimal manner for taxpayers. Factors suggesting a refund opportunity include:
- Federal and State Audits resulting in deficiencies
- Any federal tax Assessments
- Carryback claim
- Mergers and/or acquisitions, and
- Refunds received in the last 6 years.
Scope of Services
Information Gathering
We will work with you to collect and evaluate information necessary to substantively document and support a refund claim. Initially, all we will need is a power of attorney to collect your transcript to identify potential refund opportunities.
Information Analysis
We will analyze the information collected and reconcile to the appropriate interest charge or refund amount. We will then provide feedback on adequacy of data to support our calculations. Once the supporting information is gathered and reconciled, we will be responsible for preparation of supporting interest refund claim including detailed schedules supporting interest refund claim.
The main areas of our review will include the following:
- Computational errors in IRS and other tax authorities programs for computing interest;
- Mismatch of credits and payments against amounts owing;
- Improper use of dates for filings and payments;
- Improper start date for computation of interest on credit elects;
- Improper ordering and use of overpayments against estimated tax installments;
- Improper application of the “use of money principal” as provided under case law;
- Netting opportunities for mergers and acquisitions;
- Netting opportunities across federal tax categories, including employment taxes and excise taxes;
- Improper application of foreign and other tax credits in computing tax and interest due.
Audit Representation
Generally, tax refund claims will be substantively reviewed and audited by the states and/or the IRS. Under a limited Power of Attorney, we provide audit representation services after you are notified that the refund is under examination. With your oversight and approval, we will represent you in the review of the interest claim.
Annual Transcript Recovery Review
We will perform an annual FIRRE review within 60 days following the close of your tax year-end. We will pursue any new recoveries on your behalf and provide you with a report with our findings. Our report will specifically advise you of any new penalties applied to your federal tax transcripts (e.g. employment tax) along with an explanation of the interest, penalty or other account transcript related recoveries identified.
If you’ve had assessment payments in the last six years that exceeded your cumulative potential interest off-set items (e.g. credit elect, refunds etc.), we will carefully review all your federal transcripts for all affiliates (including new acquisitions) for new opportunities to off-set cumulative excess tax underpayments for interest netting opportunities.
Performing an annual transcript FIRRE analysis will allow you to identify penalty mitigation opportunities and insure that the statute does not close on interest recovery opportunities.
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