Case Study

RadiusPoint’s Support Desk was contracted to perform the Federal Excise Tax  research needed for this Fortune 100 manufacturing company to recover excise  taxes paid on their telecom invoices for a three year period.

The recovery  stemmed from the repeal of the Federal Excise Tax that was deemed invalid May  2006.  The tax, which was first created in 1898 to help finance the Spanish- American  War, most recently was charged at a rate equal to 3% of the total spent on long  distance, cellular and local calls. The tax law states that all toll charges are based on  time and distance. Several years have passed since toll charges have been billed as  both time and distance sensitive.

In recent years, the charge has been based on  the number or fraction of minutes used by the consumer.  OfficeMax among other large organizations filed a suit against the IRS regarding  the collection of the excise tax, citing that their tax was not being levied against  time and distance sensitive toll charges. This type of toll charge was assessed as  time sensitive only and that the distance was no longer a factor. This change in the  billing practices of the long distance carriers invalidated the 3% tax. After several  years of battling, the IRS conceded and agreed to credit back the taxes billed for  the past forty-one (41) months for all consumers.

Many organizations looked at this as a major win since the removal of the Excise  tax against the toll charges would mean an instant three percent (3%) savings on  future invoices. The potential of a recovery of the past forty-one (41) months was  much more daunting since the invoices had to be reviewed manually to extract  the necessary data to provide to the IRS for the refund.  Results  This Fortune 100 client of RadiusPoint was provided the research by the Support  Desk department to gather the necessary data and documents to submit to the  IRS to obtain over $1,087,000.00 in recoveries.

The necessary data was readily  available in the ExpenseLogic software system that RadiusPoint uses on a  monthly basis to manage this client’s invoices and expenses. RadiusPoint  performed this work on a project or hourly basis to allow the client to retain as  much of their recovery as possible.

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