Federal Case Study

Multi-National Electrical Utility Company

This large Electrical Utility company with sales of over $17 billion and employing approximately 14,000 employees in the US and Canada needed assistance with the calculation of the correct amount of overpayment interest it received in 2016.
In 2016, the company settled it’s 2006 tax year with the IRS, which resulted in a refund being paid with interest. The company believed the amount of overpayment interest was calculated incorrectly by the IRS and informally requested a recalculation by the IRS. After receiving a denial by the IRS, the company employed Ashland to conduct a Complex Interest Review.
Ashland requested transcripts that included not only income taxes but also employment and taxes for all of the relevant periods. Because the statute of limitations for overpayment interest is different than the statute of limitations for assessments, netting opportunities are sometimes available in years much earlier than the taxpayer realizes. They can also be available in some cases, based on the overpayment of interest in the module or employment taxes in the same TIN. Ashland conducted a full Complex Interest Calculation Study, including a Netting Study. Claims were prepared by Ashland and filed by the company for tax years 1987, 2006, and tax period 2013/09.

Total interest recovered: $960,000