Slashing Audit Liability & Exposure for an Industry Leader

This Merit Advisors client is a large, publicly traded midstream energy company.

Challenge:

• The company faced a $9 million use tax liability from a Texas audit.
• An ineffective compliance program misaccrued $6 million in use tax on non-taxable transactions and failed to remit any of it, resulting in exposure.

Merit Solution:

• Merit defended the audit, successfully reducing our client’s liability through robust research and careful coordination in gathering and presenting support for qualified exemptions.
• Our sales and use tax team reviewed the unremitted tax to quantify the actual amount and remit it to the correct jurisdiction.

Result:

Following the audit defense and remittance of unpaid taxes, Merit developed a new use tax compliance process to reduce our client’s exposure going forward.

97%

Reduction in Audit Liability

$6 Million

Tax Exposure Eliminated