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A not-for-profit company based in Washington, D.C. with approximately 35,000 employees and roughly 700 locations throughout the United States, has a shared service center that acts as a centralized accounts payable function for the company’s main locations. The company electronically scans its invoices and was able to provide Altus with an electronic download of its accounts payable activity. This particular not-for-profit entity is exempt from state and local sales & use tax by virtue of its IRS classification as a 501(c)(3). State and local sales taxes are not always easily noticeable on certain invoices with complex pricing structures. These charges may be located deep within the invoice or may be lumped together in the standard charge for the service.




Altus Group was engaged to review the company’s accounts payable records for possible overpayments of sales tax. Using the data provided in the company’s electronic download, we were able to apply our experience and identify a select group of vendors that warranted a closer review. This list of vendors was then stratified using an 80/20 rule. We determined that approximately 20% of the vendors would likely be responsible for 80% of overpayments based upon the annual spend with these vendors.




Initially, invoices from each vendor were reviewed on a sample basis to determine if overpayments of sales tax existed. The company was able to provide remote access to their scanned invoices. As a result, we were able to perform our review from our office with no disruption of the company’s daily operations. After preparing a projection of estimated tax recoveries, our initial review was then expanded to those vendors from whom the sample and projection revealed material overpayments of sales tax. We reviewed all identified vendor invoices and quantified refunds related to each vendor.  We filed refund claims on behalf of the company directly with the identified vendors and consistently followed-up with each to ensure quick realization of the requested refunds.  In addition, letters were sent to each vendor to update their records to mark the client’s account as tax-exempt, providing the required documentation to each.




As a result of persistent follow-up, we were able to successfully recover nearly $600K in overpaid sales and use tax related to prior periods still open under statute.  These savings will continue in perpetuity as the company followed our recommendations and implemented corrective actions to ensure that such overpayments do not happen in the future.

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