Client
Our client is a multinational financial services organization operating across North America, with complex, high-volume transaction activity and established tax compliance processes supported by DMA.
Challenge
During routine review of compliance data and trends, DMA identified that our client’s Illinois use tax remittances appeared disproportionately high for a financial services business, where the majority of spend typically falls under non-taxable services. Our client agreed that the figures didn’t align with expectations and expressed concern over whether internal automation changes may have introduced tax errors.
With significant volumes of transactions moving through this jurisdiction each year, even minor misconfigurations could quickly become costly. The client wanted to understand the source of the overpayments and correct the issue promptly to avoid continued cash loss.
Solution
Because DMA already handled the client’s compliance, the consulting team was able to immediately begin analysis using the same data flowing through the monthly filings. This expedited the discovery phase and eliminated delays often caused by data gathering.
DMA evaluated purchase-level taxability and sourcing logic and uncovered inaccuracies tied to recent system rule changes. Transactions that should have been categorized as non-taxable services were instead treated as taxable. In addition, many charges that were properly associated with activity in other states—such as where the client is headquartered—were mistakenly sourced into Illinois. DMA quantified the errors, presented a clear recovery path, and was authorized to prepare and file amended returns with the Illinois Department of Revenue.
RESULT
Within just four months from initial conversation to final approval and obtaining the resulting credits, the client secured more than $2.26 million in refunded tax and interest. The corrected taxability and sourcing rules made immediate improvements to future-state accuracy. The engagement not only recovered past tax but also eliminated the root cause—protecting future spend while improving compliance accuracy.
WHY DMA?
DMA demonstrated the power of a compliance relationship that extends beyond filing returns. Our proactive monitoring detected a pattern that the client could act on before an audit brought attention to the issue. The trusted working relationship made it easy for the company to engage DMA to confirm the problem and manage the recovery end-to-end.
Because all compliance and consulting efforts remained under one roof, DMA swiftly mobilized the expertise needed, from identifying erroneous tax to pursuing the refund and ensuring long-term process correction. And with decades of jurisdiction-specific experience in Illinois, our team knew exactly what levels of documentation and support were necessary to successfully navigate and conclude the project, including the unique aspect of credit issuance by the Illinois Department of Revenue.
By turning insights into action and recovery into protection, DMA helped the client reclaim millions in overpaid taxes and safeguard millions more in the years ahead.
Stop Overpaying Use Tax
DMA’s team of transaction tax compliance experts can save you time, money, resources—and sanity. Find out how.