Our client is a Fortune 500 financial institution which operates 1,200 branches and 1,500 ATMs in 15 states in the United States. In addition to traditional banking services, they also offer investment banking services, real estate capital, equipment financing, and capital markets services to large corporate clients nationwide.


Our client made many acquisitions and was responsible for filing amended returns for those acquisitions in many different taxing jurisdictions due to the finalization of pre-acquisition IRS audits. In addition, the IRS had concluded a multi-cycle audit on the company. At the close of the federal audits, our client was required to file over 1,000 state and local amended tax returns in a short time frame, with the potential of creating millions of dollars in additional state tax payments due. As the IRS audits were handled by a separate team from the state income tax team, time had elapsed between the finalization date and the date the state income tax team was notified internally. As such, our client was looking for a provider with the ability to determine the best course of action to minimize penalties and interest as a result of the internal delay and process any late returns immediately. After considering many options, including completing the returns in-house, hiring a dedicated resource, or co-sourcing, they awarded the project to DMA.


DMA’s tax professionals worked closely with the client to define the scope of the project and prioritize the work at hand, including procuring the data required from multiple locations and in various formats, and determining those states where the most risk existed due to the internal delay. DMA reviewed all available information prior to procurement and was able to prioritize those income tax returns representing the greatest risk for interest and other punitive actions. Our professionals had a tremendous amount of experience in the industry and with state-specific due dates, definitions of final determinations and interest and penalties statutes. As such, we were able to minimize penalties and interest on the material states, exceeding our client’s needs and requests.


Initially viewed by the client as a simple compliance engagement, DMA’s multi-team approach focused on providing both a review team and a dedicated compliance team. This approach brought additional value to the engagement by finding strategic ways to minimize the net tax and interest paid to the states by incorporating overpayment review issues. As a result of the engagement, the client was able to focus its internal resources on more current year activities and tax planning, while instituting a sustainable process for handling RAR compliance. Additionally, the company realized over $5 million in tax savings, offsets, and interest payment reductions. This represented an approximate 50% reduction to additional tax and interest expected to be paid.


DMA’s State Income & Franchise Tax Recovery service is designed to identify and obtain all state income and franchise tax refund opportunities for all periods open according to the statutes of limitations. It can be performed in conjunction with our RAR Compliance Services. DMA’s RAR Compliance is a complete outsourced solution for the state reporting requirements resulting from the settlement of your Federal tax audit, which signals the start of the state RAR compliance burden. RAR filing deadlines are short, new projects are assigned, and routine day-to-day work can consume most of your time. DMA’s experienced tax professionals with state-specific expertise can reduce your burden by preparing and reviewing your returns.

“Our company had gone through a lot of growth due to acquiring several financial institutions in a short period of time. We found that there were a lot of IRS audits in process, which meant that our tax team was overwhelmed with more work than we had anticipated. The experts at DMA jumped right in and made quick work of our amended returns and ensured we were in compliance, allowing us to focus on current year and future planning. That alone made DMA invaluable. However, what we didn’t expect was DMA’s tax team going the extra mile to find ways to cut our tax and interest owed in half… and find us millions in future tax savings. They truly felt like a part of our own staff, working in the best interest of our company.”