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Advocate Networks Taps Data for SavingsThe financial folks at Mirant like "found money" as much as anyone, but it didn't seem like going after a Telecom Federal Excise Tax (FET) refund was worth their time.
"We looked at it internally several times," says Sharon Hall, the energy company's director for tax. "We had manpower constraints, and it seemed time-consuming to go after the refund. When we talked to outside firms, they wanted to charge a lot to do the analysis."
Taking the government up on the refund seemed like a lost cause until Advocate Network's TeleRazor subsidiary entered the picture.
"We were already doing FET refunds for other clients," says Advocate Networks co-president Scott Fogle. "That meant we knew how to do the analysis. We also had access to the necessary data since TeleRazor Technologies was managing Mirant's telecom and wireless services."
"Scott thought there wouldn't be that much cost to do the analysis," Hall says. "He gave us a fixed price and a projection for savings."
TeleRazor staff reviewed Mirant's calling data using the standard and itemized methods. IRS rules allow a company to submit the results that generate the largest refund. In Mirant's case, the standardized method was more lucrative.
"It wasn't a highly complex tax issue," Hall says. "But we needed someone who was familiar with our reports and schedules. Advocate Networks had no problem getting everything they needed."
The analysis uncovered a refund of $85,000 plus $11,600 in interest, Hall says. The original projection had suggested a bigger refund might be possible, but the actual data revealed that Mirant employees are heavy users of cell phones and personal digital assistants (PDA), which often don't incur long-distance charges.
"Still, it was 'found money' for us," Hall says. "We had basically walked away from the refund program because the initial cost-benefit analysis didn’t seem to make it worth the staff hours it would have required, until we had Telerazor and the Advocate Network’s help."
It's sometimes stressful working with outside vendors, Hall says. But that wasn't the case here. "Scott said they would handle everything from soup to nuts, and they did," she says.
Advocate Networks wrapped up the project by delivering a well-organized binder with all the analysis and supporting documentation. Hall says she wishes all vendors were this detail oriented. "A good presentation and documentation lend a certain credibility to an organization's data," she says. "With our information compiled and in place we are audit-ready."