Truck trailer dealer saves more than $1 million in excise tax

Authored by Ryan Lardinois

Our client's need

A truck trailer dealer was near the end of an IRS excise tax examination related to the import and sale of its trailers. The IRS proposed adjustments to the dealer’s heavy truck excise tax liability that would have seriously impacted its financial situation and business operations. The dealer’s former representatives advised the client that the IRS's position was correct and that the client should agree to the adjustments and pay the liability. The truck trailer dealer’s executive leadership reached out to Baker Tilly IRS practice and procedures specialists for a second opinion.

Baker Tilly's Solution

With only days left prior to the conclusion of the examination, Baker Tilly reviewed the client's entire file and all correspondence between the client, the IRS, and the former representatives. Baker Tilly concluded that the former representatives and the IRS incorrectly analyzed the facts and the law. Baker Tilly quickly began to remedy the situation by obtaining power of attorney from the client and securing an extension of time to respond to the IRS agent's request. Baker Tilly prepared and submitted to the agent a comprehensive written protest that carefully documented the client's position.

Results

After review, the IRS Agent agreed with Baker Tilly's analysis under Internal Revenue Code (IRC) section 4051 and, in lieu of the original proposed adjustments, issued the client a "no-change" letter. Baker Tilly's prompt action and attention to detail saved the new client more than $1 million in excise tax that the client would have otherwise agreed to pay pursuant to previous erroneous advice.

For more information on this topic, or to learn how Baker Tilly tax specialists can help, contact our team.