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Case Study:

Manufacturer Reaps $100,000-plus in Annual Tax Savings After Fischer Cunnane Reviews Corporate Tax Structure

The Problem

Success breeds complexity—especially when it comes to taxes.

Such was the case for a Pennsylvania-based manufacturer that had grown to comprise 14 subsidiaries in multiple states, creating tax liabilities in almost every state. This complexity called for a comprehensive tax strategy. However, the manufacturer’s executive team, focused on maximizing shareholder value and growing the business through acquisition, intentionally operated with a lean corporate staff. Building an in-house tax department with the kind of specialized income tax expertise they needed just didn’t make sense.

The Solution

To manage these tax complexities, the executive team brought in Fischer Cunnane as the company’s outsourced tax department. Initially, the team was charged with preparing and filing all of the company’s state, local and federal returns—nearly 50 in all—as well as accounting for income taxes on the company’s general ledger and financial statements.

The tax consultant leading the team, a former VP and treasurer of a multi-billion dollar public company with more than 40 years of experience, saw an even greater opportunity.

Within a short period of time, the consultant spotted opportunities to improve the tax efficiency of the manufacturer’s organizational structure. He noticed the company was accumulating net operating losses in certain entities for which it was getting no tax benefit. Intrigued by these insights, management hired Fischer Cunnane to conduct a comprehensive study of the corporate structure.

The Results

By recommending a more tax-efficient structure, Fischer Cunnane saved the company more than $100,000 in annual taxes – most of which was painless to implement. When the Fischer Cunnane team presented the tax-saving recommendations, they rated each one according to degree of difficulty and estimated bottom-line impact. As a result, the client was able to reap the greatest amount of net savings with the lowest level of difficulty.

In addition to these annual tax savings, the Fischer Cunnane tax team identified significant one-time tax savings. In the course of reviewing the company’s previously filed tax returns, they found deductions and credits that were available but had not been taken—to the tune of $75,000.

After seeing Fischer Cunnane’s willingness to dig deep to find opportunities to increase tax efficiency, the company’s CFO began identifying additional ways to utilize this taxation brain trust. From accounting and reporting to due diligence on the tax structure of potential acquisition targets, the CFO knows he can count on his “outsourced tax department” to cover all the company’s financial bases.

Is growth creating tax complexity? Fischer Cunnane’s experienced tax consultants can help your organization achieve maximum tax efficiency. Call us at 610.431.1003.