“STAR” STatutory Account Review - Retrospective Research and Recovery
What is your Employment Tax Account health?
The Employment Tax Specialists at ETS have performed thousands of reviews, netting millions of dollars in employment tax refunds, determining areas of open reporting / compliance issues, and identifying process improvements for our clients. Our Credit Plus STAR review helps recover eligible over-payments and establishes an employment tax health baseline from which to measure your employment tax account effectiveness going forward.
Over-payments can occur in numerous ways. Here are three common scenarios:
- After M&A activity, an acquirer may have rights to previous predecessor employment tax contributions and experience ratings. Employee migrations and related rights are subject to a complex myriad of tax laws (which vary by jurisdiction) and many other factors.
- A change in corporate status to an LLC or LLP may carry employment tax rights which companies often overlook.
- Commonly overlooked errors, such as incorrect reporting numbers and duplicate reporting, often result in overpayment of tax.
ETS can help. Through our contingency-based STAR Program, we identify eligible recoveries triggered by historical M&A and prior employment tax account activity, still within statutes of limitations. STAR also brings to light outstanding and potentially unrecognized compliance issues- thus limiting penalties and interest while maintaining compliance. Clients often request a STAR review in the wake of an acquisition, merger, divestiture, IPO, other public or private sale of securities, or any other event where unrecognized / undisclosed liabilities or compliance issues could result in serious legal or financial exposure.
We engage the situation after the fact (but within statutes) to perform a comprehensive historical review of tax accounts and identify areas of potential savings and non-compliance. From there, we use our in-depth knowledge of federal and state employment tax law — and our familiarity with the agencies involved — to interact with the taxing authorities for the benefit of the client.
Although most often used by employers with transitional events or transactions, the STAR program is also appropriate for any employer with over 1000 employees, as our review performs a comprehensive overall employment tax account analysis that establishes an "employment tax health baseline" and often locates embedded over-payments eligible for refund recovery.
As we work directly with our agency and payroll vendor counterparts, the time needed by our clients is typically limited to 1 – 3 hours over our 1 – 3 months research period. Upon completion, we provide the client with an Executive Summary “Exception” Report defining all balancing and / or reporting issues on a legal entity / state / UI account / quarter-year basis. Where applicable, we take responsibility of the recovery until the actual refund is provided to you!
Result: ETS generates refunds and future savings where allowable by statute, while limiting potential penalties by identifying compliance issues. Please see how ETS achieved these results in a recent case.