McGladrey's Sales & Use Practice

Sales and use tax Statement of qualifications

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Sales and use tax services

A company’s approach to sales and use tax can be a vital component of its financial and operational

strategy. With over 7,500 taxing jurisdictions and more than 10,000 transaction tax rates, sales and use

tax compliance represents a significant area for risk—either through compliance deficiencies or lost

opportunities. Companies struggle to staff their tax departments with the combination of skills and depth

of experience needed to manage the increasingly complicated demands of sales and use tax compliance.

McGladrey has more than 50 sales and use tax professionals with experience spanning myriad taxing

jurisdictions, industries, business types and automation platforms, allowing us to customize client service

teams to meet the distinct sales and use tax challenges of any business.

From third-party process reviews and recommendations to complete outsourcing of the sales and use tax

function, McGladrey helps companies gain confidence in how sales and use tax responsibilities are

managed. We provide assistance throughout the sales and use tax function.

Process design

Nexus analysis

Refund identification

Exemption management

Compliance

Optimization

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Specialty sales and use tax consulting

Process review services

Affected by legislative changes, business operations and environmental conditions, the sales and use tax

function is complex and impacts numerous areas of business accounting. Situations including growth into

new markets, expansion of products and services, employee turnover or lack of multistate tax expertise

can cause your internal processes to become disconnected from current tax law over time. A third-party

sales and use tax process review can bring those concerns to light, creating opportunity for refunds and

risk mitigation.

To provide a thorough review of the sales and use tax function, our team takes time to fully understand

the business and existing processes. We schedule efficient individual and group interviews to outline the

systems, policies, procedures, data and resources comprising the current process, as well as identify

where that process may break down in practice.

The end result of a McGladrey sales and use tax process review is a detailed report outlining gaps in the

current sales and use tax function that can create audit or financial risk or provide for refund

opportunities. The areas of concern are prioritized according to tax impact and discussed with the

management team to determine which process improvements to implement, the effort involved to mitigate

the risk and the best approach to do so.

Reverse audits

In a reverse audit, the focus is on compliance corrections. Taking a close look at the processes involved

with paying sales and use tax or self-assessing consumer’s use tax and the supporting documentation,

we determine whether there are overpayments or underpayments that should be corrected. Depending

on results, McGladrey may assist with refund claims or voluntary disclosure agreements and contractual

registrations with the appropriate taxing authorities. Reverse audits are not designed to provide a

thorough look at the overall tax function, but rather a comprehensive review of whether a company is

paying the correct amount of tax on its purchases. In addition, we identify and report process-related

concerns pertaining to past use tax misfilings, while offering suggestions for improvements. During the

course of a sales and use tax refund project, our professionals:

Acquire a thorough understanding of the sales and use tax compliance process

Obtain an electronically downloaded accounts payable paid transactions data file

Perform initial review and analysis of historical sales and purchasing activity prior to an onsite

visit

Identify sales and purchases transactions that are statutorily exempt from sales and use tax

Estimate the amount of refunds relating to overpaid sales and use taxes

Identify potential underpayments of use tax to mitigate potential exposure issues

Develop a plan and schedule onsite visits to obtain and compile supporting documentation to

substantiate any refunds or credits

Review tax

data elements

Conduct

process

interviews

Analyze

results

Identify

audit risk

Assess

tax

impact

Identify

refund

opportunity

Review

detailed

summary

report

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Design

•Identify team, communication protocols

•Define scope

•Conduct internal interviews

•Establish tax decision drivers

Implement

•Consult with installation vendor and internal IT

• Identify tax impact of data elements used as tax drivers

•Assist in identifying data elements for interface between tax platform and ERP or e-commerce

• Create tax product categories and map

•Populate tax matrix

•Write necessary tax assist rules/transeditors

•Identify automation gaps and create necessary processes

Test

•Create test transactions and related scripts

•Validate and document test case results

•Create reports and reconciliations

•Re-test as needed

Support

•Write custom training materials

•Train internal staff on new platform

•Assist with first post-implementation close

•Ensure ability for internal staff to support ongoing training

Provide a summary report that identifies and quantifies the amount of any refund opportunities

Coordinate, prepare and file the refund claim(s) with the appropriate state revenue agency or

vendors

Prepare responses to any questions from the revenue agency or vendors relating to refund

claim(s)

Explain reasons for the tax overpayments

Recommend policy and procedural changes, which can be implemented to ensure future savings

Whether through refund dollars or penalty abatements, a reverse audit can create a significant bottom-

line advantage for businesses that have not recently reviewed their sales and use tax payments and

accrual processes or that have undergone significant business change (growth, contraction, personnel

changes, etc.)

Automation solutions

Sales and use tax automation is an increasingly important piece of the sales and use tax compliance

solution for many companies. Our team is well-versed in the leading third-party sales and use tax

compliance technology, including solutions offered by Vertex, Vertex SMB, Thomson Reuters and

Avalara, as well as other targeted players. Our automation specialists integrate these sales tax

application systems with e-commerce systems, first- and second-tier enterprise resource planning (ERP)

applications such as Oracle, PeopleSoft, SAP, MSDGP, AX, NetSuite and other legacy-based home

grown applications, making them invaluable resources in the software selection, implementation or

optimization process.

We follow a vendor-agnostic selection process designed to make sure businesses understand the

different benefits available from a variety of sales and use tax platforms, which helps ensure an informed

decision based on the best match to business needs. Once a technology platform has been selected,

implementation follows the standard approach below, customized to meet business goals.

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Representative project experience

Project type Industry sector Client location Client benefit

Sales tax automation Manufacturing Detroit Consolidated tax calculations for

15-plus revenue streams and

billing systems to mitigate future

audit risk

Sales tax automation Financial institutions Florida Consolidated procurement and

tax-accrual activities and

achieved a best practices

approach to compliance

Sales tax automation Consumer products Arizona Mitigated sales tax audit risk

through automation and

voluntary disclosures

Technology

implementation

Consumer products

(retail, food and

beverage)

Tennessee Utilized existing tools (Excel and

Access) to streamline data

collection for more efficient

reporting and compliance

consistency

Process review Consumer products

(retail)

Illinois Uncovered and corrected

deficiencies in reporting

environment which helped

during seller’s due diligence

Nexus evaluation Manufacturing (retail) New Jersey Contracted filing requirements in

income and franchise tax and

cleaned up compliance

obligations for sales and use tax

Reverse audit Life sciences North Carolina $7.5 million in sales tax refunds

Reverse audit Consumer products

(software)

Maryland $1.1 million in sales tax refunds

Process review Oil and gas West Virginia $2.2 million in sales tax refunds

and implemented correct

business model to ensure

compliance

Reverse audit Manufacturing

(automobile)

North Carolina $2.4 million in sales tax refunds

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Practice leadership

Sales and use tax compliance and consulting

Steve Riddle, Principal

National Practice Leader

Steve Riddle is based in Denver, where he leads one of two sales and use tax

centers of excellence for the firm. He has 30 years of experience in the sales tax,

use tax, telecommunications, process improvement, automation, and state tax

credits and incentives areas. Steve has performed state and local tax services for

clients in a wide range of industries, including manufacturing, retail,

telecommunications, technology, oil and gas, construction, and services. He is

actively involved with client projects throughout the Central region and responsible for instructing courses

for McGladrey sales and use tax practice professionals nationwide.

James Barash, Director

West Regional Leader

Jim Barash leads the West region sales and use practice out of our Phoenix office.

He brings over 20 years experience in the specialized field of state and local taxes,

including Big Four and industry roles. Jim is well-versed in a range of sales and use

tax issues and has assisted clients with nexus analysis, tax refund recovery,

relocation studies and management of multi-state tax audit representation and

compliance. His industry experience includes high-tech and general manufacturing,

distribution, financial services, healthcare, retail, mining and adult education. Jim has presented on

numerous topics for regional business audiences.

Todd Hendricks, Director

Central Regional Leader

Todd Hendricks is based in the Cedar Rapids, Iowa office and is responsible for

leading the sales and use tax team for the Central region. He provides services

associated with various state and local tax issues, with a primary focus on sales and

use tax refund projects and state tax controversy assistance. In both areas, he

draws on his experience as a former sales and use tax auditor with the Missouri

Department of Revenue. Todd has performed dozens of sales and use tax reviews

in his career, many of which have resulted in significant current and future tax savings. He is a regular

presenter on state and local tax issues at firm-sponsored and external events.

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Tom Chrzanowski, Director

Great Lakes Regional Leader

Tom Chrzanowski serves clients out of the firm’s Indianapolis office, where he leads

the sales and use tax consulting practice for the Great Lakes region. His 18 years of

experience in the legal and public accounting arenas allows him to bring a unique

perspective and spirit of advocacy to his clients’ needs. Tom spends much of his

time in the areas of in-depth multistate and transaction tax analysis, nexus studies,

audit and audit protest representation, negotiated settlements, registrations, and

voluntary disclosure agreements. He has worked extensively for large and medium sized companies in

multiple industries, including manufacturing, distribution, construction, retail, and health care. Prior to

joining McGladrey, Tom was the national sales and use tax leader of a top ten accounting firm and a

senior manager for a Big Four firm.

Dave Elder, Director

Southeast Regional Leader

Dave Elder leads McGladrey’s sales and use tax practice in the Southeast region.

He is based in our West Palm Beach office and also serves as the Florida functional

leader for state and local taxes. Dave has more than 22 years of experience

managing all aspects of state and local tax obligations. Prior to working in public

accounting, he spent five years as a state sales and use tax auditor. Dave provides

clients with insight and clarity surrounding complex tax needs such as managed tax

audits, compliance processes, nexus evaluation, voluntary disclosures, tax audit defense and mitigation,

tax planning strategies, and mergers and acquisitions. Prior to joining McGladrey, Dave was a director in

the state and local tax group with a Big 4 firm, where he serviced clients in the manufacturing, health

care, technology, entertainment and banking market segments.

Catherine Del Re, Partner

Northeast Regional Leader

Catherine Del Re is a partner in the New York office and leads the firm’s sales and

use and unclaimed property teams in the Northeast. She has more than 16 years of

experience with indirect tax issues. Catherine has helped clients address numerous

sales and use tax concerns through nexus reviews, diagnostic reviews, technical

research and indirect tax exposure analyses. She has negotiated multi-state

voluntary disclosure agreements, evaluated sales and use tax compliance practices

and systems, developed SOX-related policies and procedures, performed reserve

analyses and prepared advisory opinions and ruling requests. In addition, Catherine has identified and

secured multi-million dollar sales and use tax refunds on behalf of her clients and provided audit

mitigation services resulting in significant audit assessment reductions.

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Sales and use tax automation

Steve Parish, Principal

National Practice Leader and West Regional Leader

Steve Parish is based out of Charlotte, where he leads one of the firm’s sales and

use tax centers of excellence and is the national leader for the sales and use tax

automation practice. He has more than 30 years of experience providing clients with

transaction tax services and automated tax solutions, including Vertex,

ONESOURCE, Avalara, Vertex SMB and CCH. Steve has helped clients across all

industries, including retail, manufacturing, financial institutions, health care and

more, to gain control over their sales and use tax responsibilities through process improvement and

appropriate automation. He is active on client projects nationwide and regularly speaks at industry events

and vendor user conferences. Steve is also responsible for instructing courses for McGladrey sales and

use tax practice professionals nationwide.

Kevin Buckner, Manager

Central Regional Leader

Kevin Buckner is based in Denver and specializes in sales and use tax, including

sales and use tax automation and outsourcing. He has more than 14 years of tax

and IT consulting experience and is responsible for integrating third-party tax

applications from Vertex, Avalara, CCH and Thomson Reuters with a variety of

client ERP systems. Kevin has provided sales and use tax consulting services to

clients across a range of industries, including health care, manufacturing, energy (oil

and gas), retail, software and telecommunications.

Jonathan Miller, Director

Great Lakes Regional Leader

Jon Miller is a director in McGladrey’s state and local tax practice and has direct

responsibility for sales and use tax automation and outsourcing services. He also

consults with clients on a wide range of sales and use tax issues. Jon has more than

16 years of experience in state and local tax, including six-plus years in public

accounting. Prior to joining McGladrey, he was an audit supervisor for the North

Carolina Department of Revenue. Jon has addressed various sales and use tax

issues for clients in the health care, manufacturing, banking and retail industries. He

serves as the sales and use tax automation lead for the Great Lakes area out of our Charlotte office,

working closely with the local office members of our sales and use tax practice.

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Lauren Jones, Manager

Southeast Regional Leader

Lauren Jones is a state and local tax manager located in our Charlotte office. She is

focused on the effective integration of automated sales tax solutions to manage and

improve clients’ overall sales tax compliance function. Lauren has successfully

integrated Vertex, ONESOURCE, Avalara and Oracle eBusiness Tax with various

ERP packages such as PeopleSoft, SAP, MS Dynamics GP and other proprietary

legacy systems. Lauren also manages McGladrey’s sales tax outsourcing service

center and assists with traditional sales tax consulting services such as process

analysis and improvement, contractual registration, refund analysis, voluntary disclosure, managed audits

and audit defense.

Michael Giannettino, Director

Northeast Regional Leader

Michael Giannettino is based in the New York office and leads the sales and use tax

automation practice in the Northeast. His experience spans various types of indirect

taxes including sales and use, gross receipts, excise and unclaimed property.

Michael is responsible for understanding the sale and use tax automation needs of

our clients throughout the Northeast. He has implemented various sales and use tax

technologies, including ONESOURCE Indirect Tax Determination, Vertex Q Series

and Vertex O Series with various ERP systems. During his 18 years with Big Four

public accounting firms, Michael served clients in industries including manufacturing, pharmaceuticals,

retail, financial services and consumer industrial products.

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National practice team

Team member Title Location

Denny Craul Manager Blue Bell, Pa.

Lu Awdeh Director Boston

John Cavanaugh Director Boston

Todd Hendricks Director Cedar Rapids, Iowa

Heather Koob Associate Charlotte

Sharon Gaston Client Service Representative Charlotte

Danielle Hunt Client Service Representative Charlotte

Dennis Hobbs Director Charlotte

Jon Miller Director Charlotte

Andrienne Mays Manager Charlotte

Lauren Jones Manager Charlotte

Steve Parish Principal Charlotte

John Clark Senior Associate Charlotte

Hien Nguyen Supervisor Charlotte

Bob Kolosky Director Chicago

Joseph Patla Manager Chicago

Chuck Pribble Supervisor Chicago

Michael Baker Director Cleveland

Matthew Shaw Supervisor Cleveland

Joshua Zamarron Associate Dallas

Melissa Wofford Director Dallas

Regina Johnson Senior Associate Dallas

Laura Dion Supervisor Davenport, Iowa

Jared Rubinoff Associate Denver

Jim O’Toole Director Denver

Kevin Buckner Manager Denver

Steve Riddle Principal Denver

Brad Hershberger Partner Des Moines, Iowa

Joel Anderson Senior Associate Des Moines, Iowa

Janet Iversen Supervisor Des Moines, Iowa

Cody Edwards Supervisor Des Moines, Iowa

Jennifer Hawkins Supervisor Elkhart, Ind.

Art Arbuckle Director Indianapolis

Tom Chrzanowski Director Indianapolis

Yudit Freda Director Irvine, Calif.

Chris Baltimore Director Kansas City, Mo.

Scott Durham Supervisor Kansas City, Mo.

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Team member Title Location

Pat Carney Director Los Angeles

Scott Nichols Director Minneapolis

Seth Doorn Supervisor Minneapolis

Michael Giannettino Director New York

Chris Cunningham Manager New York

Catherine Del Re Partner New York

Chandini Jaisinghani Senior Associate New York

Kevin Foral Manager Omaha

Evan Fullmer Senior Associate Omaha

Nisha Madhav Senior Associate Orlando

Jim Barash Director Phoenix

Brooke Wilson Manager Phoenix

Nicholas Walters Supervisor Phoenix

John Wojcik Director Schaumburg, Ill.

Eric Manus Manager Schaumburg, Ill.

Stan Nicman Director Seattle

Steve Jensen Director Seattle

Matt Glaude Manager Stamford, Conn.

Kirsten Moritz-Baune Manager Tacoma, Wash.

Dave Elder Director West Palm Beach

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About McGladrey

McGladrey is a leading provider of assurance, tax and consulting services focused on the middle market.

We guide our clients through complex business challenges by understanding their needs and bringing

together the right team to address them.

With more than 7,000 people in 75 U.S. cities—and access to more than 32,000 people in 100 countries

through our membership in RSM International—we can handle your needs wherever you do business.

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Publications and webcasts

McGladrey produces a variety of technical and advisory publications that cover information about current

events and changes in laws and regulations.

Examples of available communications include:

Real Estate Insights. A quarterly newsletter providing accounting, tax and business insights for real

estate focused organizations

McGladrey Tax Digest. A monthly newsletter highlighting tax developments of interest to today’s

companies

McGladrey Tax Alerts. Timely notifications on tax developments that may have an immediate impact

on you and your business

Educational webcasts and seminars. We offer frequent virtual and in-person presentations on

topics of importance to our clients

Accounting research

McGladrey offers our clients access to online research through CCH’s Accounting Research Manager at

our discounted rate. This web-based tool includes the FASB Accounting Standards Codification and

guidance on many other accounting standards and applications.

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Additional tax services1

Washington National Tax Office

McGladrey professionals based in Washington, D.C., provide insight into ramifications of emerging

legislation and rulings before such changes affect our clients’ businesses. Representing some of the

firm’s top practitioners, our Washington National Tax professionals monitor pending and proposed

legislation and provide our clients with updates on key developments.

Tax compliance and planning

McGladrey employs a standardized tax services methodology that supports compliance and efficiency—

adapting our approach to specific business requirements. Appropriate company personnel are highly

involved in the planning process at the onset of any engagement. As work progresses, we revisit stated

goals with you and keep you informed about any issues that may impact timing. Our goal is to ensure the

project stays fully on course with respect to your needs and service expectations.

Once we have a clear picture of how your business is impacted by tax requirements, we work with you on

planning approaches to support your short- and long-term goals.

Federal tax services

Given the complexity of your business, you may require a coordinated tax approach—one that considers

your markets, locations and strategic objectives. McGladrey brings together federal, international, and

state and local tax specialists to provide perspective on the full array of tax implications and offer a

comprehensive plan.

We can help you seize available planning opportunities and control risk exposure through specialty areas

such as:

Accounting for income taxes (ASC 740)

Accounting methods and periods

Federal credits and incentives

Flow-through entity planning

IRS practice, procedure and controversy

Mergers, acquisitions and restructurings

Tangible asset cost recovery

1 IRS rules governing tax practitioners require that we inform you that this document is a solicitation to

provide federal tax services.

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State and local tax

We can assist your business in determining the states in which you have taxable operations or sales, so

you can be confident you are filing where you should—and aren’t paying taxes where no liability exists.

Our state and local tax (SALT) professionals also help clients:

Identify structuring or nexus opportunities that may reduce expenses or shift income from high-tax to

low-tax jurisdictions

Capture credits and incentives that reduce overall tax exposure

Benchmark their effective SALT rate against the effective rate of peers

Consider nexus issues and restructuring opportunities

Address compliance concerns, including the impact of federal audit adjustments and advance rulings

Implement holistic SALT planning and compliance programs

International tax

For your global needs in areas such as compliance, multinational structuring and advanced tax planning,

McGladrey professionals will work with you to identify specific issues and address them collectively. You

can also count on local resources around the world through our membership in RSM International.

Areas where we can assist you include:

Outbound and inbound structural planning

Global compliance and reporting

Foreign tax credits

Worldwide tax minimization planning

Transfer pricing analysis

Accounting for income taxes (ASC 740)

IFRS/GAAP convergence

Foreign assignment planning

International business advice and planning

Quantitative consulting

www.mcgladrey.com McGladrey LLP is the leading U.S. provider of assurance, tax and consulting services focused on the middle market, with more than 7,000 people in 75 cities nationwide. McGladrey is a licensed CPA firm and serves clients around the world through RSM International, a global network of independent assurance, tax and consulting firms. McGladrey uses its deep understanding of the needs and aspirations of clients to help them succeed. For more information, visit www.mcgladrey.com, like us on Facebook at McGladrey News, follow us on Twitter @McGladrey and/or connect with us on LinkedIn. © 2014 McGladrey LLP. All Rights Reserved.