Based in Abbotsford, Wisconsin, Abbyland Foods originally opened in 1977 as a custom beef processing plant and retail store. Today, the privately owned manufacturer has more than 1,000 employees working in eight company divisions, including Abbyland Pork Pack, a slaughter and boning operation that supplies the meat industry with pre-rigor pork.

Situation

The manufacturer’s Abbyland Pork Pack division was selected by the state for a sales and use tax audit. The state auditor reviewed the company’s records and issued a preliminary adjustment schedule. In the wake, Abbyland Pork Pack faced a potential $100,000 liability of taxes, interest, and penalties. The company promptly contacted Wipfli for expertise and assistance.

Strategy

Wipfli scrutinized the auditor’s adjustment schedule, checking its accuracy, examining assessments, and identifying exemptions and exceptions. In addition, the auditor had already identified several vendor overpayments for Abbyland Pork Pack, and Wipfli suspected that more were likely.

The firm then briefly worked with Abbyland’s leaders on site to verify its position by gathering additional information in support of its arguments to the auditor. Wipfli determined significant refunds were owed to the company and reviewed them with the manufacturer before preparing formal refund claims to the state. Wipfli pursued refunds and provided information to reduce the assessment.

Benefits

Negotiating an audit outcome can be a sensitive and time-consuming process. With Wipfli’s expertise, Abbyland Pork Pack was able to confidently maintain its business focus and responsibilities without the distraction a state audit brings.

As a result of the engagement, the manufacturer realized a surprising and significant outcome. What began as a $100,000 liability ended in a nearly $37,000 refund, representing a $137,000 swing.

The refund was a welcome benefit, but even more beneficial was the greater tax understanding Abbyland Pork Pack developed as a result of Wipfli’s assistance. The manufacturer is now aware of its exemptions, thereby saving additional tax payments annually. It is also aware of its exposures and is able to make corrections internally to avoid future assessments.