Enterprises have plenty of tools to manage and optimize telecom spending: they negotiate rates, audit usage, and scrutinize every line-item on the invoice. But you know what they tend to gloss over? Taxes – a $100M+ problem hiding in plain sight.
Erroneous telecom tax charges often go undetected for years, even at organizations with mature IT expense management, accounts payable, and tax controls – which is exactly why services like Tangoe Tax Audit exist.
There’s a good chance your company is sitting on tax overpayments no one knows about. Overlook it, and it stays that way. Tap the right experts, and you could have a check in hand within weeks. Here’s a closer look at the issue and how Tangoe Tax Audit can help.
Why Are Telecom Taxes So Complicated?
A lot of it has to do with government-imposed tax complexity. Federal, state, and local tax rules each set their own rates, classifications, and exemptions for telecom services, and they rarely line up.
- A service might be tax-exempt at the state level but still get hit with a local utility tax. Or classified as “telecommunications” in one jurisdiction and “data service” in another.
- Carriers must correctly apply tax rules across thousands of taxing authorities in the U.S. Errors are bound to happen – and whey they do, it’s you who pays the price.
- A company operating nationwide faces not one tax rulebook, but dozens – each different, and each subject to change.
Add to this constant regulatory change – from jurisdictions changing exemption rules to states redefining what counts as a taxable telecom service to municipalities updating their local tax rate.
Why It Goes Unnoticed
Standard telecom audits look at usage, rates, and contracts. They don’t look at whether the taxes on top of those charges are correct. That isn’t something teams typically handle internally. IT is busy keeping systems running and troubleshooting issues. Finance is running numbers and balancing budgets. Procurement is negotiating contracts and managing carrier relationships. Multi-jurisdiction tax code isn’t something teams have time to master during their 9-5.
And so, the costs pile up. The only way to recover them is by working with someone who has specialized knowledge of governmental tax code complexity.
Recovering Telecom Tax Dollars Without Disrupting Your Business
The important clarification to call out here is that Tangoe Tax Audit runs behind the scenes with no disruption to your business. That’s a lot different than most other sourcing and optimization projects where customers are asked to switch carriers, consolidate services, or restructure how they buy telecom. Those changes deliver return, but they create friction – so much so that some execs would rather keep eating the cost.
Tangoe Tax Audit doesn’t ask for any of that. The service doesn’t touch contracts, circuits, or services, and it doesn’t change any carrier relationships.
We focus on four things:
- Finding where taxes or fees are applied incorrectly
- Correcting them
- Recovering what was overpaid
- Stopping the same errors from happening again
Here’s how it works:
- Complimentary assessment. A no-cost, 1–2-week review of your telecom tax footprint (3-5 of your largest invoices) to see whether a credible recovery opportunity exists. No opportunity, no cost.
- In-depth analysis. A line-by-line review of every tax and fee across your telecom footprint, validated by service type and jurisdiction.
- Quantified opportunity. A clear summary of prospective savings and credit projections, presented for your team’s review and approval before anything moves forward.
- Dispute and recovery. Our experts compile, submit, and manage disputes directly with taxing authorities on your behalf, all the way through to credit or refund.
The engagement runs on a pure contingency model – no savings, no fee.
$1.4M in Savings for a Fortune 100 Company
Within 30 days of gaining access to this enterprise’s billing data, we were able to flag $1.4 million in savings. From there, it took roughly 90 days to move from initial engagement to credits landing on the client’s invoice. Full credit recovery was completed within a single billing cycle – the fastest billing correction the customer had seen in over 30 years of telecom management.
Over the past three years, this same approach delivered results across nine other client engagements totaling more than $13M in savings. It’s all part of the comprehensive support available through Tangoe’s Advisory Services, which deliver $250M in annual customer savings.
Stats for call-out or sidebar:
- $100M+ in telecom tax reductions delivered
- 100% client success rate across engagements
- 5-15% average return on audited telecom tax spend
- Results typically realized within 90 days – if not sooner
Found Money: Telecom Taxes Deserve a Closer Look
Telecom tax is an area of enterprise IT spending where substantial money is just within reach. It doesn’t require a system overhaul, a carrier switch, or a change to how you operate day-to-day. It requires someone with deep expertise to look at the invoice the right way.
It’s worth asking: has anyone checked whether the taxes on your telecom bills are correct?
We can help. Learn more about Tangoe Tax Audit by requesting your Consultation with Tangoe Advisory Services.