The Oil and Gas Industry is entitled to immediately deduct the cost of drilling from federal income taxes. Our client had a custom application to track their federal taxes owed by tracking their drilling cost deductions against profits. The application had inaccurate logic, was not well documented, and was not performing well. The client was unable to complete their end-of-year federal tax return, also preventing them from issuing their annual shareholder report. Inaccurate tax calculations present many risks including possible IRS audits and/or penalties.
Our team worked with the tax group to document the business rules for accurate tax calculations. We audited all existed source code to identify flawed logic. We corrected the stored procedures and documented the application. We performed a complete regression test to ensure all issues were resolved and no new issues introduced.
Our client was able to determine their federal taxes owed, finalize their federal tax return, and release their annual shareholder report. By providing complete documentation and a comprehensive regression test plan of the tax application, we have reduced the risk for our client in future application maintenance activities.