The Oil and Gas Industry is entitled to immediately deductthe cost of drilling from federal income taxes. Our client had a customapplication to track their federal taxes owed by tracking their drilling costdeductions against profits. The application had inaccurate logic, was not welldocumented, and was not performing well. The client was unable to completetheir end-of-year federal tax return, also preventing them from issuing theirannual shareholder report. Inaccurate tax calculations present many risksincluding possible IRS audits and/or penalties.
Our team worked with the tax group to document the businessrules for accurate tax calculations. We audited all existed source code toidentify flawed logic. We corrected the stored procedures and documented theapplication. We performed a complete regression test to ensure all issues wereresolved 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 ofthe tax application, we have reduced the risk for our client in futureapplication maintenance activities.