Case Study: Top-Ranked Contractor Company achieves $4 Million Tax Savings with Marcum LLP

Top-ranked Contractor Saves $4 Million through Change of Accounting Method

Top-Ranked Contractor Company, one of the largest and most highly regarded contractors in its region, was reporting construction revenue for tax purposes the same way it did for financial statements. The company discovered that its accounting method for long-term contracts may not have been maximizing tax benefits, and it was missing an opportunity to better allocate costs and preserve working capital. Marcum LLP’s construction tax team stepped in to identify a more advantageous tax accounting approach.

Marcum LLP reviewed the company’s financial data and contracts, developed a methodology to allocate general and administrative costs to construction jobs, and prepared the required Form 3115 request for IRS approval to change accounting methods. The IRS approved the change, and the client received a $4 million deduction and profit deferral on open jobs in the first year, delivering significant tax savings and improved cash flow.