AT&T v. United States of America

In a matter involving corporate taxation in the telecommunications industry, the U.S. Department of Justice retained Analysis Group to examine the economic characteristics of Universal Service Fund (USF) payments received by AT&T. At issue was how such payments should be categorized for tax purposes.

Supported by Managing Principal Gaurav Jetley and Principal David Sosa, Co-Founder Bruce Stangle prepared an expert report and delivered deposition testimony in which he opined that USF payments to AT&T were subsidies rather than contributions to capital, and therefore should be treated either as revenues or offsets to costs. Dr. Stangle also rebutted AT&T's economics expert on the issue of how to treat the USF payments. The U.S. District Court for the Western District of Texas recently entered summary judgment for the United States. The 1996 Federal Communications Act created the USF to support programs designed to ensure nationwide access to quality telecommunications services. Telecommunications providers make mandatory contributions to the fund through revenue assessments.

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