Remediation playbook

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Overview

This playbook provides detailed, step-by-step procedures for remediating each incident scenario. Follow these procedures to ensure consistent, effective incident resolution.

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General response workflow

All incidents follow this standard workflow:

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1. Initial detection and triage

Actions:

• Document how issue was discovered (customer-reported, internal monitoring, filing review)
• Identify affected time window
• Determine if issue is ongoing or resolved
• Assess immediate containment needs

Outputs:

• Incident ticket created
• Initial scope assessment
• Containment actions taken (if needed)

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2. Impact assessment

Actions:

• Identify affected customers
• Calculate financial exposure
• Determine compliance lifecycle impact (pre-invoice, post-invoice, post-filing)
• Assess blast radius (single customer, multiple customers, platform-wide)
• Evaluate direction of error (under-collection, over-collection, mis-sourcing)

Outputs:

• Affected customer list
• Financial exposure by customer and jurisdiction
• Compliance impact assessment
• Scenario classification

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3. Root cause analysis

Actions:

• Identify technical root cause
• Determine contributing factors
• Document timeline of issue
• Verify issue is resolved or implement fix

Outputs:

• Root cause documentation
• Fix verification
• Prevention recommendations

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4. Remediation execution

Actions:

• Follow scenario-specific remediation steps (see below)
• Prepare customer communications
• Coordinate with affected teams (engineering, support, compliance)
• Execute technical corrections (amended returns, refunds, etc.)

Outputs:

• Remediation actions completed
• Customer notifications sent
• Technical corrections filed

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5. Documentation and follow-up

Actions:

• Document full incident timeline
• Record lessons learned
• Update monitoring/alerting if needed
• Schedule follow-up with affected customers
• Track resolution to completion

Outputs:

• Incident post-mortem
• Process improvements identified
• Customer satisfaction confirmed

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Scenario-specific procedures

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Scenario 1: Low-dollar, low-visibility issues

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Step 1: Quantify and document

Actions:

1. Calculate total exposure across all affected transactions
2. Identify number of customers and transactions affected
3. Calculate average exposure per customer
4. Document affected jurisdictions
5. Verify issue is resolved going forward

Documentation required:

• Transaction-level detail (customer, date, amount, jurisdiction)
• Root cause analysis
• Fix verification
• Time window affected

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Step 2: Prepare customer notification

Actions:

1. Draft notification email explaining:
   • What happened
   • Time window affected
   • Total exposure for their account
   • Why customer tax recovery is not recommended
   • How issue is resolved
   • What to do if audited
2. Include supporting documentation
3. Get approval from manager

Template: See “Low-dollar issue notification” in communication templates

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Step 3: Notify customer

Actions:

1. Send notification via email
2. Offer to schedule call if customer has questions
3. Provide documentation for their records
4. Confirm receipt and understanding

Follow-up:

• Respond to questions within 24 hours
• Escalate if customer demands remediation
• Document customer response

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Step 4: Document for audit support

Actions:

1. Prepare audit defense package:
   • Detailed calculations
   • Timeline of issue and resolution
   • Supporting evidence
   • Jurisdiction-specific considerations
2. Store in customer’s account for future reference

Retention: Keep for statute of limitations period (typically 3-4 years)

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Scenario 2: Under-collection

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Step 1: Assess scope and timing

Actions:

1. Identify all affected transactions
2. Calculate under-collected tax by customer and jurisdiction
3. Determine if any returns have been filed
4. Assess whether registrations are in place
5. Evaluate customer’s ability to re-bill

Key questions:

• How recent is the issue? (within current period vs. multiple periods)
• Have returns been filed? (pre-filing vs. post-filing)
• Are registrations in place? (registered vs. in-process)
• What is customer’s contract with their buyers? (can they re-bill?)

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Step 2: Prepare customer notification and templates

Actions:

1. Draft notification email to customer explaining:
   • What happened and why
   • Financial impact to their account
   • Tax reimbursement principles
   • Recommended next steps
   • Support we’ll provide
2. Prepare customer tax recovery template for them to send to their buyers
3. Prepare transaction detail spreadsheet
4. Get approval from manager (if exposure > $5,000, get executive approval)

Templates: See “Under-collection notification” and “Customer tax recovery letter” in communication templates

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Step 3: Notify customer and provide support

Actions:

1. Send notification email with:
   • Explanation of issue
   • Transaction detail spreadsheet
   • Customer tax recovery template
   • Offer to review their outreach before sending
2. Schedule call to walk through details (if exposure > $5,000)
3. Offer to participate in customer conversations (if exposure > $10,000)

Talking points:

• Tax reimbursement is contractual between buyer and seller
• This is a timely issue (emphasize recency)
• We’ll support them throughout the process
• We can provide documentation for their customers

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Step 4: Support customer tax recovery

Actions:

1. Review customer’s draft communication before they send
2. Provide jurisdiction-specific guidance
3. Prepare affidavit templates (XYZ letter style)
4. Track recovery progress
5. Assist with any buyer questions (if authorized)

For high-value accounts (exposure > $25,000):

• Consider offering discounted/no-charge customer tax recovery service
• Direct outreach to top customers representing 80% of liability
• Executive involvement in key customer conversations

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Step 5: Handle filing implications

Actions: If returns not yet filed:

1. Ensure correct amounts are reported on upcoming returns
2. Document under-collection and recovery efforts
3. Report actual collected amounts (not amounts that should have been collected)

If returns already filed:

1. Assess whether amended returns are needed
2. If customer successfully recovers tax, file amended returns to report additional tax
3. If customer cannot recover tax, document efforts and maintain records for audit

Documentation:

• Recovery efforts and results
• Customer communications
• Affidavits received
• Amended return support

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Step 6: Escalation procedures

If customer refuses to pursue recovery:

1. Reiterate tax reimbursement principles
2. Emphasize their contractual rights
3. Explain audit risk if not addressed
4. Escalate to executive team
5. Review service agreement limitations
6. Consider fee credits (at discretion)

If customer demands Commenda pay the tax:

1. Refer to service agreement limitations
2. Explain we don’t pay tax, only support recovery
3. Offer fee credits up to service fees paid
4. Escalate to executive team
5. Involve legal if necessary

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Scenario 3: Over-collection

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Step 1: Assess scope and refund obligations

Actions:

1. Identify all affected transactions
2. Calculate over-collected tax by customer and jurisdiction
3. Determine if tax was remitted to jurisdictions
4. Assess customer’s refund obligations to their buyers
5. Evaluate materiality per buyer

Key questions:

• Has tax been remitted? (affects refund process)
• How much per buyer? (affects refund method)
• Are buyers complaining? (affects urgency)
• What is customer’s refund policy?

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Step 2: Prepare customer notification and refund guidance

Actions:

1. Draft notification email explaining:
   • What happened and why
   • Financial impact
   • Customer’s obligations to refund buyers
   • Refund process options
   • Support we’ll provide
2. Prepare transaction detail spreadsheet
3. Prepare refund process guidance
4. Get approval from manager

Templates: See “Over-collection notification” in communication templates

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Step 3: Notify customer and coordinate refund approach

Actions:

1. Send notification email with:
   • Explanation of issue
   • Transaction detail spreadsheet
   • Refund process guidance
   • Offer to assist with refund logistics
2. Schedule call to discuss refund approach
3. Determine refund method:
   • Credits on future invoices
   • Direct refunds
   • Combination approach

Refund method considerations:

• Credits: Easier administratively, but only works for repeat customers
• Direct refunds: Required for one-time customers or large amounts
• Materiality: Small amounts (< $25) may warrant credits; larger amounts warrant refunds

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Step 4: Support refund execution

Actions:

1. Help customer identify affected buyers
2. Provide refund notification templates
3. Assist with refund calculations
4. Track refund progress
5. Document refunds issued

For key accounts:

• Offer hands-on support with refund logistics
• Help generate refund letters
• Provide buyer-specific calculations

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Step 5: Handle filing implications

Actions: If tax not yet remitted:

1. Simply adjust reporting to reflect correct amounts
2. No amendments needed
3. Refund customers from over-collected amounts

If tax already remitted:

1. File amended returns with claims for refund in affected jurisdictions
2. Provide supporting documentation:
   • Original return
   • Corrected calculations
   • Refund documentation
3. Track refund status by jurisdiction
4. Coordinate timing: refund customers after receiving refund from jurisdiction (or before, depending on cash flow)

Amended return process:

• Prepare amended return schedules
• Document reason for amendment
• Include supporting calculations
• Track refund claims (can take 3-6 months)
• Follow up on delayed refunds

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Step 6: Monitor and close

Actions:

1. Track refund completion (both to customers and from jurisdictions)
2. Confirm customer satisfaction
3. Document lessons learned
4. Update monitoring to prevent recurrence

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Scenario 4: Wrong jurisdiction

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Step 1: Reconstruct correct sourcing

Actions:

1. Identify all affected transactions
2. Determine correct jurisdiction for each transaction
3. Calculate amounts by:
   • Jurisdiction that incorrectly received tax
   • Jurisdiction that should have received tax
4. Verify address data and sourcing logic
5. Document root cause

Analysis required:

• Transaction-level detail with addresses
• Original jurisdiction assigned
• Correct jurisdiction
• Tax amount by jurisdiction
• Net over/under by jurisdiction

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Step 2: Prepare amendment strategy

Actions:

1. Determine amendment approach by jurisdiction:
   • Some jurisdictions allow cross-jurisdiction adjustments
   • Others require separate refund and payment processes
2. Prepare amendment schedules for both jurisdictions
3. Calculate net impact to customer (usually zero if tax amount was correct)
4. Get approval from manager

Documentation:

• Original returns filed
• Corrected sourcing analysis
• Amendment schedules
• Supporting workpapers

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Step 3: Notify customer

Actions:

1. Draft notification email explaining:
   • What happened (sourcing error)
   • Why net impact is minimal (tax amount was correct)
   • Amendment process required
   • Timeline expectations
   • Support we’ll provide
2. Send notification with supporting documentation
3. Schedule call to walk through amendments

Templates: See “Wrong jurisdiction notification” in communication templates Key message: “The good news is the tax amount was correct, we just need to move it from Jurisdiction A to Jurisdiction B.”

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Step 4: File amendments

Actions: In jurisdiction that incorrectly received tax:

1. File amended return showing reduction
2. Request refund or credit
3. Provide supporting documentation
4. Track refund/credit status

In jurisdiction that should have received tax:

1. File amended return showing increase
2. Pay additional tax due (plus interest if applicable)
3. Provide supporting documentation
4. Confirm payment processed

Coordination:

• Some jurisdictions allow offset (pay net difference)
• Others require separate processes
• Document all communications with both jurisdictions

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Step 5: Monitor resolution

Actions:

1. Track refund from incorrect jurisdiction
2. Confirm payment to correct jurisdiction
3. Reconcile net impact to customer
4. Document resolution
5. Update address hierarchy/sourcing logic to prevent recurrence

Timeline expectations:

• Refunds can take 3-6 months
• Some jurisdictions are faster than others
• Keep customer updated on status

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Scenario 5: Tardy exemption certificate

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Step 1: Clarify sequence and validity

Actions:

1. Determine timeline:
   • When was transaction processed?
   • When was exemption certificate received?
   • When was it applied in system?
2. Verify exemption certificate validity:
   • Covers transaction date?
   • Correct jurisdiction?
   • Properly completed?
3. Determine billing and reporting status:
   • Was tax billed to buyer?
   • Was tax collected from buyer?
   • Was tax reported to jurisdiction?

Key questions:

• Is certificate valid for the transaction date?
• Was tax actually collected or just reported?
• Which returns are affected?

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Step 2: Determine correction approach

Actions: Scenario A: Tax reported but not collected

1. File amended returns to remove exempt tax
2. No customer refund needed
3. Track refund/credit from jurisdiction

Scenario B: Tax reported and collected

1. File amended returns to remove exempt tax
2. Refund customer for tax collected
3. Track refund/credit from jurisdiction
4. Coordinate timing of customer refund

Scenario C: Tax not yet reported

1. Simply report correctly on upcoming return
2. Refund customer if tax was collected
3. No amendments needed

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Step 3: Notify customer

Actions:

1. Draft notification email explaining:
   • Exemption certificate received
   • Correction process required
   • Timeline expectations
   • Any refund due to their buyer
2. Send notification with:
   • Copy of exemption certificate
   • Transaction detail
   • Amendment schedule (if applicable)
3. Coordinate refund to buyer (if applicable)

Templates: See “Tardy exemption notification” in communication templates

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Step 4: File amendments and process refunds

Actions:

1. File amended returns in affected jurisdictions
2. Provide copy of exemption certificate as support
3. Track refund/credit from jurisdictions
4. Coordinate customer refund to buyer (if applicable)
5. Update exemption status in system

Documentation:

• Exemption certificate
• Original return
• Amended return
• Refund documentation

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Step 5: Process improvement

Actions:

1. Review exemption certificate intake process
2. Identify delays in processing
3. Implement improvements:
   • Automated exemption validation
   • Faster upload process
   • Better integration syncing
   • SLAs for exemption processing
4. Document lessons learned

If Commenda processing delays contributed:

• Consider fee credits
• Prioritize future exemption processing for this customer
• Implement monitoring to prevent recurrence

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Escalation procedures

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When to escalate to manager

• Exposure > $5,000
• Customer is upset or threatening
• Multiple customers affected
• Unclear how to proceed
• Customer demands Commenda pay tax

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When to escalate to executive team

• Exposure > $10,000
• Multiple customers affected
• Filed returns impacted
• Customer threatens legal action
• Media or regulatory attention
• Platform-wide issue

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When to activate SWAT team

• Exposure > $100,000
• Platform-wide impact
• Real-time reporting jurisdictions affected
• Cascading downstream effects
• Regulatory inquiry received
• Reputational risk

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Service gestures and fee credits

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Account manager discretion (up to $500)

• Single customer impact
• Exposure < $5,000
• Clear Commenda fault
• Customer relationship at risk

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Manager approval required ($500-$2,500)

• Multiple customers affected
• Exposure $5,000-$10,000
• Significant customer impact
• Retention risk

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Executive approval required (> $2,500)

• Large exposure
• Multiple customers
• Significant business impact
• Strategic account

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Customer tax recovery services

Standard offering (paid service):

• Hourly rate for customer tax recovery
• Typically used during VDA process
• Helps minimize VDA liability

Discounted/free offering (incident response):

• For key accounts with large under-collection exposure
• Focus on top customers representing 80% of liability
• Executive involvement
• Helps maintain customer relationship

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Documentation requirements

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All incidents require

• Incident ticket with full timeline
• Root cause analysis
• Affected customer list
• Financial exposure calculation
• Customer communications
• Resolution documentation

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Additional documentation for material incidents (> $10,000)

• Executive briefing
• Detailed remediation plan
• Customer-by-customer status tracking
• Amended return support
• Post-mortem analysis
• Process improvement recommendations

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Retention requirements

• Keep all incident documentation for statute of limitations period (typically 3-4 years)
• Store in customer account for easy retrieval
• Include in audit defense package if needed