What the new world of tax looks like

It’s complex and evolving at ever-increasing speeds.

Video transcript:

I think that there is both a perspective shift and a retooling of how task preparers and tax auditors and other CPA professionals need to view the space of tax operations. Ultimately, the roles themselves have evolved, and there has been a natural evolution so that beyond just the plugging or computation of numbers there is an underlying operational process that professionals have been following. Their awareness or understanding of how the components of that framework and operations management come together could be broad or it could be very narrow. When advisers work with companies and individuals in the tax space to talk about these areas, we find that there is still an operational immaturity that exists within the profession, and more education and understanding is needed. I think it really constitutes a paradigm shift that needs to occur so that there is an understanding of the broader change that’s really transpired and the global implications of that. There are much higher degrees of implications for businesses and CPAs that advise and work in those business than ever before when it comes down to tax, and the only sufficient answer for them to achieve the right result is to incorporate strong operational management in an operational framework and model that will help them achieve the right answer.

In the United States alone, there are over 50 jurisdictions just from a state standpoint. You also have local, you have cities, you have other types of tax and regulatory implications as you go even just within the U.S. The magnitude of data, the magnitude of risk, and the ever-increasing capabilities of the taxing jurisdictions to monitor and track and require and desire information from businesses and CPAs that all of the people that support these areas has just exponentially increased. And so while global becomes a giant element for the larger businesses, the thing about tax operations management is that it is completely scalable. It is important to the biggest-of-the-big company and the smallest sole practitioner who touches tax in any respect on behalf of a client. In effect, it’s also important to that sole practitioner as somebody who prepares and is a tax preparer of their own information.

We can take that and say that even in doing my own tax return, I need data and information. That data and information is no longer in the same place that I used to get it before. It is now gone beyond that and it is in different places. I need to use technology to get it. I need to be more effective and efficient because I don’t want to spend three months doing my taxes. I mean, you can take it from that single personal perspective all the way to the largest companies in the world, and the concept of what you need in order to produce the right result in a timely manner, in an effective way with reduced risk, and frankly, impacting our bottom line because we all want to be responsible corporate citizens, responsible individuals, yet only pay the amount of tax that was required of us to pay. All of those things come together and say that tax operations management, tax information, tax technology are critical success factors in today’s environment regardless of what area of practice you are in.

Another example where we see CPAs working in the area of tax operations and technology is in the vendor side. So from a software development standpoint, the technology that’s being built and developed to support tax requires input from business professionals, people with the acumen and the understanding of how the processes really work to create the tax result. And those individuals are oftentimes CPAs who are working in those fields and helping technology companies to actually produce the software that’s required or needed to be used by businesses, and it’s not just in a one-time role. These roles are ever evolving because the technology road map and overall innovation path is getting shorter and shorter between conceptual and when they need to go market to really satisfy the requirements and the demands of the global taxing authorities. 

The AICPA Tax Information and Operations Management (TIOM) Task Force strives to educate and bring needed focus to the areas of tax operations, including information management, process optimization, and the technologies and strategies that support all tax professionals.

The members of this task force are senior-level tax professionals from diverse backgrounds (public practice, consulting, and business and industry) who have built their careers by fostering innovation—constantly working to enhance the future of tax-related processes and technology in an age where business interests are increasingly taking on global dimensions.

We write articles, speak at high-profile conferences, host webcasts, and publish other guidance to help businesses and firms—of all sizes—improve tax-related information management and processes and, as a result, maximize their bottom line. We promote the CPA name and the esteemed CITP and CGMA credentials, and ensure CPA tax professionals remain the premier provider of tax services.

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