7 Habitual Mistakes Companies Make – Chapter 7 (2)

TaxConnections Blog Post
Communication to Eliminate Tax Risk –
Introduction –

THIS IS THE last, but not least important, Tax Risk Management Step 7. The previous six chapters flowing from proactive tax risk management, with the tax team, compiling a Tax Risk Management strategy, getting to a point of embracing transparency and outside assistance, to obtaining more facts, and then ensuring internal audits verify the correctness of tax compliance, brings the TRM™ process finally to the common golden thread that binds all these chapters and their processes together—communication!

Lack of communication between the tax manager and the rest of the business, and only processing numbers to compile tax returns, is the reason why tax compliance in most businesses only covers 40% of the total tax risk in those businesses. The other 60% tax risk is hidden and can only be exposed through a systematic process of people-to-people communication, and not just through processing numbers. The one must verify the other. This calls for new communication systems to be implemented in the business to circumvent and put an end to the bad habit of limited people communication.

In accordance with Circular 230 Disclosure

International Tax Attorney, EA, US Tax Court Practitioner in the USA, Counsel of the High Court in South Africa, adjunct Professor of International Tax at Thomas Jefferson School of Law.

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