There is a lot happening behind the scenes in the corporate tax profession. You may think it has been a relatively quiet summer with everyone working remotely but this is simply not the case. What we see unfolding is something like we have never seen before in our lifetime. What we are experiencing is a tectonic shift in the world of corporate tax.  I have experienced a few recessions in my thirty years working with my corporate tax client base in searching for tax executives.  However, this tectonic tax shift is very different than in previous markets. I want to share with you what I am hearing and learning behind the scenes.

There are going to be big changes in the world of corporate tax. In this article, I will discuss what I am seeing that will impact companies the most. What is important now, more than ever, is the relationship corporate CFOs develop with their lead tax executives. Over many years, throughout my career in search for tax executives, I have observed CFOs working closely with their tax executives provide the best long-term value to corporations and their stockholders. CFOs who are removed from working closely with their tax executives will lose big opportunities for tax reduction and savings. Great tax minds live and breathe tax planning strategies; they bring great value to organizations; they reduce risks to organizations; and they increase tax savings to organizations. It is important for CFOs to build a relationship of strong communication and trust with their tax executives.

A retired tax executive recently shared with me all the money corporations are repatriating back into the United States that was sitting in other countries. The U.S.  multinationals are sitting on this cash and the super savvy CFOs are working closely with their tax executive team on tax planning opportunities. If you are a CFO and bringing money back into the country, are you working with your tax team on the best tax planning strategy? Every CFO involved in repatriating offshore money back into the United States should be working closely with their tax executives on these matters before they make these big decisions.

The role of an in-house corporate tax executive versus outsourced tax executive is important to discuss. As I watch CFOs outsource lead corporate tax functions, it is all too common that this causes many problems down the road. The tax executives we speak with tell us of many similar stories in corporate tax organizations who have outsourced tax work to firms who do not understand the company or the business. If you want great results you must have an internal tax executive who understands your business from the inside out. CFOs who are outsourcing their tax functions are only going to get problems rising down the road. Discussions with thousands of tax executives on this very issue over my thirty years in tax executive search has taught me the importance of an inhouse tax function. There are certain tax jobs that can and should be outsourced but you need to leave this decision to your inhouse corporate tax executive. They understand the needs of the tax function more than anyone. Listen to them.

The Tax Cuts And Jobs Act has turned the world of seasoned tax executives upside down. The changes in tax rules and regulations, multiple tax jurisdictions and the interpretations of these new tax law changes has made the tax environment an even bigger challenge for every tax executive. Add the fast-paced technology changes, complicated implementations, lack of available staff, need for increased budgets for more help, and you have a recipe for overwhelming tax executives. The job of a lead tax executive is more demanding than ever in the three decades I have been involved in tax search services. Corporations demand so much more of their corporate tax executives today.

A corporate client commissioned a compensation study on lead tax executives we have been working on for months and it has been interesting to learn firsthand what is really happening behind the scenes from the tax executives themselves. Given the complexity of the tax laws, multiple tax jurisdictions, increased audit risks, expectations of technology implementations, lack of staff to perform lower level roles, managing and training remote workers in multiple time zones, etc. are challenges tax executives face today. Add multiple tax authorities conducting more aggressive audits to make up national, state and local tax revenue shortfalls, and every corporate tax executive is on constant high alert.

Corporations need to compensate tax executives more to ensure they keep this talent. This is not the time to lose a corporate tax executive. In fact, make certain you shore up your lead corporate tax executives with highly trained tax directors and managers supporting them. Believe me, you will wish you had the in-house tax expertise when the auditors start knocking at the corporate door because they will come sooner than you think. Give corporate tax executives a raise, give them a bonus, give them increased support, and do whatever you need to do to keep the talent you now have in your tax organization.  More corporations are competing for highly trained technical tax talent than ever before. You do not want to lose your corporate tax expertise as the cost is much higher than you may think.

It is not easy to find highly qualified tax executives and especially so in this market. I understand the business inside and out and recommend you work with an experienced tax recruiter who has a strong track record in the executive search profession. We are highly experienced in locating corporate tax executives and have a proven track record of tax executive search results with clients.

You should also know that the majority of the top accounting firms cancelled onboarding of new staff earlier this year when the pandemic began. As a result, fewer staff arrived to start in the tax profession making scarcity of tax staff even more of an issue for corporate tax departments searching for them. It is difficult to train tax staff remotely as they are best mentored and monitored closely. Their ability to observe and model a corporate tax executive up closely has been disrupted. Who has been forced to pick up the slack? Corporate tax executives so I want to remind you give them bigger budgets this year, hire more experienced directors and managers to report to them and give them all the support they need. This will go along way to help you with the increased workload in corporate tax departments today. Take the necessary steps to get help to retain, hire and compensate tax executives today.

Have a question on hiring and compensation of corporate tax executives?

Contact Kat Jennings or Call 858.999.0053 X100