Every time I read a report about the challenges facing corporate tax executives, I think about the private conversations shared with them over three decades. For those who have little interaction or understanding of corporate tax leaders and their responsibilities, it is important to learn what keeps them awake at night!
As I grew up in retained search to find hundreds of leaders of corporate tax organizations over the years; hired to search for the first tax executive in China representing a US multinational; hired to find the first Tax Partners of U.S. tax practices alongside of their European counterparts;with a list of clients including https://www.taxconnections.com/search_services/clients, the lessons and insights were valuable. I learned what keeps lead tax executives awake at night!
What I hear time and time again from tax executives as to what keeps them awake at night, they tell me it is the “the complexities and the unknown of the worldwide tax rules and regulations”. How is it be possible for anyone to keep up with it all the tax rules? How is it be possible not to make a mistake? What is the exposure? How do you minimize mistakes? What are the auditors asking for now? How do they find the information and document request from the revenue authorities in multiple countries? What if the last person responsible for this area of tax did not leave a well-documented audit trail? How did they happen to encounter the worst and most aggressive auditor? All of these questions come into the mind of a tax executive and keep them awake at night!
Corporate tax matters are complicated, risks are inevitable. Smart and seasoned tax executives know this so they assess where best to focus their time. Where is the most loss of tax revenue? Transfer pricing, international, state and local and sales and use taxes are hot areas full of complexities so the auditors are spending time in these areas digging for low hanging fruit. You can bet the corporate tax executives are awake at night thinking about these matters. If they make a mistake, they could lose their job.
Every time a new CFO or soon to be retiring VP Tax calls and retains me on a search, the first thing I want to know is the reporting relationship of the tax executive to management. For instance, do they have the VP Tax reporting to the CFO or to a Controller? Unless you have my experience and knowledge of private conversations with thousands of tax executives, you may never hear this conversation. The lead tax executives “do not want to report to anyone other than the CFO”. If there is one bit of advice I would give every CFO it would be have the lead tax executive report directly to them. Anything other than that kind of reporting relationship and you are setting yourself and your company up for trouble at some point, no exceptions!
Corporate tax executives have a very tough job! What I would also tell you is that they are intelligent, highly educated, work very hard and are constantly under filing deadlines and fire drills for auditors requests. They are extraordinary performers and very valuable to every organization. They are genuinely making a difference to the bottom line of corporations today. Investors should be happy to attract these brilliant minds to their organizations. After all, Federal and State tax authorities are working hard to find revenue for the government; while tax executives are working extra hard to ensure the company keeps its hard earned revenue.
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