Data Analytics Tax Part 1

Business Tax

Individual companies helping a client, generalist

International Tax

There is always some element of this. How does it impact NI? Double Taxation?

Investment mangement

Rich people legally want to minimize taxes paid, money is like the business, helping individuals with their money

Legal

Tax attorney - help companies deal with IRS and audits

Tax mergers and acquisitions

helps lessen taxes, plan out contracts

Multistate tax

Very complex, northeast has high taxes, do we want to operate in certain states?

Private wealth

helping high-net-worth individuals and families manage and minimize their taxes while planning for investments, estates, and long-term financial goals

Transfer pricing

helping multinational companies set and document prices for transactions between their global entities to comply with tax laws and avoid penalties

Tax technology

tax is the best at adopting technology, taking out the job of typing things in

Why does the IRS look through social media feeds and personal financial data?

To profile taxpayers and see your lifestyle

Tax regulators

reconcile financial reporting data and tax data to reconcile book-tax differences

Tax authorities

evaluate credits and deductions and track these trends over time

Who collects data in tax

IRS and SEC

The Company

companies need detailed documentation and data to challenge tax authority bills

Firms file various data elements into a _________ and specific tax _____________

data warehous, data marts

Opportunity zones

If i take advantage of a tax law, what opportunities are out there?

Unrealized capital gains

allows companies and investors to tap into tax savings related to a certain amount of money

Tax Compliance Evaluation

Since there are so many filings tax regulators use data analytics to evaluate tax compliance based on expected tax rates, income, or sales

What do you need to tell you when the filings occur?

A dashboard

Avoiding a tax audit

Firms engage in data analytics to “see what the regulator is seeing”

• there’s a chance we’re going to get stuck with a tax bill on top of fees and penalties

• make sure you lower things that could flag an audit

Sales tax dashboard

Helps navigate complex tax calculations such as sales tax liability

• Helps with compliance

Tax cost

actual taxes paid

Tax Cost KPIs

• effective tax rate

• cash taxes paid

• effect of loss carry-forwards

• expiration of tax credits

• tax adjustments in response to new tax legislation

• deferred taxes

Tax risk

risk of misreporting or tax provision adjustments

Tax risk KPIs

• frequency and magnitude of tax audit adjustments

• frequency of concerns pertaining to the organization’s tax position

• levels of late filing or error penalties and fines

• number of resubmitted tax returns due to errors

Tax efficiency and effectiveness

How well is our tax group working?

technology, processes and people in carrying out the tax process

Tax efficiency and effectiveness KPIs

• levels of technology/tax training

• amount of time spent on compliance versus strategic activities

• level of job satisfaction of the tax personnel

• employee turnover of the tax personnel

• improved operational efficiency

Tax sustainability

Are we being consistent?

ability to sustain similar tax performance overtime

Tax sustainability KPIs

• number of audits closed and significance of assessment over time

• the effective tax rate over time

Permanent differences between book and tax revenue and expenses

things you’re never going to pay taxes on

Permanent differences between book and tax revenue and expenses KPIs

• penalties and fines (excluded from taxable income)

• meals and entertainment (100% books 50% tax)

• Interest on municipal bonds (non tax income)

• life insurance (non tax income)

• dividends received deduction (tax based on % of ownership)