It’s that time of year again!  With crunch time affecting most medium and large corporate tax departments around the country and September 15th rapidly approaching, I recalled an experience from the early days of my foray into tax technology.

Twelve years ago, I was a relatively new staff member in the tax technology group of an Andersen office.  My job in the local office was to support the tax (and sometimes, audit) professionals from a technology perspective. I’d help them be more efficient when using software or homegrown solutions.   Late one afternoon, as dreams of getting home at a reasonable hour drifted through my head, my manager called me into his office. He needed me to head out to a client to support the audit staff that was onsite.

Being young and inexperienced, I really had no idea what to expect when I arrived.  To my surprise, I was escorted into a room in the basement where papers lined the sides of the room—floor to ceiling—and covered every empty space imaginable.  Young professionals like me were scattered all over the room, pounding on keyboards and frantically running around the room to collect reports off the printers.  Stress permeated the room.

A month or so ago at the IPT conference in Phoenix, I had the pleasure of meeting Mindy McLees, a senior property tax manager in the LA office of Moss Adams LLP.   During our lunchtime conversation, I learned that Mindy’s background was primarily in dealing with property tax matters, while I shared that my background was primarily around fixed asset management.  Mindy mentioned a paper she co-wrote some time back regarding using fixed asset software to simplify property tax compliance. Curious as to whether the article was still relevant, she offered to share it with me.  With a mixture of property tax consultants, practitioners and software vendors participating in our conversation at the table, there was some disagreement as to the effectiveness of this proposition.

This blog is the second in the series "Fixed Assets Systems: Square Peg, Round Hole". To learn more, read the first blog, which touched on fixed asset systems' necessary qualities.

ERP systems have been built by and for accounting professionals.  They do not keep tax experts on staff nor do they develop tax technical capabilities; it is just not their mainstay.  When dealing with any type of system, even systems that tell companies they can handle all depreciation requirements for tax, be leery.  In our experience, those promises usually aren't the reality.

I’m currently looking to fill a few positions here at Red Moon Solutions, as well one of my volunteer organizations. Throughout this process, I am consistently reminded of all the positions for which I have hired before.  It seems that it did not matter whether I was adding to a staff of 8,000+ or to a staff of eight, it was just as important to “fill it right”.  Similarly, whether I was seeking a person to fill a C-level position or a staff level position, it was critical to find someone who best exhibited the skills needed, but also one who carried with them a toolbox of special traits. As I go through this process, I must always remind myself of these traits, knowing they will only add to the success of the organization. I’m sharing my traits with you; use them in your hiring process, or create your own list: 

Where were you when you first learned of the "horrendous havoc" Y2K would bestow upon your company?  Do you remember learning about the 'web'—and how your company needed to "get on" it?  Today’s versions are just as unique: "software as a service (SaaS)" and "cloud computing". How much thought have you given to the ways it will change your business and business practices?  It’s intriguing—and is one of the most (positive) technology changes in a while.  We are poised at yet another major intersection of changing the ways that we do business. I see SaaS making three major differences in your practices—no matter what business you’re in.

Recently, I participated in a Deloitte hosted Dbriefs webcast. It focused on reviewing common tax issues involving fixed assets systems, as well as important considerations when replacing or upgrading current systems.  I also had the opportunity to read one of their latest white papers: “Fixed Assets Systems—Why the tax function needs to have a stake in the game”. In both pieces, Deloitte did a solid job of defining some of the key issues they see within major corporations:

A president of a local company recently stated to several other key business leaders, "Our employees are just happy to have a job."  What I wanted to ask is this: How 'happy' will they be to stay as the economy turns around and job opportunities open up elsewhere?

It will be interesting to see how many businesses make it through the toughest economic storm in decades…only to sink because their key talent bails ship.  You may not even know how many of your key players are looking because they are not getting what they want—I’m not talking about cash.  We all know that the main reasons people leave are due to those they work for (or with), as well as the opportunities they are (or are not) presented. These are the elements of a sustainable culture.

"Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did do. So throw off the bowlines, sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.” – Mark Twain

While my last several blogs were pretty heavy tax technical content, and no doubt a bit dry.  I decided to lighten things up a bit. 

Are you like me? A person who (since the beginning of time, it feels like) has travelled for business, visiting amazing cities only to get in late, order room service and never set foot in the city? Do your friends and family look dreamy when you tell them you are going to Chicago, New York or San Diego…and think you have an exciting, jet-setting life? While filling out your “Reason for Travel - Business or Pleasure” on the hotel reservation website, are you secretly wishing you could check the box for “Pleasure”, instead of “Business”?  Personally, I think they need to add a new checkbox to that online form.  It should say “Both”. 

I decided that life is too short to continue to travel for business and never take a few minutes to do something to enjoy the destination. It could be a hike in Estes Park in Colorado, Central Park in NYC, or perusing the National History Museum in DC.  I’m making sure to stop and smell the roses. It’s my goal to experience the wealth of knowledge and amazing opportunities that the road can actually bring to those who take the time to experience it. 

The Top 10 Reasons Not to Change

How often does the phrase “But we’ve never done it that way” come from you? A lot has been written about change, and some say that it is the only constant. So why do so many of us resist it?

Our reason for resistance is quite simple - we 'lose'.  To change requires us to give something up. That could be the process we have been doing (and complaining about) for five years or the office we have had since before our kids started kindergarten. In other words, we 'lose' something.  Without being too “touchy feely”, after a loss we need to grieve—it’s a lot of emotional energy. No one wants to feel the pain (or the frustration) of that loss. I’ve heard a number of other reasons people choose to resist change—do any sound familiar to you?

This blog is the second in a two-part series regarding Corporate Legal Entity Simplification, inspired by Red Moon Solutions Managing Director Kelley Lear’s participation in the Chicago Tax Club (CTC) meetings in June.

In today’s regulatory environment, we cannot talk about structural changes and advantages in simplification without talking about code sections in place to watch out for certain strategies and behaviors deemed to be put in place due specifically for income tax savings…For example, Sec. 7701(o) adopts a conjunctive test in which “the transaction changes in a meaningful way (apart from federal income tax effects) the taxpayer’s economic position,” AND “the taxpayer has substantial purpose (apart from federal income tax effects) for entering into such transaction.”  The second prong of that code section is subjective to include “state and local tax benefits” and “financial accounting benefit”.  Again, these cannot be relied upon solely if you also have a federal benefit.  Those darn regulators.

This blog is in response to a blog posted by Jack Sweeney on the Big Fat Finance blog. Sweeney likened fears regarding the IFRS changeover to the Y2K phenomenon while also suggesting that the switch to IFRS was "off". Red Moon Solutions' Kelley Lear shares her rebuttal below. Read the entire original post here.

While this was an interesting blog from Jack Sweeney, I must respectfully and wholeheartedly disagree – on both points.  His supporting point as well as his main point.  Having been technology project manager at a global $9.6 B company during Y2K preparation, I would have to say that we were definitely not being swayed by any media hype regarding doomsday predictions and computer infections ready to bring down the corporate world. We were however, very prepared to address not only all the possible failure points in every software and hardware application globally, but also were well-prepared to mitigate risk associated with other possible vendor solutions.  In addition, our preparation time and planning allowed us to further test our Business Continuity plans in the event that something did happen.  This was not “snake oil” that we bought from a shady salesman, it was internal planning…and it was invaluable.  During the next decade, we were able to leverage all of that work for other contingency plans resulting from system challenges, political and natural disasters globally.

Regarding IFRS, I would have to agree with Jack’s quote that we would switch from using GAAP currently to today’s exact version of IFRS. I disagree that the switch is either “on” or “off”, or that like the ‘Y2K fear mongers’—IFRS has spawned its “army of “proselytizers who appear to be rather adept at the economics of fear”. Although his ‘pros’ here are quite entertaining, I think that we will end up with a version of IFRS that is somewhere in between, something of a “dimmer switch”.

This blog is the first in a two-part series regarding Corporate Legal Entity Simplification, inspired by Red Moon Solutions Managing Director Kelley Lear’s participation in the Chicago Tax Club (CTC) meetings in June.

Although I truly never think that legal entity structures ever could be considered “simple” or in any way “simplified”, I was able to participate in a presentation that at the very least walked us through the issues and structural changes so that even I was able to follow along. In a previous series, I blogged about a session regarding outrageous cases that have hit the tax case law books this year as they continue to irritate corporate tax departments and tax attorneys alike.  Today I have a few words regarding the session on Corporate Legal Entity Simplification.

Todd Miller (Ernst & Young’s Transaction Advisory Services National Leader – Section 382 and Basis Studies, Tax Sell-Side Practice) and Michelle Brady (Ernst & Young’s Transaction Advisory Services Senior Manager) presented a dive into corporate reorganizations/structures.   The agenda covered such topics as:

Red Moon Solutions Offers Tax Professional Toolbar, Putting All Tax Pros In The Know

Sarasota, FL July 14, 2010 -- Red Moon Solutions, a leading provider of specialty tax software solutions, released their latest tool for tax professionals, the Tax Pro Toolbar. The Red Moon Solutions Tax Pro Toolbar is a free browser tool that delivers industry news to tax professionals when they want it, where they want it.

Designed for tax professionals, the free Tax Pro Toolbar offers tax news and alerts from industry leaders in one convenient location, the tax professional's browser. It provides tips and tricks tutorials for tax-related questions and can be customized to include additional applications and links specific to a professional’s needs.

While at the IPT Conference, I was lucky enough to attend a great session called “After the Audit and Through the Appeal moderated by Michael McLoughlin Esq. (Partner Reed Smith), and joined by Tov Haueisen (Senior Tax Manager – General Electric Company) and Neal Meadows, CPA (Clear Channel Communications, Inc.).  The session covered the handling of corporate income tax controversy matters from audit to formal appeal.  It also covered the differences between various state audit and appeal procedures, formalizing and filing appeals and moving/resolving the matter through the appeals process. 

In this series, Red Moon Solutions Managing Director Kelley Lear recounts “Outrageous Cases, Rulings and Arguments” discussed during a recent meeting of the Chicago Tax Club. This is the second in the series.

The next and “most egregious case” that was covered in the in the CTC meeting was “Triple-S Management Corp v. Municipal Revenue Collection Center”.  This was a Puerto Rico case in which the petitioner was incorporated as a “not for profit” entity in 1959, but due to the nature of the business, they were granted tax-exempt status as an operating non-profit entity. 

The entity repeatedly requested letter rulings and documented all correspondence and findings.  In 2003, the Treasury prospectively denied non-profit status. A letter ruling was again issued to the entity.  “CRIM” created in 1991, then took the administration of property tax over from the treasury and decided that it would now refuse prospective application and retroactively go back 15 years to CRIM’s creation and impose property tax on the petitioner.

This is the second in a series of blogs re-capping the 34th Annual IPT conference in Phoenix, Arizona. Red Moon Managing Directors Traci Wheeler and Kelley Lear will detail each day's events.

Day 2 of the Institute for Professionals in Taxation (IPT) conference in Phoenix is well under way.  The morning started with a joint income tax and sales tax technical session, Slicing & Dicing the Business Operations: Do The Tax Parts Add Up to More (or Less) Than the Whole.  The panel, led by David Agosto, Assistant General Counsel – Tax at Verizon, Kimberley Reeder of Morgan, Lewis & Bockius LLP and Arthur Rosen of McDermott, Will & Emery LLP, explored the sales and income tax consequences resulting from business reorganizations and shared insight into ways companies can take advantage of these opportunities to potentially create new state tax efficiencies. One of the many points they made was to always consider why a proposed reorganization is tax-free for Federal income tax purposes. They suggested that if it is because of the Federal deferral principles, consider whether the rules have been adopted in your relevant states and whether deferral or elimination rules are available.  Some of the state tax hiccups that can be encountered are:

This is the first in a series of blogs re-capping the 34th Annual IPT conference in Phoenix, Arizona. Red Moon Managing Directors Traci Wheeler and Kelley Lear will detail each day's events.

Wow!  Day one of the Institute for Professionals in Tax (IPT) conference in Phoenix has been packed full of good content with tracks for income tax, sales tax and property tax professionals.  The day started with an economic and housing market update from Mark Palim of Fannie Mae, who believes the improvement in the demand for housing will be driven by demographics, employment and income growth.   During the Q&A, one attendee asked Mark what he thought the chances were of a double-dip recession given the fragile state of the economy.   He replied that stability and predictability through business investment and consumer confidence are required to avoid this kind of disaster.

Have you ever experienced a time when you were surrounded by (or maybe the cause of) so much change—reforms in health care, Wall Street in flux, even the iPad?  Or do our brains kindly let us forget how much change we’ve already embraced?  Regardless, today's leaders' success is dependent on their ability to deal with this rapid, complex, unpredictable and disruptive onslaught of change.

There seems to be a lot of discussion today about whether the Capital Gain Tax Rate will be increased from the current 15% rate (with no discussion about it being reduced).  The Government seems to be looking at this as a “short term” source of additional tax revenue.  And opponents of the increase are using the “fear factor” saying that investors will not invest if the Capital Gains Tax is raised above 15%.

With respect to the government, I question how much tax revenue will actually be generated in the near term in light of the appropriate and effective tax planning involving capital loss harvesting that took place during the downturn on Wall Street.  15% or more of nothing is still nothing, no?

Although the phrase "first, do no harm" is often attributed to the Hippocratic Oath, it would be fitting to require this oath - not just of physicians - but also of government officials, elected and hired.  Clearly the federal and state governments exercise a tremendous amount of power over citizens and businesses operating within their borders.  The greater the power, the greater the responsibility to exercise extreme care not to inflict harm (intentionally or not).

Last week at the Association for Computers & Taxation (ACT) conference, I attended a session on maximizing the success of your tax technology projects.  It was a great presentation given by Vijay Aluwalia of Varune, LLC.  During his presentation, Vijay put the following list up on the screen and asked us to individually put a percentage next to each one.

Media is obsessed with the negative actions of some C-Level execs—"out-of-control" bonuses and insider trading garner headlines daily.  On the flip side, I’m constantly amazed at the generosity of former CEOs, especially those in "retirement". Whether they find that the glories of golfing and tennis quickly fade or they simply get pushed out of the house by their co-inhabitants, there is a clear enthusiasm for involvement in non-profit work—where the only "out-of-control bonus" is one of pure satisfaction for helping others.

Yesterday was the last day of this year’s Association for Computers & Taxation (ACT) annual conference.  The morning began with an amazing session given by Vijay Aluwalia of Varune, LLC on maximizing the success of your tax technology projects.  He had a lot of good insight both from a client and a vendor’s perspective and really engaged with the conference audience using stories and humor.  He ended the session by leaving us with a list of the top 9 takeaways for tax technology projects:

During conferences and trade shows, Red Moon Solutions Managing Directors Traci Wheeler and Kelley Lear will provide information on the latest updates on the conference goings-on. This is the second in a series regarding the ACT conference in Clearwater Beach, Florida.

The second day of the ACT conference was another content-packed day.  Our morning started with a session co-led by Nathan Andrews (a partner at Deloitte) and Gary Colbert of CORPTAX regarding technology and process improvements companies can make in preparation for IFRS.  The session combined tax technical information and technology usage ideas in order to address the biggest challenges facing companies today.  One attendee posed the question: “What are the top three things we should focus on now?”  Andrews and Colbert suggested the following: (1) begin reading and getting your arms around IAS 12, (2) start planning for IFRS—it’s never too early to begin looking at the issues and (3) perform a systems review – ensure you understand all of the different systems globally that may have an impact on IFRS reporting.  Learn more about IAS 12 and get more information on IFRS at the International Accounting Standards Board (IASB) website: http://www.iasb.org/Home.htm.

During conferences and trade shows, Red Moon Solutions Managing Directors Traci Wheeler and Kelley Lear will provide information on the latest updates on the conference goings-on. This is the first in a series regarding the ACT conference in Clearwater Beach, Florida.

Day two of the Association for Computers and Taxation (ACT) annual conference in Clearwater Beach, Florida is well underway.

We had a great first day yesterday filled with informative tax and technology sessions, as well as a vendor expo.  The morning started out with a great session on the impact of the new schedule to disclose uncertain tax positions.  Ronald Schultz, a senior advisor with the IRS, gave us some insight into the IRS’ goals and philosophies behind the new schedule.  He indicated their goals are to get more information from taxpayers upfront to assist them in audit selection and issue examination.  They want to stay away from handicapping taxpayers, however, so they will not ask for taxpayers to quantify risk with reserve information related to those uncertain positions.  They are only concerned with US Federal income tax positions and the impact those positions will have on the tax return for the current year.  The new schedule will be required for 2010 tax years filed in 2011.  The IRS is looking for feedback from corporate taxpayers and is accepting comments until June 1st.  For more information on the proposal, to see the new schedule or provide your comments, visit the IRS website.

During the past year or two, our country has been dealing with significant economic issues.  As a result of this, unemployment has increased, government programs have been stretched and everyone feels like they have less certainty and fewer resources to take care of themselves and their families.

Over the last 50 years, we have created and revised a tax system that virtually no one likes and no one person totally understands. For example, we in effect have multi laws to deal with (regular and AMT) and special limitations on virtually everything that may be deductible – both of which force over 80% of tax payers to get help in preparing their returns, including past Commissioners of the IRS.

From a business standpoint, it is difficult enough to deal with market trends, natural disasters and changes in the environment; but why do we have to deal with the complete uncertainty of the tax law inflicted by our government?

I believe it was Michael Traylor who said, “If it weren’t for the last minute, a lot of things wouldn’t get done.”

This is a guest blog written by Red Moon Solutions Project Manager, Stacy Shedivy. It is the first in a series on going green and corporate social responsibility.

For a while now we have been bombarded with articles, TV programs and even movies about "the importance of going green" (there are over 86M Google results on this). Lucky for the environment, many businesses have jumped aboard the green bandwagon, whether with honest intentions or for publicity's sake (or maybe a little bit of both).  Red Moon Solutions has the best of intentions.

The first step we took to “deepen” our shade of green was to acknowledge Corporate Social Responsibility as one of our key strategic goals—with environmentalism as one of its core components.  We then identified both long- and short-term activities we could do to help achieve this goal. Below I’ve compiled a list of some of the things we’ve done—is your company going green, as well?