Whistleblowers in Corporate Tax Departments: A Sign of Things to Come?

Posted by Traci WheelercloseAuthor: Traci Wheeler Name: Traci Wheeler
Email: traci@redmoonsolutions.com
Site: http://blog.redmoonsolutions.com
About: Traci is a member of the executive leadership team and leads our sales and marketing efforts at Red Moon Solutions. She has over ten years of software business experience serving small and large clients in a variety of industries.See Authors Posts (120) on Feb 8, 2012 | 0 comments

No corporate tax department wants an IRS auditor digging through their work papers and documentation.  However, with the introduction of FIN 48 and now Schedule UTP, the transparency the IRS now has into a corporation’s tax positions is greater than ever.  These two initiatives alone have created a lot more work for the tax department and increased the visibility the corporate tax department has within an organization.  Corporate executives, who can be held responsible, are now paying more attention to tax risk management and the tax positions their companies are taking.  But there may be another cause for concern that should raise the eyebrows of corporate tax departments and corporate executives alike.

Two weeks ago, Martin Williams, Managing Director at Alvarez & Marsal, posted an interesting article, Are the Secret Police in Your Tax Department, where he purports there will be more tax department whistleblowers, motivated by personal financial gain, in the future.  He brought up some very good questions and things to think about in his article.  I encourage you to read it.  I also wanted to to pose some questions of my own to our readers to see what you think.

1. Do you think Martin is correct in his assertion?
2. If so, what will that mean in your tax department?  What new policies and procedures will be put in place?
3. With so much subjectivity regarding right and wrong in an already gray area, what will your tax department do to make sure tax department staff don’t feel like there has been a violation?
4. Does this change the kind of documentation and preparations you would make regarding audits?

I think this is a very interesting subject and something that should definitely be in the back of the mind of any corporate tax department today.  I would love to hear our readers’ thoughts on this matter.  Please share in the comments below.

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