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Q&A Forum

Internal Tax Hire?

At what point did your company deem it cost effective and/or worthwhile to hire an internal tax expert vs. using an external firm? Not just from a cost standpoint, but being ahead of the curve on compliance.


(CFO/Board Advisor) |

Only when our tax compliance and planning costs with outside advisors became greater than $400,000 annually. Because the complexities, and types of taxes: income, sales & use, property, state are such, that no single individual is really an expert on all of these areas. As such, using outside experts, in my case it has usually been a Big 4 or National CPA firm, has actually provided the best answer. Much of the compliance effort can be done very cost effectively, even sales taxes, by outside advisors. The real cost comes into play in the planning and how transactions will be taxed. As such, I have standing monthly meetings with my tax advisor. Also, since our tax advisor is usually different than my auditor (both are Big 4 firms) it also allows us to outsource the income tax provision work to our tax preparers as well.

The above said, I may have a dedicated staff/senior accountant that's works solely on compliance projects/issues to save on staff time from the outside advisors.

Randall Hylek
Title: President
Company: RJH Consulting
(President, RJH Consulting) |

Good answer from anonymous

(Chief Financial Officer) |

I have been in companies with $100-200 million in sales and had 1-2 people dedicated to tax. I am currently in a $800 million company and we use a Big 4 firm to prepare returns, but we prepare the provision workpapers. We also deal with as much compliance as we can, but we have a large "blindspot" as we don't spend enough time on this. Depending on complexity and size, I am a big proponent of having someone in house that is dedicated to tax. Companies greater than $200 million should strongly consider part or full time in house tax professionals.


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