Tax controversy and regulatory services (TCRS)
What is the current state of tax controversy?
Today’s tax controversy landscape represents a perfect storm of competing factors. In addition to understanding and complying with the complexities coming out of tax reform, the IRS is increasing its enforcement efforts and focusing on large business tax compliance and international tax issues. Audits are becoming more contentious, with both Exam and Appeals seeming to be increasingly unwilling to settle. Revenue constraints are causing states to challenge taxpayers more aggressively. At the same time, taxpayers are required to be more transparent, causing them to be more exposed on significant tax liabilities.
How can companies prepare?
Companies can minimize disruption to their business operations by taking steps to prevent tax disputes, proactively manage them when they arise, and creatively resolve them in a timely and favorable manner, without the need for costly and unpredictable litigation. Navigating regulatory practices and procedures also may be an option for companies wishing to manage their tax risk. In addition, pursuing published guidance from the IRS and Treasury Department may be an important element of a company’s tax risk management strategy, particularly if the uncertainty affects a number of taxpayers.
Why is mitigating/managing risk important?
Effective tax dispute prevention, management, and resolution allows companies to focus on their business operations and objectives as well as reduce the impact on their financial and personnel resources. By obtaining greater certainty and clarity from the IRS and Treasury Department, companies can reduce their risk of controversy along with compliance costs.
How PwC can help
PwC’s Tax Controversy and Regulatory Services practice includes several former IRS and Treasury Department officials who are uniquely qualified to advise companies during each phase of an IRS dispute life cycle.
‘Getting ahead of the issue’ by proactively limiting tax risk
Defense file preparation
Strategic risk assessment/mock audits
ASC 740/UTP reporting review
Private letter rulings
Pre-filing agreements
Closing agreements
Industry issue resolutions
Participation in Compliance Assurance Process (CAP)
Streamlining and shortening the audit process and resolving issues at lowest level
- Negotiate scope and timing of audit
- Advise best practices for answering document requests and managing privilege claims
- Assist with employee interviews
- Develop taxpayer presentations
- Resolve issues at the examination level
- Elevate issues ‘up the chain’ at taxing authority, when appropriate
Analyzing litigation hazards, developing defense strategies, exploring alternative dispute resolution opportunities, and advocating for successful dispute resolution
Administrative appeals
‘Fast track’ appeals alternative
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