New Tax Law Increasing Need for Specialized Tax Professionals

When President Donald Trump signed the new Tax Cuts and Jobs Act into law last December, it included the most sweeping changes to tax structures for corporations in decades, leading companies to assess the impact on their financial statement disclosures and creating additional financial reporting and audit risk considerations to both companies and their external auditors.

With studies showing tax account complexity and judgement errors as common reasons for tax-related misstatements, the Big 4 accounting firms have been focused on addressing the latest tax accounting developments and ASC 740, a set of financial accounting and reporting standards, for the effects of income taxes that result from a company's activities during the current and preceding years.

Companies, when facing increased strain in their internal tax department, may consult with specialized tax professionals to achieve better control over tax accounting issues. Companies typically use either one or a combination of (1) their external auditor, (2) other consultants including tax and law firms, or (3) their internal tax departments for tax compliance and planning services.

In addition to the reduction in the corporate tax rate from 35 to 21 percent, tax professionals face a new tax regime for foreign earnings and a mandatory earnings repatriation tax, new limits on interest and net operating loss deductions, the elimination or expansion of deductions, the retirement of tax credits and the creation of even more.