As Tax Year 2018 ushered in TCJA’s changes and new forms, tax departments worked hard to assemble and analyze data needed to support their tax positions. However, the absence of final IRS guidance has given rise to several concerns:
- How to handle inconsistencies between new forms and IRS guidance.
- How to manage data dependencies caused by new regulations.
- How to retrofit spreadsheet calculations with newly-required data.
Case in point: New IRS Form 965, which reports the 2017 transition tax (due with the 2018 return), used final regulations released January 2019. Many corporations calculated their TY2017 transition tax in Excel® and manually entered data at a high level at least three months before the final regulations and new form were released.
Now, for the 2018 transition tax, the same 2017 data must be included with the consolidated federal return but at a more detailed level. Further, tax attributes used for the 2017 filing must be reevaluated and reconciled before filing the 2018 return. In order to report in such detail, tax teams must restructure spreadsheets and recalculate numbers to ensure compliance with new requirements—paving the way for errors and elevating risk.
On the other hand, corporations using the right software to automate calculations to compute and file the 2017 transition tax have a distinct advantage: data is organized, stored, and secured in one place to reconcile balances and populate the new form.
Single-System Architecture: A Help in Times of Change
The bottom line? Many tax teams rely on consultants to store calculations offline, limiting the team’s ability to flex with changes. Compiling, calculating, and storing well-structured data in a single system provides much-needed agility.
CSC Corptax® delivers targeted automation to help tax professionals gather data from disparate sources, perform complex calculations, feed results into analytics tools, and visualize outcomes for better planning. If and when newly-issued guidance changes assumptions, it’s easy to quickly adjust.
Read the related article TCJA’s Dependency Problem to track how changes made to a GILTI, FDII, BEAT, or FTC calculation can affect other calculations.