Whether or not related to state and local tax authorities' increased assertiveness, more than 66% of respondents do not believe that state revenue authorities are becoming more efficient at risk assessment than in the previous three years.
Insight
KPMG's tax dispute resolution benchmarking study focuses on how in-house tax disputes professionals are responding to controversy challenges in a dynamic disputes environment.
KPMG’s 2018 Tax Dispute Resolution Benchmarking Report highlights the issues facing U.S. multinational companies as they navigate audits and disputes with state, U.S., federal, and international tax authorities.
The findings are based on a survey completed by 159 professionals leading the tax function in a cross section of U.S. multinational companies. Three-quarters of the responding companies (respondents) have annual revenues of $1 billion or greater.
Based on the survey results, dispute activity with state and local tax authorities has increased significantly.
Sample findings
75% of respondents have been involved with a dispute with state and local tax authorities in the past three years, compared to 62% with the IRS and 51% with a foreign tax authority.
49% of respondents' companies have an established process for managing their tax disputes.
57% of the teams responsible for their organization's tax exams and disputes do not have professionals with specific tax dispute management experience.
Only 16% of responding companies typically bring in an external tax advisor at the pre-audit stage.
Despite BEPS and OECD collaborative efforts, only 33% of respondents have seen an increased in the sharing of information among tax authorities globally.
46% state that the level of difficulty in reaching a resolution with the IRS has increased over the past three years.
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Respondent profile
Survey respondents were senior executives leading the departments of those responsible for managing their companies' tax controveries: chief tax officers, tax vice presidents, and tax directors.
The respondents' primary industries include:
Electronics
Insurance
Engineering
Energy & natural resources
Software
Food
Transportation
Industrial products
Business services
Chemicals
Beverage
Retail
Consumer goods
Conglomerates
Banking & finance
Pharmaceuticals
Metals
Tax dispute activity continues to grow, more in some areas than others, as do the level of cooperation among global tax authorities and the assertiveness of those authorities seeking information and proposing assessments.
KPMG LLP’s tax dispute resolution outlook report
Want to learn more? Download the full report here to see how in-house tax disputes professionals are meeting their responsibilities and how they are responding, and expect to respond, to controversy challenges in a dynamic disputes environment.
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