Activities and Responsibilities:
Tax and auditing departments are similarly structured, with partners heading the various specialties within the division. Tax clients-both individuals and organizations are served either by individual accountants or by teams of accountants for major or complex problems requiring a coordinated effort by tax accountants in different specialties.
Junior or first-year tax staff begin their career with extensive tax-return preparation under senior staff supervision, including local, state, and individual tax returns for individuals, partnerships, and, in some cases, corporations. This establishes the groundwork for more extensive tax work in the future. As junior accountants begin to assimilate tax law and master basic return preparation, they are given increasingly complex tax returns to complete. Although tax-return preparation may be tedious, it is necessary for an accountant's development; without such experience tax planning and research is impossible.
Senior tax accountants, who generally have had at least two years experience at the junior level, continue to prepare tax returns, although they handle the more difficult ones, such as consolidated corporate returns. The coordination and review of junior staff work is a major role of the senior tax accountant. He or she also begins to be exposed to tax research and planning by assisting managers in business client or individual tax work. At this point senior staff may begin to focus on specialized areas within taxation, such as corporate distribution and liquidations, either through on-the-job training or formalized training courses.
Tax managers function either as tax specialists or generalists, depending on preference. Generalists serve the needs of several business clients, organizations, or individuals, and handle the complete range of tax work for them, assisting in tax planning and return preparation. Tax managers who have chosen specialized work spend most of their time dealing with one specific area of taxation. Whether a generalist or a specialist, managers spend a great deal of time on tax research, shifting through tax law, regulations, and cases, and creatively devising solutions to their client's tax problems.
Educational Background and Training: The educational and work-experience backgrounds of entry-level tax accountants vary, depending to a large extent on firm policy. Entry-level college graduates with no prior experience generally must indicate a strong interest in taxation or have a concentration in undergraduate tax courses to be hired into tax departments. Typically, audit personnel with one or two years of experience and a career interest in taxes may transfer into the tax area. Many tax departments recruit law-school graduates with a major in tax law, although tax departments do not practice law as such. The law student's exposure to tax law is a valuable asset in understanding and working with the Internal Revenue Code. A person with an MBA or Master's in taxation makes another attractive tax department recruit. Prior work experience is also taken into account, as is evidenced by the number of former IRS staffers hired by public accounting firms for the tax department.
Regardless of educational background, those without prior experience will begin their career with tax-return preparation. Those with tax or general accounting experience might begin with more advanced duties. Any exposure to tax-return preparation, whether through college courses or actual job experience, will permit more rapid advancement within the department.
Tax accountants working for firms with training programs will probably take a formal tax or audit training program before beginning a career. Auditing experience is especially valuable. Knowledge of how businesses operate and are organized financially has direct application to tax practice. An understanding of accounting concepts, such as depreciation or inventory pricing, is also required when dealing with their tax implications. Since some states require audit experience for their CPA candidates, occasional work assignments to the auditing department to perform a general audit, or audit of tax accounts might occur.
Attributes of Successful Tax Accountants: Having a thorough knowledge of the tax law (Internal Revenue Code) and keeping abreast of current tax developments are major attributes of successful tax accountants. As new tax laws emerge and accounting methods and procedures change, the tax accountant must not only understand the changes but have the ability to apply them to varying tax situations. In addition to new tax law, rulings by IRS and various administrative bodies must be included in the tax accountant's body of knowledge, along with emerging business and economic trends.
Research, writing, and analytical skills must be applied to tax problems; quite often problem structuring requires more analysis than does devising the actual tax solution. As a tax accountant, you would have to break down the problem into its components and then decide on the needed type of research and research sources, such as internal revenue statutes and related tax cases and rulings. Once you have devised solutions, you would prepare summary reports detailing findings and explaining how clients are to put them into practice.
Similarly, oral communication plays a part in tax practice. Many cases require substantial work with other tax accountants to create successful solutions. Since client work is an ongoing process, you will be called on continually to deal with client problems and developments requiring tax expertise. This requires communicating with clients on short notice and responding quickly and concisely to their requests.
Finally, levelheadedness and the ability to work well under pressure are crucial in busy tax departments. The heavy tax season lasts from January to April, and fourteen-hour days, seven days per week, are common. Travel may be required, but is not as common as overtime. Working well under this type of pressure and producing work of quality is important; those unable or unwilling to deal with time pressure will find the going rough.
Promotion within tax departments is based on factors such as technical knowledge, research expertise, and supervisory skills. As in auditing, supervisory skills are crucial. Individuals possessing solid technical knowledge but poor or nonexistent supervisory skills will find career progress hampered.
Tax personnel are sometimes called in on audits to review tax accounts whose complexity prevents audit personnel from performing the work themselves. However, transfers of staff from the tax department to auditing are not common. Tax personnel also do occasional work assignments with other divisions, such as management advisory services (MAS) or small business, on projects requiring tax expertise. Transfers from the tax department to MAS or small-business divisions sometimes occur. Tax personnel with anywhere from two to five years experience will find their services actively sought by firms in the private sector. Those with CPA licenses will be in special demand, and can enter into a business corporation's tax department or smaller CPA firm as a tax manager.
Enjoyment of tax work requires that you enjoy sifting through large amounts of information, both legal and quantitative, creatively molding that information to devise solutions to tax problems. Although tax work requires communication with fellow tax accountants and clients, it also involves hours of individual research, thought, and report writing. People desiring a constant level of human interaction will probably not find tax work stimulating. Perhaps the most common characteristic tax accountants share is the knowledge that they understand and can put to use a body of technical and complex knowledge not readily understood by most people.
