Key takeaways:

• • • Prompt engineering pays off 鈥� Tax professionals who master clear, contextualized AI instructions see immediate gains in output quality and speed.

    • AI doesn鈥檛 replace professional responsibility 鈥� Every output that carries your name requires your verification and your judgment.

    • Link learning to a real problem 鈥� The most effective way to build needed skills is to focus on your current workflow, not to chase every new tool as it emerges.

For tax professionals, technical excellence used to be enough. Know the code, understand the cases, apply the rules correctly 鈥� that was the job, and it was sufficient. It isn’t anymore. Not because the technical knowledge matters less, but because the professionals competing for the same work increasingly bring other talents to the table, such as the ability to do in an hour what used to take a day; to provide insights from data that would have taken a week to compile manually; and to deliver polished, well-reasoned analysis at a pace that wasn’t possible five years ago.

This rarified capability doesn’t come from intelligence or experience alone; rather, it comes from skills 鈥� specific, learnable, practical skills.

The data bears this out. Improving efficiency through technology has been the top strategic priority for firms for three consecutive years, with 44% of firm leaders citing it as their primary focus, according to the 成人VR视频 Institute鈥檚 . Indeed, 47% of tax professionals surveyed said investing in AI should now be a top priority 鈥� and yet, 18% of firms still use no automation at all.

This gap between intention and capability is real, and it sits squarely with the individual tax professional.

The skills most needed by today鈥檚 tax professionals

To help close this gap and improve tax professionals鈥� overall work value, there are several specific skills that demand attention, including:

Prompt engineering: The skill nobody takes seriously until they see what it does

The name doesn’t help 鈥� but set that aside, because the underlying skill is straightforward: giving your AI tools clear, precise, well-contextualized instructions that produce outputs that are worth using.

Most people start badly when approaching a blank AI screen. They type something vague, get something generic, and conclude the tool isn’t useful. That conclusion is wrong, because it was the instructions given, the prompt, that was the problem. Specify the entity type, jurisdiction, tax year, audience, and format. Then tell the tool what you need and why. The difference in output quality is not marginal.

Of course, it鈥檚 important to remember that AI will tell you things that are wrong with complete confidence. It will cite an amended provision, apply a rule from the wrong jurisdiction, or construct a plausible analysis on a flawed premise 鈥� all without flagging any of it. The professional responsibility to catch it remains entirely upon the user. That’s not a flaw in the tool; it’s a reminder that expertise isn’t being replaced here 鈥� it’s being put to better use.

Data literacy: The capability gap most tax professionals don’t know they have

Tax work is data work. Today, what has changed is the expectations around the volume and complexity that professionals are now required to handle, interpret, and present, often with fewer resources than a decade ago.

Advanced spreadsheet proficiency is the starting point, and the emphasis on advanced is deliberate. The features that most professionals have never explored are precisely the ones that separate those who spend three hours processing data from those who spend 20 minutes. The ability to build visual dashboards that communicate tax data clearly 鈥� effective tax rates, provision variances, deferred movements, and more 鈥� is increasingly an expectation in corporate environments rather than a differentiator. For those professionals who handle large datasets or complex scenario modeling, even a foundational understanding of represents a significant capability uplift.

The Tax Professionals Report found that 57% of firm leaders cited getting better use out of existing technology as their top investment priority 鈥� more than those planning to buy new systems. The problem, in other words, isn’t the tools; it鈥檚 having the skills and the understanding to use them.

Workflow automation: Reclaiming time from work that shouldn’t exist

Look at any tax workflow closely and you’ll find steps that are repetitive, rule-based, and time-consuming 鈥� not because they require a tax professional鈥檚 skilled judgment, but because nobody has stopped to ask whether these routine tasks could be done differently.

Again, the harder part of improving your skill set as a tax professional isn’t learning the tools; rather, it’s developing the habit of process analysis, a way of thinking that will allow you (among other things) to distinguish between steps that require genuine expertise and steps that are simply consuming time.

AI judgment: Knowing what to trust and what to verify

This is the skill that determines whether AI makes you more effective or creates problems you didn’t anticipate. This means validating outputs against primary sources before they reach a client. It means recognizing that AI reflects training data that may be outdated or jurisdiction-specific in ways that aren’t readily apparent in the output. And it means knowing when a task is too nuanced or too high stakes for AI to handle reliably.

Professional responsibility does not transfer to the tool itself. If an AI-generated analysis carries your name, it is your analysis.

Communicating and staying current

As routine tax compliance work becomes more automated, the premium on communication rises sharply. The Tax Professionals Report found that three-quarters of clients now strongly desire advisory services beyond tax preparation from their outside tax professional 鈥� yet most tax firms still derive their greatest profits from simple tax return preparation.

Those professionals who can close that gap are those who can translate technical work into clear, confident guidance that their clients can act on.

Going forward, the tools will keep changing. Identify the problem in your current workflow that costs the most time, find the skill that addresses it, and build from there. The professionals who will define the next decade will combine this deep technical knowledge with the ability to work faster, more clearly, and more adaptively than those who came before them. That combination is not yet common, but it鈥檚 also not out of reach.

For more on how tax professionals are navigating technological change, visit the or download the full 2025 State of Tax Professionals Report

Key takeaways:

• • • Your post-OBBBA forecasts should look different 鈥� If the tax department doesn’t own the OBBBA model, someone else will own the OBBBA story.

• • • Rely on your department鈥檚 inner strengths 鈥� It鈥檚 governance and analysis 鈥� not tools 鈥� that get you into the strategy room.

    • Factor in the conflict in the Middle East 鈥� The Iran war risk belongs in your tax model, not just in your CFO’s macro deck.

The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, enacted large business tax cuts, most notably by providing permanent full expensing of many forms of investment. Under the previous major corporate tax legislation, 2017鈥檚 Tax Cuts and Jobs Act (TCJA), bonus depreciation was scheduled for gradual phase-out following 2023. The OBBBA restored that expensing 100% retroactively for assets acquired from mid-January 2025 onwards.

The after-tax cost of new machinery, fleets, and equipment has effectively fallen by around 21%, designed to encourage immediate capital outlays by allowing businesses to write off these expenses in the year they are incurred rather than amortizing them over five years.

For corporate tax departments, that’s not a disclosure footnote 鈥� that’s your capital plan.

Capital-intensive corporations will see tax burdens reduced through permanent rate extensions, depreciation adjustments, and expansion of the state and local tax (SALT) deduction cap 鈥� but only if your models are built to capture the timing and location of investment, the mix of debt compared to equity, and where your organization books its next dollar of income.

Not surprisingly, most corporate tax departments aren’t there yet. They’re still recalculating last year, plus a few adjustments. That’s glorified compliance, not modeling.

A standout tax department doesn’t ask, What’s the OBBBA impact? Rather, it asks, Which version of OBBBA do we choose for this business? 鈥� and it has the models to back it up.

From spreadsheet heroics to controlled modeling

For many organizations, tax modeling still means creating a massive spreadsheet that only one director truly understands. The spreadsheet gets pulled out for budget season, rebuilt under pressure, and quietly retired until next year. That’s a single point of failure, not a process.

And after OBBBA, continuing that practice is dangerous. One wrong assumption on expensing or interest limitation can move cash tax by millions of dollars and blindside the Finance Department.

Here’s what disciplined modeling looks like in practice:

• • • Create a unified model 鈥� Build one integrated model that the whole team can use or accept that your department is choosing to fly blind.
    • Use the same assumptions 鈥� Standardize the levers that matter most (such as capex timing, financing mix, jurisdiction, and incentives) and make sure every scenario runs off the same assumptions.
    • Conduct modeling reviews 鈥� Treat major OBBBA-driven decisions (such as large capex, funding shifts, supply-chain redesign) as tax deals that must go through a modeling review before they’re greenlit.
    • Document your assumptions explicitly 鈥� Under permanent full expensing, the difference between a well-supported assumption and a poorly documented one isn’t just an audit risk, rather it’s a credibility problem with your CFO.

It鈥檚 also important to remember that in a post-OBBBA world, this level of disciplined modeling is not technology transformation 鈥� it鈥檚 basic survival.

Governance: Where leaders quietly win or loudly fail

The differentiator isn’t which corporate tax department has the fanciest tool 鈥� it’s which one has the cleanest governance. And the data is unambiguous: More than half (55%) of tax departments are still in the reactive phase of their technological development, stuck with five capex models circulating with five discount rates and the tax team arriving late to the planning meeting.

Those tax departments that are breaking out of that pattern share one trait: They put someone formally in charge. In the 成人VR视频 Institute鈥檚 recent 2026 Corporate Tax Department Technology Report, a large portion (88%) of survey respondents said their company had appointed a person to lead the tax department’s technology strategy. That number jumped a whopping 37 percentage points, from 51%, from the previous year鈥檚 survey. That single structural move separates those departments with a governance model from those that simply hold a governance conversation every budget cycle and forget about it.

Clearly, this type of ownership drives results. Two-thirds of those surveyed agreed that their company’s investment in technology has enabled a shift from routine, reactive work to more strategic, proactive, higher-value work.

Under OBBBA, the kind of governance isn’t housekeeping. It’s how you get invited into strategy discussions instead of having to clean up after things go awry.

Why your OBBBA win may not feel like a win

On paper, the tax changes embedded in the OBBBA look generous. In practice, your effective tax benefit is colliding with something you don’t control.

When the war on Iran began, all shipping through the Strait of Hormuz was effectively halted, removing roughly one-fifth of the world’s oil and gas supply from the market. Fuel prices throughout the world spiked and are likely to remain elevated as long as conflict persists.

With oil prices hovering around $100 a barrel, there are will wipe out the benefits of higher tax refunds this year for most Americans. If those benefits, arising from Trump’s 2025 tax cuts, are erased for the average American, only the top 30% of taxpayers will still seeing a net gain.

For corporate planning purposes, the parallel dynamic is real: The topline OBBBA benefit is being eroded by higher fuel, freight, and financing costs across the business and its supply chain.

Inflationary pressures are being driven by higher energy prices tied to the Iran war, and the conflict’s impact on a wide range of goods and services is likely to last for months 鈥� with experts saying even a ceasefire is unlikely to immediately ease global energy shortages.

A serious corporate tax department doesn’t handwave these concerns away. It takes three actions:

1. 1. 1. Run a war-extended scenario 鈥� The scenario should show exactly how sustained higher energy costs and borrowing rates change the payoff from accelerated expensing and leverage 鈥� with specific numbers, not just directional commentary.
      2. Share your forecasts internally 鈥� Put your monthly or quarterly cash-tax forecasts on the table for Finance to see, so that it can manage liquidity rather than hope the annual plan holds.
      3. Force the hard conversation 鈥� Ask the tough question: At today’s rates and fuel costs, the after-tax return on this project is X. Are we still in? That question should come from the tax team now, not from the finance team six months later.

Clearly, the daily fluctuations in oil prices matter less than monthly and quarterly averages 鈥� and volatility will likely remain elevated given the absence of a clear timeline for the end of the war. That’s exactly the kind of sustained uncertainty that belongs front and center in your scenario set, not in a footnote.

The bottom line

The OBBBA gives corporate tax departments a genuine opportunity to move from being simply a compliance function to becoming more of a strategic advisor. Permanent full expensing, richer cost recovery, and more flexible interest rules can create real levers to add value, but only for those organizations that model them rigorously, govern them cleanly, and stress-test them against the macro environment their business actually faces today.

Indeed, the Iran war is a live test of that readiness. The corporate tax departments that show up with modeled scenarios, cash-tax forecasts, and a clear point of view on after-tax returns will earn a seat at the strategy table. The ones that show up with caveats will be asked to leave it.

You can download a full copy of the 成人VR视频 Institute鈥檚 recent 2026 Corporate Tax Department Technology Report here

Key takeaways:

• • • Country-by-country reporting will only increase in complexity 鈥� Australia’s enhanced Country-by-country reporting (CbCR) requirements 鈥� reconciling taxes accrued against taxes credited 鈥� are a preview of where other high-scrutiny jurisdictions are heading, and companies need to build that explanatory analysis capability now, systematically, rather than scrambling later.

    • There has to be a shared narrative from corporate teams 鈥� The EU鈥檚 public CbCR is a reputational event, not just a filing. So that means tax, communications, and investor relations teams need a shared narrative before the data goes public 鈥� inconsistencies create exposure you do not want to manage reactively.

    • Rethink your filing jurisdiction in light of changes 鈥� If EU filing jurisdiction was chosen at initial implementation and never revisited, look again. Guidance has matured, and a more efficient or better-suited option may now be available.

WASHINGTON, DC 鈥� Among the many pressing topics discussed in detail at the recent , country-by-country reporting (CbCR) and its ability to reshape the corporate tax industry, certainly had its place. Between escalating local jurisdiction requirements, the , and for deeper explanatory disclosures, CbCR has quietly evolved from a transfer pricing filing obligation into something far more strategically consequential.

The floor is just the floor

The creation of the by the Organisation for Economic Co-operation and Development (OECD) was intended as a minimum standard for countries. And now jurisdictions are increasingly layering additional requirements on top of the OECD鈥檚 basic template, resulting in a widening gap between the standard requirements and what tax authorities actually want.

Currently, Australia is the most pointed example. Australian tax authorities are now requiring multinational groups to go beyond the standard CbCR data fields and provide explanatory narratives that reconcile taxes accrued against taxes actually credited. This requires corporate tax departments to bridge the gap between financial statement accruals and their organizations鈥� cash tax positions in a way that is coherent, defensible, and consistent with positions taken elsewhere.

At the TEI event, panelists explained that for tax departments this will carry complex timing differences, deferred tax positions, or significant jurisdictional mismatches between booked and cash taxes. Indeed, this additional layer of scrutiny will need dedicated attention.

The broader signal matters: Australia will not be the last jurisdiction to move in this direction. So that means that tax departments should treat Australia’s approach as a leading indicator of where other high-scrutiny jurisdictions could be heading. Building the capability to produce this kind of explanatory analysis systematically 鈥� rather than scrambling jurisdiction by jurisdiction 鈥� would be the smarter long-term investment for corporate tax teams.

Public CbCR in the EU: The transparency ratchet has turned

For US-based multinationals with significant European operations, the EU’s public CbCR directive has fundamentally changed the calculus. Unlike the confidential tax authority filings most corporate tax departments are accustomed to, the EU鈥檚 public CbCR rules put organizations鈥� jurisdictional profit and tax data into the public domain, making it visible to investors, journalists, civil society groups, and organizations鈥� employees and customers.

The EU framework specifies which entities trigger the reporting obligation and which entity within the group is responsible for making the public filing. That scoping analysis is not always straightforward for complex multinational structures and getting it wrong could present both reputational and legal risk.

Choosing a filing jurisdiction is not purely an administrative decision 鈥� it is a choice that affects the regulatory environment that governs the disclosure, the language requirements, the timing, and the interpretive framework that applies to data.

For US-headquartered groups, the implications extend well beyond Europe. Public CbCR data is now being read alongside US disclosures, reporting on ESG activities, and public narratives about tax governance. Inconsistencies, including those technically explainable, could create unwanted noise about the company. This is clearly another reason why the tax function should partner across the business 鈥� in this case with the communications team 鈥� to make they both are aligned to tell the CbCR story instead of being caught off guard by a journalist or an investor during an earnings call.

Questions that US multinationals should be asking

Fortunately, US multinationals with multiple EU subsidiaries are not required to file public CbCR reports in every EU member state in which they have a presence. Instead, under the EU framework, a qualifying ultimate parent or standalone undertaking can satisfy the public disclosure requirement through a single filing in one EU member state, provided the relevant conditions are met. Germany and the Netherlands have emerged as two of the more popular choices for this consolidated filing approach, given their well-developed regulatory frameworks and the depth of available guidance on what compliant disclosure looks like in practice.

The strategic implication is meaningful. Choosing a filing jurisdiction is not purely an administrative decision 鈥� it is a choice that affects the regulatory environment that governs the disclosure, the language requirements, the timing, and the interpretive framework that applies to data. Corporate tax departments that defaulted to a filing jurisdiction early in the EU implementation process should take a fresh look. Regulatory guidance has matured significantly, and there may be a more efficient or better-suited path available than the one originally chosen.

The uncomfortable divergence

There is a notable irony in the current environment. Domestically, the IRS and U.S. Treasury’s 2025-2026 Priority Guidance Plan reflects an explicit focus on deregulation and burden reduction, detailing dozens of projects aimed at reducing compliance costs for US businesses. Meanwhile, the international compliance environment has moved in the opposite direction, adding disclosure layers, explanatory requirements, and public transparency obligations that many US businesses cannot avoid simply because they are headquartered in the United States.

This divergence has a direct implication for how tax departments allocate resources and make the internal case for investment in international compliance infrastructure. The burden internationally is not going down 鈥� indeed, it is intensifying 鈥� and that argument is now backed by concrete examples rather than projections.

3 things worth doing now

There are several actions that corporate tax teams should consider, including:

Audit CbCR data quality with Australia’s enhanced requirements in mind 鈥� If you cannot readily reconcile taxes accrued to taxes credited at the jurisdictional level, that gap needs to be closed before it becomes an authority inquiry.

Revisit EU filing jurisdiction strategy 鈥� If your jurisdictional decision was made at the time of initial implementation and has not been reviewed since, it is worth a fresh look before the next reporting cycle.

Develop an internal narrative around public CbCR data before it circulates externally 鈥� Your company鈥檚 tax story should not be a surprise to the corporate teams involved in communications, investor relations, or ESG 鈥� and in today鈥檚 world, assuming such news stays quiet is no longer a safe assumption.

While CbCR started as a tool for tax authorities, it today has become something more visible, more public, and more consequential than that 鈥� and that trajectory is not reversing any time soon.

You can download a full copy of the 成人VR视频 Institute鈥檚

Key takeaways:

• • • Only IEEPA鈥慴ased tariffs are up for refund 鈥� Refunds will flow electronically to importers of record through ACE, the government鈥檚 digital import/export system, but only once CBP鈥檚 process is finalized.

    • Liquidation and protest timelines are now critical 鈥� An organization鈥檚 tax concepts that directly influence which entries are eligible and how long companies have to protect claims.

    • Tax functions must quickly coordinate with other corporate functions 鈥� In-house tax teams need to coordinate with their organization鈥檚 trade, procurement, and accounting functions to gather data, assert entitlement, and get the financial reporting right on any tariff refunds.

WASHINGTON, DC 鈥� When the United States Supreme Court issued its much-anticipated ruling on President Donald J. Trump鈥檚 authority to impose mass tariffs under the International Emergency Economic Powers Act (IEEPA) in February it set the stage for what it to come.

The Court ruled the president did not have authority under IEEPA to impose the tariffs that generated an estimated $163 billion of revenue in 2025. In response, the Court of International Trade (CIT) issued a ruling in requiring the U.S. Customs and Border Protection (CBP) to issue refunds on IEEPA duties for entries that have not gone final. That order, however, is currently suspended while CBP designs the refund process and the government considers an appeal.

At聽the recent , tax experts discussed what this ruling means for corporate tax departments, outline what is and isn鈥檛 a consideration for refunds and the steps necessary to apply for refunds.

As panelists explained, the key issue for tax departments is that only IEEPA tariffs are in scope for refund 鈥� many other tariffs remain firmly in place. For example, on steel, aluminum, and copper; Section 301 tariffs on certain Chinese-origin goods; and new of 10% to 15% on most imports still apply and will continue to shape effective duty rates and supply chain costs.

So, which entities can actually get their money back?

Legally, CBP will send refunds only to the importer of record, and only electronically through the government鈥檚 digital import/export system, known as the Automated Commercial Environment (ACE) system. That means every potential claimant needs an with current bank information on file. And creating an account or updating it can be a lengthy process, especially inside a large organization.

If a business was not the importer of record but had tariffs contractually passed through to it 鈥� for example, by explicit tariff clauses, amended purchase orders, or separate line items on invoices 鈥� they may still have a commercial basis to recover their share from the importer. In practice, that means corporate tax teams should sit down with both the organization鈥檚 procurement experts and its largest suppliers to identify tariff鈥憇haring arrangements and understand what actions those importers are planning to take.

Why liquidation suddenly matters to tax leaders

As said, the Atmus ruling is limited to entries that are not final, which hinges on the . CBP typically has one year to review an entry and liquidate it (often around 314 days for formal entries) with some informal entries liquidating much sooner.

Once an entry liquidates, the 180鈥慸ay protest clock starts. Within that window, the importer of record can challenge CBP鈥檚 decision, and those protested entries may remain in play for IEEPA refunds. There is also a 90鈥慸ay window in which CBP can reliquidate on its own initiative, raising questions about whether final should be read as 90 days or 180 days 鈥� clearly, an issue that will matter a lot if your company is near those deadlines.

Data, controversy risk & financial reporting

The role of in-house tax departments in the process of getting refunds requires, for starters, giving departments access to entry鈥憀evel data showing which imports bore IEEPA tariffs between February 1, 2025, and February 28, 2026. If a business does not already have robust trade reporting, the first step is to confirm whether the business has made payments to CBP; and, if so, to work with the company鈥檚 supply chain or trade compliance teams to access ACE and run detailed entry reports for that period.

Summary entries and heavily aggregated data will be a challenge because CBP has indicated that refund claims will require a declaration in the ACE system that lists specific entries and associated IEEPA duties. Expect controversy pressure: As claims scale up, CBP resources and the courts could see backlogs. If that becomes the case, tax teams should be prepared for protests, documentation requests, and potential litigation over entitlement and timing.

On the financial reporting side, whether and when to recognize a refund depends on the strength of the legal claim and the status of the proceedings. If tariffs were listed as expenses as they were incurred, successful refunds may give rise to income recognition. In cases in which tariffs were capitalized into fixed assets, however, the accounting analysis becomes more nuanced and may implicate asset basis, depreciation, and potentially transfer pricing positions.

Coordination between an organization鈥檚 financial reporting, tax accounting, and transfer pricing specialists is critical in order that customs values, income tax treatment, and any refund鈥憆elated credits remain consistent.

Action items for corporate tax departments

Corporate tax teams do not need to become customs experts overnight, but they do need to lead a coordinated response. Practically, that means they should:

• • • confirm whether their company was an importer of record and, if so, ensure ACE access and banking information are in place now, not after CBP turns the refund system on.
    • map which entries included IEEPA tariffs, identify which are non鈥憀iquidated or still within the 180鈥慸ay protest window, and file protests where appropriate to protect the company鈥檚 rights.
    • inventory all tariff鈥憇haring arrangements with suppliers, assess contractual entitlement to pass鈥憈hrough refunds, and align with procurement and legal teams on a consistent recovery approach.
    • work with accounting to determine the financial statement treatment of potential refunds, including whether and when to recognize contingent assets or income and any knock鈥憃n effects for transfer pricing and valuation.

If tax departments wait for complete certainty from the courts before acting, many entries may go final and fall out of scope. The opportunity for tariff refunds will favor companies that are data鈥憆eady, cross鈥慺unctionally aligned, and willing to move under time pressure.

You can find out more about the changing tariff situation here

• • • Changing the balance of taxes 鈥� Budget鈥慸riven tax swaps and incentive reforms are changing the balance between income, property, and sales taxes, forcing large companies to revisit their multistate footprint.

    • How revenue is sourced is changing, too 鈥� Rapidly evolving digital and AI鈥憆elated taxes are creating new nexus, sourcing, and base鈥慸efinition issues for businesses that rely on revenue from digital advertising, social platforms, data monetization, and automated tools.

    • Planning amid continued uncertainty 鈥� New federal tax regulations, tariff鈥憆elated uncertainty, and even the elimination of the penny are all amplifying state鈥慴y鈥憇tate complexity for in鈥慼ouse tax departments.

WASHINGTON, DC 鈥� Tax industry experts who gathered at to provide updates on the current landscape of state and local tax (SALT) policy and offer insight that corporate tax departments should consider found, not surprisingly, that they had a lot to talk about in the current economic environment.

Mapping the new SALT frontier

For starters, this year鈥檚 SALT agenda is not just an abstract policy story for large, multistate businesses, rather, it鈥檚 a direct driver of cash taxes, effective tax rate (ETR) volatility, and audit exposure. Indeed, several state legislatures are advancing new taxes on digital advertising and data, revisiting incentives and data center exemptions, and using conformity to federal law 鈥� especially the tax provisions in the One Big Beautiful Bill Act (OBBBA) 鈥� as a policy lever, all against the backdrop of slowing revenues and contentious elections.

鈥淭ax swaps鈥� and incentives 鈥� States that are facing budget pressure are, unsurprisingly, looking at tax swaps to reduce income or property taxes while broadening the sales & use tax base and trimming exemptions. For example, on March 3, the state of Florida 鈥� which already doesn鈥檛 have a state income tax 鈥� passed legislation that in the state.

Moreover, with the rapid expansion of AI come the extensive need for data centers. Several states are reassessing data center exemptions and credits, either tightening qualification standards, requiring centers to supply more of their own power, or repealing incentives outright. A decision in Virginia to , for example, is viewed as a potential template for other states, particularly in those areas in which energy and environmental concerns are priorities. At the same time, proposals targeting include expanded corporate tax disclosures, CEO compensation surcharges, and enhanced reporting on apportionment and group filing methods.

What companies should consider 鈥� Large companies operating over multiple states should consider making an inventory of their credits and incentives by jurisdiction, including looking at sunset dates and political risk indicators.

Companies should also build forward鈥憀ooking models that show how any sales tax base expansion would interact with their supply chain and their procurement of digital and professional services.

New exposure for tech, marketing & data

Bipartisan legislators in several states are continuing to expand on digital economies as a revenue and policy target. For example, Maryland continues to lead with its digital advertising tax; while Washington state鈥檚 expansion of its sales tax to include certain digital and IT services and Chicago鈥檚 social media taxes illustrate the variety of approaches that state and local jurisdictions are exploring to expand their tax base and raise revenue.

Data and 鈥渄igital resource鈥� taxes 鈥� Proposals in states such as New York would tax companies that derive income from resident data, treating data as a natural resource. While no state has fully implemented a comprehensive data tax, however, large platforms and data鈥慸riven enterprises are monitoring these bills closely.

AI鈥憆elated SALT rules 鈥� Many states still classify AI solutions under existing Software as a Service (SaaS) or data鈥憄rocessing categories, but some 鈥� including New York 鈥� are exploring surcharges tied to AI鈥慸riven workforce reductions. And at least two states are explicitly taxing AI, similarly to the way software is taxed.

For corporate tax leaders, some practical next steps should include mapping those areas in which your group has digital ad spending, user bases, data monetization, or AI deployments. Then, overlaying that with current and pending digital tax proposals. In parallel, it is increasingly critical for the tax team to partner with IT and marketing teams to understand how contracts, invoicing structures, and platform design will affect nexus, tax base definition, and sourcing.

Federal shifts magnify multistate complexity

The OBBBA made permanent several of , while expanding SALT relief on the individual side and creating new interactions for multinational groups. Because most states start from federal taxable income 鈥� either on a rolling, static, or selective conformity basis 鈥� OBBBA changes reverberate across state corporate income tax bases, especially in those states that have decoupled themselves from interest limits, R&D expensing, or new production鈥憆elated incentives.

Corporate tax departments must now juggle different conformity dates and selective decoupling rules across rolling and static states, including jurisdictions that automatically decouple when a federal change exceeds a revenue impact threshold. This requires more granular state鈥慴y鈥憇tate modeling of OBBBA impacts on apportionable income, deferred tax balances, and cash tax forecasts. It also heightens the risk that political disputes 鈥� such as 鈥� produce mid鈥慶ycle changes that complicate provision and compliance processes.

Penny elimination 鈥� With federal , states now are moving toward symmetrical rounding for cash transactions, rounding the final tax鈥慽nclusive total to the nearest five cents while attempting not to alter the underlying tax computation. For retailers and consumer鈥慺acing enterprises, this shifts the focus to point of sale (POS) configuration, consumer鈥憄rotection exposure, and class鈥慳ction risk if rounding is implemented incorrectly.

Tariffs and refunds 鈥� The U.S. Supreme Court鈥檚 Learning Resources, Inc. v. Trump decision under the International Emergency Economic Powers Act in February leaves open how more than $100 billion in and what that means for prior sales & use tax treatment. Streamlined guidance generally treats tariffs embedded in product prices as part of the taxable sales price but excludes tariffs paid directly by a consumer鈥慽mporter from the tax base, raising complex questions if tariff refunds reduce costs or sales prices retroactively.

For indirect tax department teams, the confluency of the 2026 SALT changes 鈥� including the impacts around everything from data center credits to the recent Supreme Court tariff decision 鈥� the need to rely on internal partners across the business has never been stronger. Combining that with a greater reliance on technologies, including dedicated research tools to stay abreast of state-by-state tax changes, may be the best way for corporate tax teams to keep up with compliance requirements and avoid penalties.

You can download a full copy of here

Key takeaways:

• • • The supply hit is real, not just priced-in fear 鈥� Tanker insurance has collapsed, infrastructure is damaged, and volumes are physically offline. Some of this isn’t coming back quickly.

    • Tax policy is moving in five directions at once 鈥� Energy security incentives, BEPS 2.0 rollout, windfall tax rumblings 鈥� governments are improvising, and your effective tax rate is caught in the middle.

    • Your Evidence to Recommendations (EtR) guidance is probably already stale 鈥� If you haven’t stress-tested your EtR guidance against $100-plus per barrel oil and a multi-quarter disruption, you’re behind.

Let’s be direct: This isn’t a risky premium situation. When military strikes take out Middle Eastern infrastructure in the Persian Gulf and tanker insurers pull out of a corridor carrying 15% to 20% of global crude and liquefied natural gas (LNG), supply goes offline. That’s what’s happened.

At the time of writing, the price of oil continues to fluctuate. The recent release of the , which forecasts and analyze the global oil market, shows that more global markets are starting to say the word recession. And whether or not a recession actually materializes, the energy price environment has shifted in ways that will take multiple quarters, and maybe years, to unwind. For corporate tax departments, the question isn’t whether this changes their planning, it’s whether they’ve caught up yet.

Which scenario-modeling is most worth it?

Most ominously, nobody knows how this all ends, and that’s exactly why your tax team may need more than one base case.

The optimistic read is a short, sharp shock 鈥� prices spike, some flows resume, upstream books a windfall quarter, and consuming-country governments start muttering about excess profits taxes. Messy, but manageable.

The harder scenario is prolonged disruption: Hormuz remains constrained for months, along with repeated infrastructure hits with resulting rerouting that permanently shifts where profits land and which entities suddenly have a taxable presence for which they didn’t plan. Not surprisingly, transfer pricing and permanent聽establishment聽(PE) exposure get complicated fast.

Add to the mix, by the Organisation for Economic Co-operation and Development (OECD) that multinational corporate tax departments are still required to adhere to and now plan for how it may interact and intersect with the other two scenarios.

The policy environment is a mess, but in a very specific way

Here’s what makes this cycle different from 2008 or 2014: Governments are pulling in opposite directions simultaneously. The United States has pivoted hard toward energy dominance 鈥� domestic fossils, nuclear, extraction incentives. Meanwhile, BEPS 2.0 is still rolling out unevenly across jurisdictions, which means your organization鈥檚 effective tax rate in any given country depends heavily on where it sits in the implementation timeline.

Throw in 鈥� which historically shows up about six months after prices stay high and voters get angry 鈥� and you have an environment in which the gap between your statutory tax rate and your actual sustainable rate could widen fast if you’re not actively managing it.

5 actions tax team leaders can take now

Of course, none of these are new concepts; but in a fast-moving situation, the basics that get done quickly will beat the sophisticated that gets done late.

First, rebuild your EtR guidance around at least three commodity paths. Not as a theoretical exercise 鈥� as something your CFO can actually present to the board with a straight face.

Second, map out which legal entities are genuinely exposed to Hormuz-dependent flow volumes. Companies鈥� operations and trading teams often know this; but the tax team too often doesn’t until there’s a problem. Close that knowledge gap now.

Third, re-rank your project pipeline on a real after-tax basis. Updated incentive assumptions, global minimum tax, domestic versus cross-border production 鈥� run all the numbers again. Some projects that looked marginal six months ago may look very different now, and vice versa.

Fourth, build a windfall tax playbook before you need one. The data you’d need to defend your profit levels and capital allocation decisions takes time to pull together. Don’t leave that work until the week the legislation drops.

Fifth 鈥� and this is the one that gets skipped most often 鈥� make sure the company鈥檚 tax, treasury, and trading groups are talking to each other in real time. Hedging decisions, financing structures, physical flow changes 鈥� all of these have tax consequences, and they’re happening fast right now.

One final thought

Corporate tax departments that come out of this looking good won’t be the ones that predicted the conflict. They’ll be the ones who translated what鈥檚 happened into specific, actionable data and numbers for their leadership 鈥� presented quickly, clearly, and with their own company’s footprint in mind.

That’s the brief. Now go build it.

You can find more of our coverage of the impact of the ongoing War in Iran here

Key insights:

• • • Possibilities vs. practicality 鈥� There is a growing frustration gap between what corporate tax professionals want to achieve and what their current technological tools will allow.

    • Expectations about AI 鈥� Tax professionals have significantly accelerated the timeframe in which they expect AI to become a central part of their workflow.

    • Proactive progress 鈥� Automation is enabling a gradual shift toward more strategic, proactive tax work, although not as quickly as many tax professionals would like.

The recently released , from the 成人VR视频 Institute and Tax Executives Institute, reveals that while automation of routine tax functions is indeed enabling a long-desired shift toward more strategic, proactive tax work in some corporate tax departments, a majority of tax leaders surveyed say upgrading their department鈥檚 tax technology is still a relatively low priority at their company.

Jump to 鈫�

2026 Corporate Tax Department Technology Report

The report surveyed 170 tax leaders from companies of all sizes to find out how corporate tax professionals are using technology, overcoming obstacles, and planning for the future.

A growing 鈥渇rustration gap鈥�

In general, the report found that while many companies (especially larger ones) are actively upgrading their tax department鈥檚 technological capabilities, there is a growing frustration gap between what tax professionals know they can accomplish with more robust technologies and what their current tools allow them to do.

Adding to this frustration is a growing discrepancy between the additional budget and resources tax departments hope to get each year and the harsher reality they often face. Indeed, even though tax leaders remain optimistic that their budgets and capabilities will expand and improve in the coming years, fewer than half of the respondents surveyed said their departments received a budget increase last year, and many saw budget cuts.

Further, the report shows that the prospect of incorporating ever more sophisticated forms of AI and AI-driven tools into tax workflows is also very much on the minds of tax professionals. Even though the actual usage of AI in corporate tax departments is still relatively low, the report reveals that tax professionals now expect AI become a central part of their workflow within one to two years, much faster than they did in last year鈥檚 report.

Indeed, as the report explains, this expectation of more imminent AI adoption represents a significant shift in attitude, because most corporate tax departments are rather circumspect about how, when, and why they incorporate new tech tools into their established routines.

If today鈥檚 technological capabilities continue to accelerate, companies that have been slow to invest in the infrastructure necessary to keep pace may soon find themselves struggling to catch up with their more tech-savvy counterparts, the report warns.

Moving toward more proactive work, albeit slowly

For companies that have invested in the technological infrastructure necessary to support advanced tax technologies, the payoff is becoming increasingly evident.

According to the report, about two-thirds (67%) of tax professionals surveyed said their company鈥檚 investment in technology had enabled a shift toward more proactive tax work within their departments. This shift is particularly noticeable at large corporations, at which, unsurprisingly, investment in tax technology has been more generous.

The 2026 Corporate Tax Department Technology Report also explores other aspects of corporate tax departments, including their hiring practices, tech training, purchasing strategies, what they see as the most popular tech tools for tax, and numerous other factors that affect how tax departments operate.

You can download

a full copy of the 成人VR视频 Institute’s here

Key takeaways:

• • • Tax departments lack resources and confidence 鈥� More than half (58%) of tax departments are under-resourced, and 59% are not confident that they can upgrade their tax technology over the next two years.

    • Under-resourced departments incur more penalties 鈥� At least half of respondents from under-resourced tax departments say their departments incurred penalties over the past year, compared to only about one-third of those from properly resourced departments.

    • Making the shift to proactive planning and value creation 鈥� For many tax departments, the winning model blends in-house expertise, targeted external support, and a coherent tech/AI stack that allows teams to shift from tactical compliance to proactive planning and strategic value creation.

Under-resourced corporate tax departments spend more of their budget on external support compared to well-resourced teams 鈥� yet they’re more likely to incur penalties and less confident in forecasting, according to the 成人VR视频 Institute鈥檚 .

Given this, the problem isn’t a lack of spending 鈥� it’s the operating model. With respondents from 58% of tax departments saying they are under-resourced, 59% saying they lack the confidence needed to upgrade their existing tax technology over the next two years, and most spending more than half their time on reactive compliance work when they’d prefer to focus on strategic planning, clearly the gap between ambition and reality has never been wider.

The answer isn’t working harder or throwing more money at consultants, however. It’s building a hybrid ecosystem of people, platforms, and partners designed to shift capacity from firefighting to foresight.

The Groundhog Day problem

Every year feels the same: New tax legislation (such as the One Big Beautiful Bill Act or Pillar 2), new compliance burdens, new geopolitical uncertainty 鈥� coupled with the same old constraints. Too much work, not enough time, and technology that lags.

When deadlines hit, under-resourced teams rely on two blunt levers: overtime and reactive outsourcing. Internal staff end up working longer hours, and external providers plug the gaps at short notice. This model is breaking departments and it鈥檚 breaking down itself.

Under-resourced departments are significantly more likely to incur penalties, with 50% of respondents saying their under-resourced department had been penalized in the past year, compared to just 34% of respondents from well-resourced departments that say that, according to the report.

Further, under-resourced department respondents said they were less confident in their ability to forecast accurately, with just 26% saying their ability to forecast accurately was “very likely” compared to 43% of well-resourced department respondents. Ironically, under-resourced departments also spend more on external support as a percentage of budget (44%) compared to 37% for well-resourced departments. Clearly, spending more doesn’t solve structural problems 鈥� it often masks them.

Meanwhile, tax professionals report spending more than half their time on tactical or reactive work, even though they would prefer to spend up to two-thirds of their time on strategic analysis. Not surprisingly, when the team is locked into manual reconciliations and last-minute fixes, it’s nearly impossible to influence business decisions or shape strategy.

Why 鈥渁ll in-house鈥� or “all outsourced” no longer works

When more work is moved onto the plates of the internal tax team, all in-house can often come to mean all heroics 鈥� talented people drowning in compliance volume with no time to use the analytical tools already on their desks. Conversely, all outsourced risks hollowing out the department鈥檚 institutional knowledge and weakening its seat at the table.

A hybrid model asks better questions: What kind of work is this, and where does it create the most leverage? These questions can be used to determine where and to whom work should go. For example, high-volume, rule-based, recurring tasks are prime candidates for automation, shared services, or managed services under strong tax oversight; while complex, judgment-heavy, strategically sensitive work should remain anchored in-house, with external advisors extending capacity and offering specialized insight.

Thus, the best model for a modern corporate tax department is a hybrid ecosystem 鈥� not a fixed organizations chart, but a deliberate blend of internal expertise, enabling technology, and external capability partners.

Four layers of the hybrid ecosystem

This hybrid ecosystem can be delineated into four layers, each bringing their own insight and value:

1. 1. 1. People and roles redesigned 鈥� High-performing tax functions invest in analyst and tax-tech roles that connect tax to enterprise resource planning (ERP) systems, data hubs, and analytics, thus freeing technical experts from manual data work. Senior professionals then become embedded advisors to finance, treasury, and the business, not just compliance reviewers.
      2. Processes segmented into “run” and “change” 鈥� The biggest barriers to strategic work are excessive volume, heavy compliance burdens, limited resources, and time pressure. Modern tax departments respond by explicitly segmenting work in which run the business processes are documented, standardized, and increasingly automated or pushed into shared or managed service models. Change the business work remains tightly linked to senior tax staff.
      3. Technology becomes the data spine 鈥� More than half of respondents say they expect above-normal increases in their tax technology budgets, and more than half say their main resourcing strategy is introducing more automation. The goal isn’t collecting point solutions; rather, it’s building a coherent data spine that includes ERP integration, tax-specific data models, consistent workflow tooling, and strategic platforms that flex as regulations shift.
      4. AI act as an accelerator 鈥� Two-thirds of tax departments aren’t yet using generative AI (GenAI), according to the report. And among the one-third that are, usage clusters around research, document summarization, drafting, and some analytical support. The next step up the AI chain is for departments to move from individual experiments to standardized, governed workflows that scan legislation, prepare first drafts of memos, or interrogate large data sets for anomalies.

What high-performing hybrid tax departments do next

Departments that feel well-resourced, allocate more time for their professionals to conduct proactive work, and invest deliberately in technology and skills are significantly more confident in their ability to forecast accurately, avoid penalties, and minimize tax liabilities, the report shows.

Indeed, these high-performing hybrid tax departments:

• • • invest ahead of crises in people, tech, and processes
    • treat external providers as capability partners, not emergency relief
    • actively protect time for strategic work by automating or outsourcing routine tasks
    • insist on a durable seat at the strategy table, not just one for compliance reporting
    • experiment with automation and AI in focused, repeatable use cases

It is worth noting that smaller companies (those under $50 million in annual revenue) and the largest one (those with more than $5 billion in revenue) are leading the way by securing leadership buy-in early and leveraging specialized external expertise rather than trying to build everything in-house. Midsize companies, by contrast, are more likely to rely on in-house teams to lead automation efforts and less likely to use third-party vendors 鈥� a cautious approach that risks having them fall too far behind to catch up.

The message: Design the ecosystem, don’t just work harder

For corporate tax professionals, the message may be harsh but hopeful: You cannot work your way out of structural constraints by effort alone. Rather, a well-designed hybrid ecosystem can turn those constraints into a catalyst that will allow the department to deliver more value to the business. In fact, the modern corporate tax department is hybrid by necessity; but the question is whether it’s hybrid by design 鈥� or just by accident.

You can learn more about the challenges facing modern corporate tax departments here

Key takeaways:

• • • Data is your foundation, not AI 鈥� Before investing in AI tools, corporate tax departments are finding they need to centralize and automate their data across multiple ERP systems because clean, accessible data often determines whether technology implementations succeed or create additional problems.

    • Compliance is becoming commoditized 鈥� Specialization creates differentiation, and tax firms are discovering they can no longer differentiate themselves through basic compliance work that technology can complete in seconds. That means that successful practices are going deep into emerging fields like crypto, providing strategic insights that generic practices can’t match.

    • Learning to tell the story behind the numbers 鈥� A valuable skill for in-house tax professionals is becoming data fluent enough to analyze outputs and communicate tax implications to non-tax stakeholders. This ability to translate complexity into actionable business advice can transform your tax department from a cost center into a strategic partner.

If you’re spending most of your week on manual data entry and routine compliance work, you’ve likely noticed the ground shifting beneath the tax, audit & accounting profession. The work that defines value in tax is changing and has been for a while, and now more and more tax professionals are grappling with what that means for their careers.

What’s becoming clear for both corporate tax departments and tax firms is that 2026 represents a pivotal year 鈥� not because of arbitrary deadlines, but because the gap between traditional approaches and emerging practices is widening.

The corporate tax department: From compliance factory to strategic engine

For those in corporate tax departments, strategic work is increasingly becoming non-optional. Supply chain decisions, tariff implications, global compliance complexity 鈥� these are landing on the desks of in-house tax team members as core responsibilities rather than occasional advisory projects.

What’s emerging in leading tax departments? Three patterns: intelligence, automation, and agility.

The data challenge comes first 鈥� Many departments are discovering that before implementing AI strategies or automation roadmaps, they need to address their data infrastructure. Data often lives across multiple enterprise resource planning (ERP) systems, requires manual transfers between systems, and needs hours of reconciliation before it’s usable.

This foundational issue frequently determines whether technology implementations succeed or fail. Data dictates what’s possible with any technology, especially AI. For most organizations, it remains a vulnerability despite being a critical component of modern tax departments.

Supply chain decisions, tariff implications, global compliance complexity 鈥� these are landing on the desks of in-house tax team members as core responsibilities rather than occasional advisory projects.

Getting data centralized, automated, and accessible 鈥� and ideally aligned with the broader corporate finance department 鈥� may not make for exciting presentations to leadership, but it’s often the difference between technology that transforms a department and technology that creates additional work.

Technology decisions benefit from intentionality 鈥� AI is being marketed as a universal solution, but experienced professionals are finding it works best when applied to clearly defined problems. Before purchasing another platform or piloting another tool, successful tax departments are asking what they’re actually trying to accomplish with the technology. Which processes should be automated first? Does AI make sense for this particular challenge?

Productive conversations with organizations鈥� IT departments, understanding current technology stack capabilities, and mapping problems before seeking solutions 鈥� these approaches tend to matter more than the sophistication of the acquired tools themselves.

Certain skills are becoming increasingly valuable 鈥� You don’t necessarily need to become a data scientist, but technological and AI fluency is proving to be an essential skill. Think of it as learning another language 鈥� you need enough of a command of it to communicate effectively and understand what you’re looking at.

The ability to analyze data outputs, spot patterns, and tell the story of what the data means is separating strategic tax professionals from those who are focused primarily on compliance. Being able to communicate tax information to non-tax professionals and then translate complex implications into actionable business advice will position you and your department as a strategic partner rather than a cost center.

As the complexity of tax regulations continues to expand, both globally and locally, many in-house tax departments are finding they need to automate routine work and leverage technology not just for compliance, but to predict outcomes and advise the business strategically.

The tax firm: When compliance becomes commoditized

For tax and accounting firms, the current tech-driven shift is particularly urgent. Compliance work is becoming more and more commoditized, and technology can now complete basic compliance in seconds. Indeed, some financial institutions are offering it for free to attract clients.

Tax professionals still spend roughly 60% of their time on manual, repetitive work, but this model is under pressure. Regulatory authorities are using technology to demand information faster, and clients expect more. Further, competition is intensifying from private equity-backed firms, mergers, and tech-enabled competitors who can deliver compliance work at significantly lower costs.

Several factors that weren’t present before 鈥� such as PE investment, consolidation, technology democratization, and more 鈥� are creating unprecedented competitive pressure and fundamentally changing what distinguishes one tax firm from another.

Automation is becoming table stakes 鈥� Successful tax firms are systematizing and automating compliance work and developing customer relationship management (CRM) strategies for managing client data. This isn’t about eliminating jobs; rather, it’s about eliminating tasks. As mentioned, regulatory authorities are already demanding information faster using their own technology, and firms are finding they need to keep pace.

Several factors that weren’t present before 鈥� such as PE investment, consolidation, technology democratization, and more 鈥� are creating unprecedented competitive pressure and fundamentally changing what distinguishes one tax firm from another.

Specialization is creating differentiation, and as a result, the general tax, audit & accounting practice model is facing challenges. Clients increasingly need professionals who know their industry deeply, understand their specific challenges, and can provide insights beyond generic compliance work.

This often means making choices about where to develop deep expertise. Which industries will you focus on? What emerging areas would be best in which to position yourself? And the growing complexity and expansion of tax regulations actually creates opportunities for professionals who can think strategically about emerging fields.

Cryptocurrency is one example. Cross-border commerce, specific regulatory niches, particular industry verticals 鈥� these are areas in which specialization can create meaningful differentiation for a firm.

The advisor relationship looks different 鈥� Providing value in the tax profession is shifting away from form completion and to analyzing client data and providing deep, insightful guidance. This requires a different kind of client relationship 鈥� one that goes deeper into their operations, understands their business intimately, and positions yourself as a partner in decision-making rather than a vendor handling annual filings.

Again, you don’t need to know how to code but being able to analyze client data points and translate them into strategic insights is proving increasingly valuable.

The bottom line: 2026 is a pivotal year

The tax profession 鈥� on both the corporate and the outside firm sides 鈥� appears to be splitting. Some professionals are automating routine work, developing deep expertise, and positioning themselves as strategic advisors. Others are continuing with manual work and hoping that technology can increasingly make them better and faster.

For many, 2026 is about specialization and using technology to enable it. Yet, it’s also about reflection: If you’re no longer firm or in-house function is no longer primarily a compliance machine, what distinguishes them when compliance becomes commoditized?

Further, the complexity of tax regulations is expanding, and this complexity creates demand for expertise. The professionals and firms that can navigate that complexity, provide genuine insights, and communicate clearly may find themselves more valuable than ever.

This shift is already underway. Many professionals are asking themselves whether they’re positioning themselves for where the profession is heading and how they can best offer their strategic expertise to create value for their clients or organizations.

You can download a full copy of the 2025 State of Tax Professionals Report from the 成人VR视频 Institute here

Key takeaways:

• • • Technology investment drives PE interest 鈥� Private equity firms provide patient capital for multimillion-dollar technology transformations that traditional partnerships struggle to fund.

    • Strategic focus over expansion 鈥� PE-backed firms are shifting from growth through breadth to growth through depth, eliminating underperforming service lines to concentrate resources on areas where they can win.

    • Competitive pressure is mounting 鈥� While most firms remain uninterested in PE transactions, well-capitalized competitors are pulling ahead in technology capabilities, talent attraction, and market positioning.

A competing accounting firm down the street just acquired its fifth firm this year. Another launched an AI-powered tax platform that can deliver work in hours instead of weeks. And a third is recruiting top talent with equity packages your partnership structure can’t match.

What do they have in common? Private equity backing.

Four years ago, when EisnerAmper announced its deal with TowerBrook Capital Partners 鈥� one of the earliest and largest forays of PE money into the tax, audit & accounting industry 鈥� most practitioners dismissed it as an anomaly. Today, roughly half of the top 25 accounting firms have completed or are pursuing PE transactions. This isn’t a trend 鈥� it’s a fundamental restructuring of the profession.

Why traditional partnerships are losing ground

Consider Citrin Cooperman after New Mountain Capital made its investment in 2021. In four years, Citrin Cooperman has acquired more than 20 accounting firms, expanding to 2,800 professionals across 27 offices. That’s strategic acceleration, not organic growth.

Traditional accounting firm partnerships face a structural problem 鈥� they can’t easily fund multimillion-dollar infrastructure buildouts. When firms need enterprise relationship intelligence systems, unified data architectures, or AI-enabled delivery models, where does the capital for these initiatives come from? Partner contributions? Bank loans? Retained earnings that take years to build up?

PE-backed competitors can deploy patient capital 鈥攎oney designed for long-term technology transformation without immediate return pressure. And the gap between what PE-backed firms can do compared to traditional partnerships is widening.

For example, here’s the efficiency paradox: Partners billing at $500 per hour spend significant time on work that should be automated at a $50-per-hour equivalent cost.

That’s not a cost problem 鈥� it’s a revenue capacity problem.

PE-backed firms liberate high-value talent, so they are then free to pursue high-value work. When automation and AI-driven tools handle the more routine tasks, partners can focus on complex client challenges, strategic advisory, and relationship building.

The strategy shift: Depth over breadth

The most counterintuitive transformation PE brings is the shift in strategic focus. Traditional firms pursue growth through breadth by launching practice areas because clients asked for them or competitors offer them. The result? A dozen service lines, with about half of them underperforming.

Instead, PE firms ask one simple question: Where does your firm have a right to win?

This PE-backed strategy eliminates hobby businesses 鈥� those practice areas that exist because they always have, not because they generate competitive returns. Instead, PE-backed firms concentrate their resources on fewer service lines, focusing on those at which firms genuinely excel. Thus, PE-backed firms are reducing service line breadth while firms鈥� depth and increasing profitability and market share as well.

Private equity firms鈥� interest and investment in the tax, audit & accounting industry isn鈥檛 by happenstance. PE firms have done their due diligence to understand the industry 鈥� and not just from firms鈥� perspective, but from that of their clients too.

PE-backed firms liberate high-value tax talent, so they are then free to pursue high-value work, leaving automation and AI-driven tools to handle the more routine tasks.

Private equity firms have spent millions of dollars studying the accounting industry, not only tax firms including firms鈥� clients, and analyzing competitors. The information they鈥檝e gathered represents a cultural shift that has been taking place 鈥� something that many firms themselves hadn鈥檛 noticed. This shift, from relationship-driven but assumption-based service models to data-informed decision making, has helped PE-backed firms know which services clients value, which delivery models they prefer, and for which services they’ll pay premium rates. That intelligence has become competitive advantage.

Further, PE-backed firms can offer equity incentives to next-generation leaders, which is something traditional partnerships struggle to match. PE-backed firms can provide clear career paths, sophisticated training, and professional development resources. As traditional firms ask young partners to buy in at barely affordable valuations, with unclear leadership paths and outdated technology, PE-backed firms are building employer brands that appeal to professionals who want cutting-edge technology and transparent advancement.

It鈥檚 not surprising which firm attracts the best talent.

The skepticism is real 鈥� and justified

Despite these benefits, the accounting profession remains skeptical. More than half of industry practitioners say PE isn’t on their radar, and another third aren’t interested, according to the recent Tax Firm Growth Report 2025 from the 成人VR视频 Institute.

Their concerns are legitimate. Two-thirds say they believe PE investment will negatively impact firm integrity and independence, according to the report. And these skeptical practitioners say they worry about culture, client relationships, and an emphasis on earnings over service quality.

Clearly, PE ownership does add complexity to auditor independence, regulatory compliance, and risk management. But PE firms are exceptionally risk-averse when investing in professional services, and the last thing they want is bad press or audit scandals. In fact, their risk management frameworks are often more sophisticated than traditional partnerships maintain.

Yet, for accounting firms seeking growth but determined to stay independent, PE partnership isn’t the only path. Employee Stock Ownership Plans (ESOPs) offer tax advantages and an employee ownership structure while maintaining independence. Firms like BDO and Grassi successfully implemented ESOPs to better provide liquidity while keeping control localized. Other alternatives include traditional financing, mergers between equals, minority capital deals, and targeted asset sales. Each has advantages and limitations.

The key insight: All alternatives require deliberate strategic action; and none involve maintaining the status quo or standing still.

The coming crossroads

The accounting profession continues to be at junction, and all firms will have to decide on their next move. PE-backed competitors are pulling ahead in technology utilization, market positioning, and talent acquisition. The opportunity window for firms to respond isn’t infinite.

Firms that delay action risk entering merger agreements or partnerships from weakened positions. Worse, they risk becoming acquisition targets, joining PE-backed platforms on terms dictated by necessity rather than choice.

Winners won’t be determined by capital structure alone, of course 鈥� they’ll be determined by execution speed and strategic clarity. However, PE investment can be a critical enabler in an industry facing unprecedented technological disruption and competitive pressure.

The fundamental question isn’t whether to embrace private equity; rather, it’s whether your firm can achieve necessary transformation speed and scale without it. Every firm leader must answer honestly, urgently, and with clear-eyed assessment of their competitive position and their competitors’ accelerating capabilities.

The profession has changed, and accounting firms have to decide whether they鈥檒l be changing with it, or whether they鈥檒l be changed by it.

For more on the impact of private equity in the tax, audit & accounting industry, you can access the recent Tax Firm Growth Report 2025 from the 成人VR视频 Institute here