TEI Roundtable No. 30: Tax and Tax' Technology; Meeting customer needs - now and in the future.

• Position: Tax Executives Institute - Discussion

If you're a tax professional, you know the significance of tax technology. It's just as important as tax regulations, tax transactions, or any other aspect of the field. That's why the theme of this issue is tax technology, why we established Tax Technology Corner as a regular column in this magazine, why we chose tax technology for a roundtable discussion at the virtual midyear meeting, and why we're providing an edited transcript of the roundtable discussion in this issue. That discussion included a slide presentation and polling of attendees on various tax technology issues. The session, moderated by Sandhya Edupuganty, tax compliance and technology director at Texas Instruments, included these tax technology experts: Michael Bernard, chief tax officer--transaction tax, at Vertex Inc; Brian Billett, senior director at CSC Corptax; and Chris Carlstead, head of strategic accounts and of partnerships and alliances at Thomson Reuters.

Sandhya Edupuganty: One thing I want to call out is with regard to what has happened over the last several months from a disruption perspective. COVID-19 is here, it appears it's not going away anytime soon, so I think we need to understand and incorporate the perspective that it gives us. How has it disrupted our business? How has it affected our ability to do our jobs as tax professionals? Gentlemen, I invite each of you to give your perspectives at a high level, and I know we will, throughout the session, speak to "OK, this is a disruption, and this might be a major pandemic-type disruption, but we have faced disruption as tax professionals throughout our careers, and it usually comes from business or the government." But let's talk about what COVID-19 has done to us from a tax technology perspective. Mike, would you like to take the lead on that?

Michael Bernard: Sure. So, Sandhya, there's probably two things I'd want to say. First of all, a lot of the professionals on the call have been working from home the past several months. Prior to the pandemic, only about four percent of the information workers in the US worked from home, and obviously that percentage is substantially higher today. Because tax professionals are "information workers," a substantial portion will likely be working from home for the next several months. The question is, Is this the new norm? I think it will be. In talking to customers, a solid one-third of them say they are more productive working from home and like the fact they do not have to commute. Tax leaders will be making decisions as to how to structure their teams in the future around working in the office and working from home. Many leaders have a tax team around the world, so they are already skilled in managing a widely distributed team. Other leaders will need to gain that skill. I have managed a team that spans eight time zones, and communication is really the key to knowing what the team is working on and how to respond to the business' needs. From a technology standpoint, many of our customers that were set up as digital offices prior to the pandemic have fared well. These offices already had digital repositories of data, which were well networked, and efficient tools enabled them to remain productive. For those companies that have yet to make the transition to a digital distributed network, certainly challenges lie ahead. I would suggest that gaining insights as to how to transform your office to digital can be achieved by contacting colleagues in TEI. One other key point, on the tax policy side, [is that] the measures that the governments have taken around the world have been very expensive--both in terms of fiscal and monetary efforts. In the EU, it's been around nineteen percent of GDP which has been committed, and in the US about seventeen percent. That is a tremendous amount of spending, and there will have to be tax policy decisions made on a national, state, and local level to pay for all of this. This will create additional work for tax departments, because the tax base will likely be expanded and tax operations will need to expand, and, once you start asking companies to comply with new rules, that obviously touches their technology. So, the best thing I could advocate for is to be cognizant of these changes and keep IT and other finance leaders aware of how dynamic tax will continue to be moving forward--particularly these next several years.

Edupuganry: Thank you. Brian, what would you say? Brian Billett: I guess there's a couple quick things. If necessity is the mother of invention--or adversity, I guess, depending on how you look at the quote--I think tax people in my experience have always been very creative, and they find ways to do things and get things done. It's never a good thing, but I think there will be good things that come out of this. I think having to be able to adapt to the situation will lead to improvements from an overall perspective in process and technology. I think the tax departments in companies that have faced more challenges are better positioned. For others, it's probably an opportunity and time to look at your processes and technologies and where you can make improvements. I think business and operations will have changed forever. I mean, it will not be the same "normal" again, I think for the better in many ways, right? And I think that we need to look at that and how that extends to tax and how tax operations work throughout the entire organization, including with the businesses.

Edupuganty: Thank you. Chris, what are your thoughts?

Chris Carlstead: This is the downside to going last on a panel of seasoned folks. I would agree with what Brian and Mike have said. I guess I'd add maybe a personal side to it. There has probably never been an event--at least in my life or for a very long time--where we all are experiencing the same thing at the same time in very similar ways. Now, of course, depending on your family situation, your perspective on the matter may be different, but everyone having to stay at home, it's a unifying factor that is quite unique. I think we'll find in our professional lives that this will have a lasting impact. I think some of the elements that Brian and Mike brought up touch on that, and I think the way we work going forward will be different. Not that we're looking for more compelling events in our industry, because governments seem to hand them to us all the time, but COVID is yet another event that government is reacting to. It's going to lead to more regulation, it's going to lead to more complexity, and, quite frankly, it's going to accelerate the adoption and need for technology. So, I think that this discussion is as timely as it ever could have been. We are already seeing adaptation in supply chains and the way people look at how they manage their supply chains, where they're located, who they're working with, supplier reliability, know[ing] your customer, and elements of risk in those categories. In this environment, fraud is at the forefront of concerns for many companies and will be for the foreseeable future, especially, building on Mike's point, with all of the stimulus that's going into the global economy right now. So, I guess, hang on and stay safe. And hopefully we'll all be back in our offices soon enough.

Edupuganty: Thank you, gentlemen. Those are all very perceptive points to bring up and think through. OK, let's get to our first polling question: Did a tax or IT professional from your company attend the TEI tax and tax technology seminar either in February 2019 or February 2020? Your options are: "I or a team member attended the 2019 session"; option B is "I attended the 2020 session"; the third option is "I or a team member attended both years"; or, lastly, "No one from my company attended the TEI technology seminar." So, while we give everybody a few seconds to respond to this question, I know that, gentlemen, your companies or you individually did attend one or both of these seminars. What are your thoughts on some of the talking points or concepts that came about from these seminars?

Bernard: I would say probably I think the most valuable thing that happened the last two years was that, if you think about TEI, it's an organization that's been around for seventy-five years. And one of its premier attributes is that you build a valuable network through TEI. This event, I think, is very unique, because it helps to build a network for tax technologists, for people within the tax department, and for people who are IT people as well. I want to compliment, obviously, Chris and Brian as well for being there and sponsoring it. Vertex will continue to sponsor this event as we did for the first two. The professional service community [has] really supported this. It's a place where you can talk to experts from ERP systems to discrete technology tools. In my mind, besides the content that's delivered and the ideas which are exchanged, the corporate tax/IT and service provider communities are getting to know one another just as the tax and service provider communities have exchanged ideas for seventy-five years at TEI.

Carlstead: I'll just jump in and say that I think it's long overdue. Quite frankly, I'm really pleased that TEI went in this direction. I think it provides an incredible...