Website - Tax Flowchart
Often times, when a private company is asked any question relating to tax, they are uncertain as to what their response should be, for a larger public company, the situation might not be very different.¬† What they probably have in common is that they do not have dedicated tax personnel to answer the tax questions that arise for any corporation doing business.¬† What they both need, is a tax resource that is dedicated to answering their daily questions and pointing out a path for them that will help them avoid the potential tax related pitfalls that await every company actively doing business in the world.
For clients where we serve as their outsourced tax department, we discuss the enterprise's structure with the controller, vice president of finance, or chief financial officer as appropriate, so they understand the taxation of their business. As we work together, they will learn to anticipate the impact of their business decisions on their overall effective tax rate and to identify potential issues before they arise.
SOAProjects Tax team is designed to provide its clients with a full suite of tax services and the attention that they might only get with an in-house tax resource.¬† The bonus is that their tax resource also has a Big 4 tax education with extensive Technology experience, to place at their service.
The Silicon Valley is a very demanding environment for product and company development.¬† Most companies can‚Äôt afford to put money into any aspect of the business that is not taking them closer to product completion and a ready market.¬† At SOAProjects, we are well aware of this fact and are here to provide a high level of tax service, at a very reasonable price.
Federal Income Tax
- SOAProjects has a team of professionals with substantial Emerging Growth and public company experience, devoted to technology companies engaged in such areas as telecommunications, software, hardware and biotechnology.
- We professionally prepare annual Federal and state income tax returns amended returns, claims for refund and accounting method or period change requests. We anticipate when filings are needed and assist the client in gathering the information necessary for timely, complete and accurate filings.
- We prepare the IRS Form 1120 and all required attachments, including: Form 5471 for a controlled foreign corporation, Form 5472 for a foreign owned U.S. corporation, Form 8858 for a foreign disregarded entity, and Form TDF 90.22-1.
- We prepare income tax returns for all states that have an income tax requirement.
- We work with clients in a number of different capacities, depending on their requirements. In most cases our clients engage us to prepare all filings (full outsourcing). However, we can also work with a company's internal tax director and tax department. In this case, the client is primarily responsible for determining taxable income and we are responsible for preparing the returns. In addition we review their calculations and identify and discuss issues as they arise
State Income and Franchise/Net Worth Tax
Our tax team has extensive experience advising clients in state and local tax matters, including income tax, multi-state filing requirements and tax incentive programs.¬† We take an active part in understanding our client‚Äôs business activities and advising them on how to manage their tax footprint.¬†¬† Our diligence with respect to new developments in state tax law enables us to provide current analysis on questions of nexus and multi-state apportionment.
Our services include:
- Pre-examination assessment and state tax examination assistance
- Combined return filing planning
- Nexus studies
- Merger and acquisition review
- State tax incentive programs
- Apportionment factor computation or review
- Analysis of proposed restructuring and the impact on state taxes
Sales ¬†and Use Tax
With most states struggling to manage their budgets, state and local governments are viewing sales and use tax audits as a major source of untapped revenue.¬† This situation means a large number of companies are being selected for sale and use tax audits. In many cases, sales and use taxes can represent a company's largest tax liability.
U.S. companies often have difficulty accurately monitoring and reporting the proper amount of sales or use tax due to the administrative burden of monitoring new laws, in addition to the overwhelming regulations and filing requirements of thousands of taxing jurisdictions.
Our services include:
- Audit representation
- Reverse sales and use tax audits
- Sales and use tax compliance outsourcing
- Sales and use tax nexus review
- Voluntary and amnesty disclosure registration
- General consulting, including research and planning
- Sales and use tax training
Accounting for Income Taxes
We prepare and review the tax provision work papers, which document the company's worldwide income tax position. These work papers may be audited by the company's independent auditor.
We prepare the work papers taking in to account the company‚Äôs worldwide tax position for computations of FAS 109, FIN 48, FAS 123R, and FIN 18 (for quarterly filings). We know the disclosure requirements and how they differ for private and public companies and various industries. We have experience preparing work papers for multiple years where the tax returns no longer tie to the audited financial statements after posting of adjustments to the books. We have experience with S-1 registration filings, again with multiple years, and audit adjustments. We address all the areas of a company's tax situation including the following list of common topics:
- Transfer pricing
- Permanent establishment exposure
- Multi-state nexus exposure
- Treatment of stock options
- Audit activity
- Section 382 impact
- Research credit documentation
Our clients rely on us to conduct inquiries, and then provide observations and suggestions about items that emerge during any stage of a tax project. Our strong client relationships and the information developed from performing the annual tax return and/or provision create an excellent basis for providing advice.
Our services include:
- Deferred income tax reconciliation
- Valuation allowance analysis
- FAS 123(R) - APIC pool tracking
- FIN 48 - Uncertain tax positions
- Income tax contingencies
- Business combinations
- APB 23 - Repatriation of foreign earnings
- SOX Section 404 documentation and testing
We can provide consultation regarding assessing tax positions to assist management in the required analysis of accounting for uncertain tax positions.
Our services include:
- Inventory tax positions
- Preparation of tax opinions
- Transfer pricing studies
- Permanent establishment analysis
- Subpart F analysis
- Loss limitation analysis
- State tax structures
FAS 123 (R)
In conjunction with the 123 (R) work done by our Technical Accounting or Equity Co-sourcing groups, we provide the tax portion of the computation, to be included in the current provision as well as the deferred assets or liabilities, along with any payroll tax amounts to be withheld on disqualifying dispositions (ISO).¬† We assist with the APIC pool tracking process as well.
Mergers and Acquisitions
Many of our clients will either pursue acquisitions or become a target in one. We have assisted clients in both cases. Sellers and buyers should be concerned about the after-tax consideration they receive or pay for a business, whether that business is conducted in the form of a regular corporation, S corporation, limited liability company, or partnership
Common services provided include:
- Determine whether the acquisition should be structured as a taxable or nontaxable transaction
- If nontaxable, determine the type of tax-free transaction that should be used to accomplish the parties' individual goals
- If taxable, decide whether the transaction should be structured as a stock or asset acquisition
- Maximize the use of any net operating losses and other tax attributes of the business being acquired
- Identify other consequences that should be addressed in the negotiation process.
- Response to due diligence questions (sell-side)
- Golden parachute analyses
- Section 382 analyses
Transfer Pricing is part of the everyday work process for companies that conduct intercompany, cross-border business.¬† Too often we find that there has been no consideration given to cross-border transactions and their tax implications.¬† We can help you develop practical approaches to complex intercompany transactions and their documentation requirements that may simplify your business operations from both a tax management and implementation perspective.¬† We also recognize that your Transfer Pricing model should work in practice, not just in a theory.
- Intangible property valuations and buy-in payments
- Cost-sharing arrangements
- Mergers and acquisitions due diligence services
- Documentation studies (global and country-specific)
- Advance Pricing Agreements (APAs)
- Intercompany policy and implementation guidelines
- Intercompany agreements
Stock Option Issues
Stock options are an essential means of compensation to employees that vests their interest in the company‚Äôs success.¬† Stock options are delivered worldwide, and most countries rules applying to them are very different from the U.S. method.¬† In the U.S. the exercise of nonqualified stock options requires withholding and payroll reporting and for disqualified dispositions only payroll reporting is required. There are practical issues associated with these two instances, and other problems that arise in the granting of stock options to employees and consultants within and outside of the U.S. We have experience helping our clients anticipate and address stock option related issues.
The majority of our clients have international operations and we help them understand the tax issues such as:
- Permanent establishment
- Overseas employees
- Withholding tax
- Transfer pricing
- IRS anti-deferral rules (SubPart F)
- Foreign tax credits
- Value added tax
- Audit activity¬†
Section 382 Analysis
We have significant experience in preparing these calculations for our clients. Our calculations are often reviewed by specialists from other firms in connection with their financial statement audit of our mutual clients.
Section 382 may limit the ability of a company to utilize net operating loss and credit carry forwards in the event of a greater than 50 percent ownership change. The approach taken in the calculations will help determine whether or not there was a greater than 50 percent ownership change. Consideration must be given to fair market value of stock, which is difficult to determine for privately held companies. The rules of Section 382 are very complex and include a number of exceptions. Judgment is often required where information is not available, especially from early years in a company's history.
We work on behalf of our clients at the earliest stages of a tax audit, when we help to develop audit strategies, and it continues through to successfully representing taxpayers during IRS as well as state and local tax audits, and administrative appeals of proposed adjustments.
Our services include:
- Assisting with all communications between company and tax authority.
- Providing direction and support during audit process
- Negotiating as needed with tax authority
Contact us if you have any questions about our services or would like a free consultation with one of our directors or partners.