Several months back I was promoted to co-lead an ongoing tax audit of one of our team's biggest clients, the local branch of a multinational American technology conglomerate and one of the world's two largest companies. This was my first experience leading such project.
When I joined the audit was stuck. During eight meetings with the inspector, no progress was made from the evidential to the material debate. Moreover, inaccurate information was unintentionally presented to the inspector, who was threatening legal proceedings.
My objective was to identify previous errors and reduce the tax exposure. I realized that to succeed in this project I’ll need to coordinate work with experts from various practices in our office to decipher the company's finances while smoothing the relationship with the inspector.
The following weeks I read countless contracts and financial reports. I divided the work to 11 disputed issues and held daily calls with the client to outline our approach. I consulted with 9 co-workers, including department chiefs, assigning preparation of supporting documentation according to field of expertise and defining negotiation strategies. Eventually I narrowed the scope to three issues that were mishandled by the company.
When I met with our client I discovered the next challenge: The Company’s controller’s refused to review things she already explained to my predecessor. She also said the parent company controllers were not responsive enough to her questions. I felt the best approach was not to confront her, but rather, become her partner. I suggested clearing my schedule and coming to her office. That way, I said, we could work faster and together convince the controllers to cooperate.
Over the next two days I felt I was gradually gaining her respect and affection. We spoke to roughly 10 finance personnel, auditors, lawyers, and site managers, with each conversation revealing more sections of the complete picture. Finally, I felt ready for the inspector.
I started by taking full responsibility for the team's previous mistakes and complemented the inspector for spotting them. Next, I provided information that strengthened the inspector's claim on two minor issues. Only then I presented my new evidential information.
The inspector said she was “extremely impressed” by our work. She jokingly added that if we keep this up we’ll finish the case sometime this year. It seemed the atmosphere was getting friendlier.
In our next meeting I got to participate in material negotiation sessions. We accepted the inspector's position on two subjects, she accepted ours on six others and we compromised on two more. We resolved 10 of 11 points of disagreement.
Taking responsibility for promoting this project was instrumental in enhancing my professional self-confidence and exposing me to new aspects of our work. Overall, within three months we managed to nearly finalize a complicated tax audit that was virtually stuck.
The information we uncovered during our preparation allowed us to create two new projects for supporting departments in our firm and additional work for the audit team. These projects benefit both the client and our organization, creating profitable projects for us and strengthening our relationship with a major client while reducing our client’s tax liability in its annual tax reports by hundreds of thousands of dollars.