How technology derives business insights from partnership tax data

Organizations that need help with tax compliance and planning are deriving added value from the digital solutions that support RSM’s tax services. Just as technology is enabling all types of businesses to make smarter decisions, be more efficient and take better care of their customers, the same is true for how we serve our tax clients.

Many pass-through organizations, for example, have complex partnership structures that complicate tax issues stemming from compliance requirements, investor demands and changing regulations.

To tackle them, businesses in the past needed a library of spreadsheets, more hours than filing deadlines allowed for and a breadth of knowledge that exceeded just about any realistic tax department. Even for a business that could manage all that, the tax data often was outdated.

Now, RSM serves pass-through organizations using PartnerSight, our proprietary tiering and allocation platform that delivers real-time tax data transparently and securely. It automates manual tasks, generates K-1s in seconds, visualizes data in dashboard formats and clones data to enable scenario planning.

Here’s a closer look at three businesses for which PartnerSight is enhancing RSM’s tax services and helping them realize the power of being understood.

A hedge fund drowning in data

A hedge fund in the Northeast was struggling to meet tax filing deadlines at the fund level because of an overwhelming amount of compliance work required for the special purpose vehicles, or SPVs, that hold the fund’s investments.

The organization’s tech-savvy tax director was seeking a solution that enabled more efficient tax reporting and engaged RSM to handle the tax reporting for its SPVs. PartnerSight’s ability to automatically gather data saved hundreds of hours of report consolidation and provided the tax director more transparency in sharing income distribution for each partner.

In addition, the platform formatted SPV outputs to facilitate compliance requirements at the fund level, including state and local tax obligations.

An operating partnership with complex allocations

A subsidiary of a publicly traded real estate company with thousands of leases across the globe was using multiple massive spreadsheets to complete complicated portions of tax compliance.

Special partnership allocations created an inefficient process and were very expensive, given the organization’s complex structure and volume of acquisitions. Even with an internal tax department of a half-dozen professionals, filing obligations in all 50 states and internationally became unmanageable.

Now, with PartnerSight supporting RSM’s compliance services, tax departments can provide detailed information to partners and respond in real time to their requests. Also, the platform’s data cloning feature allows for quick visualization of the tax implications of potential transactions, allowing for informed decision-making in a fraction of the time it used to take.  

A private equity firm with foreign-sourced income

Owners of a private equity firm in the Southeast sought clarity about the sources of incoming triggering specific withholding obligations and filing requirements.

Once the firm engaged RSM’s international tax team, PartnerSight’s tagging feature provided that transparency. No longer do they have to sift through spreadsheets and K-1s. With the ease of running a simple report, the firm can now provide investors coming through multiple entities visibility into their total enterprise-wide income and the sources of it.

RSM’s international tax professionals took that data and tackled the compliance process with the firm’s tax department. They also collaborated on identifying different types of income that would trigger withholding requirements, tagging this income once in PartnerSight to ensure withholdable income was clearly identified at every entity in their tiered structure.

Stronger service

Pass-through organizations that rely on RSM for tax services are getting a first-hand look at how technology helps a business deliver value. From calculating K-1s and visualizing org charts, to providing insights into the investments generating income, PartnerSight is helping RSM turn clients’ tax functions into value-creation centers. 

Related case study

Meet PartnerSight: Industry-leading allocation and tiering platform

Watch this two-minute video to see how this cloud-based platform delivers tax data in real time, providing powerful insights to make better investment decisions.