Meeting evolving needs through corporate tax outsourcing
RSM’s team approach provides flexibility and value
CASE STUDY |
A $2 billion manufacturing company with diverse international, federal and state tax needs was seeking the most efficient staffing arrangement to address them. Over the years, the company had built a large tax group but then, during some financial difficulties, downsized the corporate tax function.
The company sought a flexible staffing arrangement that could evolve with its changing needs, giving it access to the full range of resources it needed but without the cost of maintaining a huge internal tax department.
RSM started serving the client on a project basis. As we proved our ability to understand and address the company’s complex tax challenges, we evolved into a co-sourcing tax provider. As the company’s needs and strategy changed, the nature of our relationship with them kept pace, including a period where we co-sourced virtually all of the tax department and a new evolution where we now work with the company’s internal tax director. We assisted the client with its full range of international, federal and state tax planning, compliance and provisioning needs.
In addition to effectively and timely meeting the client’s full range of day-to-day tax needs, RSM’s commitment to understanding the client’s situation and industry has delivered a variety of significant benefits over the course of our relationship, including:
- Assisting them during a bankruptcy restructuring, including designing and implementing a plan to minimize any adverse tax effects related to a $1.5 billion discharge of indebtedness income.
- Providing detailed state and local tax structuring advice to allow the company to combine entities and better manage their state tax compliance and planning.
- Helping them explore and establish a program to capitalize on research and development tax credit opportunities, which now generate more than $2 million a year in credits. During the bankruptcy, we also helped them preserve $70 million in research expenses for use in the post-bankruptcy period.
- Advising on an international structure to allow the company to effectively defer tax on offshore operations while managing and using cash from profitable foreign operations to fund cash needs in other international locations.
By using a co-sourcing model, our client has been able to access the full range of RSM capabilities, including specialized resources in international tax, ASC 740, state and local tax, and other areas, at a reasonable cost.