Key insights:

• • • Real-time tax compliance has restructured the tax function 鈥� Dozens of nations now require structured invoice data in real time, with the EU mandating cross-border digital reporting by 2030. The traditional file-and-wait audit cycle is gone now, replaced by clearance regimes that can freeze multi-million-dollar invoices for nonconforming data.

    • Regulators have pulled ahead of the businesses they oversee 鈥� Tax authorities in mature CTC jurisdictions now arrive at audits with structured transaction data already processed by their own analytics. Government turnaround times that took months now take weeks, forcing multinational tax leaders to compress multi-year roadmaps into 12- and 18-month cycles to keep up.

    • The lessons travel beyond tax 鈥� There are two ways to lose this race: Outrun your own controls or surrender entirely. Both showed up in Las Vegas, and both will show up in every other regulated profession over the next decade.

LAS VEGAS 鈥� The听 sold out. A guest list that included tax directors from Amazon, Walmart, and Procter & Gamble, OpenAI’s tax department, the Big Four, 成人VR视频 and every other major tax software provider in the market spent three days at the Aria with pool deck, casino floor, and restaurants worth lingering over all a few steps away.

The room had every reason to spend its evenings somewhere else other than a sunless conference room talking about tax. Yet almost no one did. They were too busy grappling with an arms race the corporate audit side had begun to suspect it was losing.

And it鈥檚 one they cannot afford to lose.

End of the traditional model

The arms race is real-time tax compliance, and it has dramatically restructured the ground beneath the tax profession in less than a decade. By April, more than 60 jurisdictions have moved or are moving to continuous transaction controls. Italy and Hungary were early; Poland, France, Belgium, Brazil, Saudi Arabia, India, and Singapore are now operational or imminent, and countries like Spain, Germany, the United Kingdom and the United Arab Emirates are on the way. The European Union has locked onto a 2030 deadline for cross-border real-time digital reporting and a 2035 backstop for harmonizing what’s left.

The traditional model 鈥� issue an invoice, file a return weeks later, audit when the auditor gets around to it 鈥� no longer exists in those jurisdictions. Tax authorities now see the transaction as it happens, validates it in structured form, and pre-fills the return on the taxpayer’s behalf.

What this new process has done to the tax function is fundamentally alter its structure in a way leaves practitioners reeling. The job used to be a craft of Excel, judgment, and institutional memory. Now, at the high end, it has become as much a data science problem as an accounting one.

The arms race is real-time tax compliance, and it has dramatically restructured the ground beneath the tax profession in less than a decade.

Attendees at TEI鈥檚 2026 Tax Technology Seminar polled themselves on tooling, and the answers came back as a list of data pipelines that dozens of attendees seemed to favor: Alteryx, Power Platform, Snowflake, Databricks, Microsoft Fabric, & Palantir Foundry. These platforms are running agentic AI systems against historical filings, deploying validation agents to critique their own outputs, and using AI-driven image-to-text solutions to pull structured data out of state tax notices that never arrive in the same format twice. They are data integration pipelines in 15 minutes that would have sat in an IT queue for two months before being answered.

They have little choice as the stakes are far higher and the challenges far more demanding than they used to be. In a clearance regime, an invoice has no legal force until the tax authority returns its identifier. Did you submit the wrong VAT ID, malformed schema, or mismatched master data? Congratulations! Your invoice is rejected. That means the truck doesn’t move, the buyer doesn’t pay an invoice that may be in the millions of dollars and then the penalties stack on top. Italy, for instance, charges a fee of 70% of the disputed VAT.

And then there are the audits.

Outgunned

The audit isn’t an occasional event anymore. In government jurisdictions with mature continuous-transaction-control tax regimes, it is a conversation that started weeks before the auditor walked in, on data their analytics had already processed.

A speaker on a seminar panel led by Deloitte and 成人VR视频 described the dynamic plainly: Tax authorities in those jurisdictions have arrived at audits already knowing more about the transactions than the companies and their in-house audit teams sitting across the table. Not because anyone is hiding anything, but because the data arrived at the tax authority in structured form, in real time, and the authority had run its analytics on it before the meeting was even on the calendar. One panelist said this represents “a shift from us preparing returns to us answering notices on the data that’s been shared.”

What the room kept circling around, however, was that regulators have not just kept pace with their counterparties, they鈥檝e now pulled ahead. Singapore, one panelist noted, is doing more with AI than even major companies. Indeed, government turnaround times that used to take months are now closing in weeks, which is forcing multinational tax leaders to compress their multi-year roadmaps into 12- and 18-month cycles 鈥� not because they want to but because their counterparties already had.

The lesson that corporate tax functions have been forced to absorb is that there are two ways to lose this race, and both were on display at TEI鈥檚 2026 Tax Technology Seminar as cautionary tales.

This asymmetry is structural, and that is what makes it an arms race rather than a transition. There is no version of this dynamic in which the company being audited wins by being more careful, more thorough, or more well-prepared at the end of the quarter. The advantage now accrues to the side with the fastest and cleanest pipelines, that runs the smartest AI, and that understands the way these increasingly complex systems interact. Increasingly, that winning side is the government. And, more alarming, this isn鈥檛 just a problem for this particular industry 鈥� tax just happened to get here first. However, it鈥檚 coming for everyone.

Two ways to lose

The lesson that corporate tax functions have been forced to absorb is that there are two ways to lose this race, and both were on display at TEI鈥檚 2026 Tax Technology Seminar as cautionary tales. The first is to outrun your own controls. AI coding tools that let a tax analyst build a working data integration pipeline in 15 minutes are genuinely valuable; they also let that same analyst deploy something nobody else has reviewed, documented, or knows how to maintain. An OpenAI panelist conceded the point when an audience member asked about the security implications of vibe coding 鈥� clearly, a new capability is also a new problem.

The second way to lose is harder to talk about. One panelist described, to attendees鈥� general dismay, hearing of companies that have given up on compliance entirely 鈥� instead, they pad their numbers with a safety margin and treat the eventual audit as the cheaper of the two costs. The panel recoiled 鈥� one member responded with a flat “Do not do this.” However, the anecdote landed because it isn’t theoretical. When the gap between what regulators can see and what your team can produce becomes wide enough, surrender starts to look rational.

Playing to win

Of course, the attendees at TEI鈥檚 2026 Tax Technology Seminar were not surrendering. If they were, they’d have been at the pool deep into their third cocktail. Or they’d have been on the casino floor or were about to catch an afternoon show. Instead, day after day, the tables filled, the exhibit hall ran hot, and the room was buying, listening, and building.

The game has changed and the stakes have risen 鈥� and the room is dead set on playing to win.

You can find more of听our coverage of Tax Executives Institute events here

• • • The reactive phase is partly a mindset problem 鈥� More than half of tax departments remain stuck in reactive, compliance-focused operations, not only because of frozen budgets, but because of cost-center thinking that shapes cost-center behavior.

    • The value is there, but the measurement isn’t 鈥� Two-thirds of tax professionals say their department鈥檚 technology investment has already enabled more strategic work; yet 22% say they track no performance metrics at all, making that value invisible to the people who control the budget.

    • The rebrand starts internally 鈥� With AI integration timelines compressing to between 1 and 2 years, tax departments that shift their posture now by measuring wins, designating leadership, and building the business case will be better positioned to lead 鈥� and those that don’t will fall further behind, faster.

Apart from the sales department, most other departments within a business are simply viewed as a cost center, and the tax department is no exception. However, like so much of that thinking, this view isn鈥檛 quite accurate because it is the tax department that can uncover the most savings for the business.

You need not look further than recent data that shows while 67% of tax professionals say their department鈥檚 technology investment has already enabled them to do more strategic work, 22% say they track no performance metrics at all, making it difficult to demonstrate the tax department鈥檚 value to the C-Suite.

Given this, it鈥檚 somewhat unsurprising that this cost-center view persists. Worse yet, is often internalized by in-house tax teams themselves. It is one thing to be viewed and treated as a cost center but to act like one is a different matter.

So, what if the bigger problem isn’t how the rest of the business views the tax department but instead how the department views itself?

The , from the 成人VR视频 Institute and Tax Executives Institute, reveals a profession that knows it is capable of far more than it is currently delivering. And yet the same patterns repeat: Budgets stay flat, technology adoption stays slow, and a majority of departments remain stuck in a reactive phase in regard to their technological development that has “remained stubbornly consistent over the past few years,” according to the report.

That’s not just an organizational failure; rather, that’s a mindset problem 鈥� and it starts from within the tax department.

The choices we keep making

The report outlines a Technology Maturity Curve that maps a progression in tech development from chaotic through reactive, proactive, optimized, and predictive stages.

This year, 64% of respondents placed their tax department at the chaotic or reactive end of the spectrum 鈥� up from 57% last year. The reactive phase is the operational definition of a cost center: Heads-down, output-focused, and disconnected from the broader business.

The report reveals something even more important. In those cases in which the budget isn’t the primary constraint, behavior doesn’t change. Almost one-third of respondents (32%) said their strategy for addressing capacity constraints is process optimization 鈥� without new technology or additional hiring. Not because they can’t pursue more, but because that’s the default mode.

One respondent put it plainly: “鈥ur company as a whole is making significant changes, but the tax department is typically an afterthought in those decisions.”

This raises a question that鈥檚 worth asking: Who taught the company to treat tax as an afterthought?

There鈥檚 evidence showing that tax departments are more

The data to challenge the cost-center identity isn’t missing; rather, it’s just not being captured or communicated to the C-Suite.

Two-thirds of respondents (67%) said their tax department鈥檚 technology investment over the past three years has already enabled a shift toward more strategic, proactive work, such as data analytics, forecasting, risk assessment, and decision-making support. Among larger departments, nearly half (48%) are now spending more time on these higher-value activities. This clearly shows that companies that have invested in tax automation are reporting real results, such as improved accuracy, reduced errors, lower costs, and streamlined workflows.

And yet, 22% of tax departments track no technology performance metrics at all, according to the report 鈥� not time savings, not error reduction, not ROI. Nothing.

While 67% of tax professionals say their department鈥檚 technology investment has already enabled them to do more strategic work, 22% say they track no performance metrics at all, making it difficult to demonstrate the tax department鈥檚 value to the C-Suite.

That is cost-center thinking in action 鈥� the belief that it鈥檚 the job of the tax department to do the work, but not to prove its value. However, what isn’t measured can’t be communicated 鈥� and what can’t be communicated can’t change the perception, either internally or externally.

The rebrand starts with how departments see themselves

The most important audience for the tax department’s rebrand isn’t the C-Suite. It’s the department itself.

That means tracking wins and building a formal business case for investment 鈥� grounded in hard ROI and cost savings, which the report identifies as the metrics that are most important to Finance and IT, the two functions that frequently share control of the tax technology budget.

It also means getting serious about leadership. The portion of tax departments with a designated person leading tax technology strategy jumped to 88%, from 51%, in a single year. However, a title only goes so far; and the report is clear 鈥� that role only works when backed by a team that believes it belongs at the decision-making table.

Finally, this rebranding means treating AI as an opportunity, not a threat. The majority of tax professionals have compressed their expectations for AI integration to 1鈥�2 years, from 3鈥�5 years, with 7% saying AI is already central to their workflow. Those departments still locked in cost-center mode are the least prepared for that shift 鈥� because cost centers don’t invest ahead of the curve.

The narrative changes when the mindset changes

No one is going to rebrand the tax department on its own, it has to come from within. Further, it has to be built through deliberate measurement, consistent communication, and a shift in how tax professionals think about our own work.

Your department is not a cost center. The work proves it, and the data backs it up. Now, you should act like you believe it.

You can download a fully copy of the , from the 成人VR视频 Institute and Tax Executives Institute, here

Key takeaways:

• • • The AI tools demonstrated at the 2026 TEI Tax Technology Seminar were genuinely capable 鈥� These included agentic systems running live, nine-year-olds building software by voice, and automation pipelines deployed by major tax departments. The question of Does this work? is effectively settled.

    • That progress shifted the conversation to harder problems 鈥� Some of these problems are hallucinations that fail silently, governance vacuums in which tax rarely owns AI implementation, training rollouts that collapse when people aren’t ready, and rising token costs that could entirely change the economic case for automation.

    • The community’s defining posture wasn’t skepticism or hype 鈥� Instead, it was honest reckoning. Tax leaders believe in the tools and were actively deploying them but also are refused to treat capability as a substitute for the institutional work of process, ownership, and oversight.

“I think you are a very bad man,” said Dorothy.

“Oh, no, my dear; I’m really a very good man, but I’m a very bad Wizard, I must admit.”

鈥� The Wonderful Wizard of Oz, L. Frank Baum

LAS VEGAS 鈥� I arrived in Las Vegas a day early for the , which gave me one free evening before three days of packed sessions. Little question as to what I was going to do: The Wizard of Oz show at the Sphere.

It’s spectacular. The Sphere wraps you in imagery at a scale so vast if feels like you鈥檙e going to fall into it. The tornado shakes you like it鈥檚 going to rip the entire building apart and fling you to Oz right alongside Dorothy. The technology is genuinely, thrillingly good鈥� and that’s what makes the fissures so disorienting when you spot them. A munchkin’s head rendered as a 2D .png with a visible gap where the neck should be. A bad CGI effect. Dorthy flickering at the edges like a bad cutout on a green screen. You don’t catch the tech glitches when the spectacle is unconvincing; rather, you catch them precisely because it’s so good that the gaps have nowhere left to hide.

The next morning, I walked into the TEI Tax Technoloy Seminar and found three days of panels that played out the exact same dynamic 鈥� except the stakes were far more real.

A very good man

TEI organizers opened with the obvious joke: “We’re careful to limit the number of AI sessions,” they noted, before audibly pondering whether it was time to just rename the whole thing. Fair question, given how much has changed over eight annual iterations of this get-together. Indeed, if you’d been dropped into this event from its first meeting nearly a decade ago, you’d think you’d been dropped into Oz.

One presenter described her elementary-school-aged children building video games by dictating instructions to a coding tool, then showing the games running. That alone would have been science fiction five years ago. However, the room was full of it. OpenAI sent four members of its own tax department to demonstrate live automation pipelines. Google and Microsoft walked attendees through building AI agents with nothing more than a mouse and keyboard, making it look so easy my grandmother could have made it work.

One presenter described her elementary-school-aged children building video games by dictating instructions to a coding tool, then showing the games running. That alone would have been science fiction five years ago.

Down the hall, the advanced tax systems that many industry visionaries were dreaming about just two years ago weren’t theoretical anymore 鈥� they were running live. Tax directors from Amazon, Walmart, and a dozen other household names sat alongside Big Four advisors and every major tax software provider through three days of sessions, all of it sold out.

We were definitely not in Kansas anymore. Nor was this the AI of two years ago, the one that could draft a passable email or a poem but couldn鈥檛 so much as parse a spreadsheet. This was something materially different. The tools had crossed a threshold. They worked, and everything the profession had been promising for years was alive and functioning in the room.

And that changed the conversation entirely.

A very bad wizard

When the technology was half-baked, the debate was simple: Is this even possible? Skeptics said no, enthusiasts said give it time, and everyone argued about capability.

The 2026 TEI Tax Technology Seminar was the place where that argument effectively ended 鈥� not because the skeptics lost, but because the question became irrelevant. The tools were plainly, demonstrably good 鈥� indeed, a nine-year-old could use them and was.

The new question that arose was harder and less comfortable to discuss: What can’t AI do?

The room answered honestly and brutally. Someone described uploading a tax schedule to an AI agent and getting numbers that didn’t look right. When challenged, the AI confessed: I couldn’t open your file, so I was just telling you what you wanted to hear.

That anecdote landed differently than it would have two years ago. Back then, it would have been evidence that AI wasn’t ready. At the 2026 TEI Tax Technology Seminar, in a room in which people had just watched live agentic demos and were actively deploying these tools, it was evidence of something more unsettling: AI doesn’t fail loudly anymore. It fails quietly and even politely.

AI performs competence it doesn’t have, at a level of sophistication that鈥檚 just good enough because it is genuinely smarter than it was a few years ago, and it will get away with it unless a human knows enough to push back. Like its counterpart in Oz, this makes an AI tool is a very good man 鈥� genuinely useful, genuinely capable 鈥� and sometimes a very bad wizard. It can’t do the thing you actually need it to do on its own, but it may try to trick you into thinking it did.

AI performs competence it doesn’t have, at a level of sophistication that鈥檚 just good enough because it is genuinely smarter than it was a few years ago, and it will get away with it unless a human knows enough to push back.

That theme echoed across three days of honest, sometimes uncomfortable conversations that went beyond just the technology itself. A transformation director confessed to deploying a training program across dozens of global clients and failing spectacularly. A tool designed to save two hours of work suddenly consumed an entire day because the people who鈥檇 actually had to use it hadn鈥檛 been consulted. Others described Alteryx workflows nobody could explain because the person who built them had left the company without documenting the logic.

And, more concerning, when the room was polled on whether the tax function actually owns AI implementation at their company, two hands went up out of more than 50. Human-in-the-loop was a constant refrain, of course, but attendees confessed to grappling with how to review an ever-increasing volume of work when the errors were increasingly polite, quiet, and technical.

Of course, the professionals at the seminar weren鈥檛 dismissing the technology, which is what made the honesty remarkable. As one senior director said flatly: “You will not survive in this field if you don’t have a change mindset.” They believed in the tools, and they were buying them, deploying them, building around them. They just refused to pretend the tools alone would be enough.

Going home

Overall, the 2026 TEI Tax Technology Seminar was the place that the tax technology community stopped debating whether the Wizard was real and started grappling with the fact that he couldn’t get them home.

That’s not disillusionment; indeed, it’s the opposite. Dorothy doesn’t have her crisis when Oz looks fake, she has it after she meets the Wizard and discovers he’s real but insufficient 鈥� that his balloon won鈥檛 get her home. And unlike Baum’s Wizard, the magic isn’t a fraud 鈥� which is precisely what makes the problem harder. A humbug you can dismiss, but real capability that still can’t get you home? That’s the problem you actually have to solve.

Like Dorothy, today鈥檚 tax leaders will have to click their ruby slippers themselves.

You can find more of our coverage of Tax Executives Institute events here

Key takeaways:

• • • Country-by-country reporting will only increase in complexity 鈥� Australia’s enhanced Country-by-country reporting (CbCR) requirements 鈥� reconciling taxes accrued against taxes credited 鈥� are a preview of where other high-scrutiny jurisdictions are heading, and companies need to build that explanatory analysis capability now, systematically, rather than scrambling later.

    • There has to be a shared narrative from corporate teams 鈥� The EU鈥檚 public CbCR is a reputational event, not just a filing. So that means tax, communications, and investor relations teams need a shared narrative before the data goes public 鈥� inconsistencies create exposure you do not want to manage reactively.

    • Rethink your filing jurisdiction in light of changes 鈥� If EU filing jurisdiction was chosen at initial implementation and never revisited, look again. Guidance has matured, and a more efficient or better-suited option may now be available.

WASHINGTON, DC 鈥� Among the many pressing topics discussed in detail at the recent , country-by-country reporting (CbCR) and its ability to reshape the corporate tax industry, certainly had its place. Between escalating local jurisdiction requirements, the , and for deeper explanatory disclosures, CbCR has quietly evolved from a transfer pricing filing obligation into something far more strategically consequential.

The floor is just the floor

The creation of the by the Organisation for Economic Co-operation and Development (OECD) was intended as a minimum standard for countries. And now jurisdictions are increasingly layering additional requirements on top of the OECD鈥檚 basic template, resulting in a widening gap between the standard requirements and what tax authorities actually want.

Currently, Australia is the most pointed example. Australian tax authorities are now requiring multinational groups to go beyond the standard CbCR data fields and provide explanatory narratives that reconcile taxes accrued against taxes actually credited. This requires corporate tax departments to bridge the gap between financial statement accruals and their organizations鈥� cash tax positions in a way that is coherent, defensible, and consistent with positions taken elsewhere.

At the TEI event, panelists explained that for tax departments this will carry complex timing differences, deferred tax positions, or significant jurisdictional mismatches between booked and cash taxes. Indeed, this additional layer of scrutiny will need dedicated attention.

The broader signal matters: Australia will not be the last jurisdiction to move in this direction. So that means that tax departments should treat Australia’s approach as a leading indicator of where other high-scrutiny jurisdictions could be heading. Building the capability to produce this kind of explanatory analysis systematically 鈥� rather than scrambling jurisdiction by jurisdiction 鈥� would be the smarter long-term investment for corporate tax teams.

Public CbCR in the EU: The transparency ratchet has turned

For US-based multinationals with significant European operations, the EU’s public CbCR directive has fundamentally changed the calculus. Unlike the confidential tax authority filings most corporate tax departments are accustomed to, the EU鈥檚 public CbCR rules put organizations鈥� jurisdictional profit and tax data into the public domain, making it visible to investors, journalists, civil society groups, and organizations鈥� employees and customers.

The EU framework specifies which entities trigger the reporting obligation and which entity within the group is responsible for making the public filing. That scoping analysis is not always straightforward for complex multinational structures and getting it wrong could present both reputational and legal risk.

Choosing a filing jurisdiction is not purely an administrative decision 鈥� it is a choice that affects the regulatory environment that governs the disclosure, the language requirements, the timing, and the interpretive framework that applies to data.

For US-headquartered groups, the implications extend well beyond Europe. Public CbCR data is now being read alongside US disclosures, reporting on ESG activities, and public narratives about tax governance. Inconsistencies, including those technically explainable, could create unwanted noise about the company. This is clearly another reason why the tax function should partner across the business 鈥� in this case with the communications team 鈥� to make they both are aligned to tell the CbCR story instead of being caught off guard by a journalist or an investor during an earnings call.

Questions that US multinationals should be asking

Fortunately, US multinationals with multiple EU subsidiaries are not required to file public CbCR reports in every EU member state in which they have a presence. Instead, under the EU framework, a qualifying ultimate parent or standalone undertaking can satisfy the public disclosure requirement through a single filing in one EU member state, provided the relevant conditions are met. Germany and the Netherlands have emerged as two of the more popular choices for this consolidated filing approach, given their well-developed regulatory frameworks and the depth of available guidance on what compliant disclosure looks like in practice.

The strategic implication is meaningful. Choosing a filing jurisdiction is not purely an administrative decision 鈥� it is a choice that affects the regulatory environment that governs the disclosure, the language requirements, the timing, and the interpretive framework that applies to data. Corporate tax departments that defaulted to a filing jurisdiction early in the EU implementation process should take a fresh look. Regulatory guidance has matured significantly, and there may be a more efficient or better-suited path available than the one originally chosen.

The uncomfortable divergence

There is a notable irony in the current environment. Domestically, the IRS and U.S. Treasury’s 2025-2026 Priority Guidance Plan reflects an explicit focus on deregulation and burden reduction, detailing dozens of projects aimed at reducing compliance costs for US businesses. Meanwhile, the international compliance environment has moved in the opposite direction, adding disclosure layers, explanatory requirements, and public transparency obligations that many US businesses cannot avoid simply because they are headquartered in the United States.

This divergence has a direct implication for how tax departments allocate resources and make the internal case for investment in international compliance infrastructure. The burden internationally is not going down 鈥� indeed, it is intensifying 鈥� and that argument is now backed by concrete examples rather than projections.

3 things worth doing now

There are several actions that corporate tax teams should consider, including:

Audit CbCR data quality with Australia’s enhanced requirements in mind 鈥� If you cannot readily reconcile taxes accrued to taxes credited at the jurisdictional level, that gap needs to be closed before it becomes an authority inquiry.

Revisit EU filing jurisdiction strategy 鈥� If your jurisdictional decision was made at the time of initial implementation and has not been reviewed since, it is worth a fresh look before the next reporting cycle.

Develop an internal narrative around public CbCR data before it circulates externally 鈥� Your company鈥檚 tax story should not be a surprise to the corporate teams involved in communications, investor relations, or ESG 鈥� and in today鈥檚 world, assuming such news stays quiet is no longer a safe assumption.

While CbCR started as a tool for tax authorities, it today has become something more visible, more public, and more consequential than that 鈥� and that trajectory is not reversing any time soon.

You can download a full copy of the 成人VR视频 Institute鈥檚

Key takeaways:

• • • Only IEEPA鈥慴ased tariffs are up for refund 鈥� Refunds will flow electronically to importers of record through ACE, the government鈥檚 digital import/export system, but only once CBP鈥檚 process is finalized.

    • Liquidation and protest timelines are now critical 鈥� An organization鈥檚 tax concepts that directly influence which entries are eligible and how long companies have to protect claims.

    • Tax functions must quickly coordinate with other corporate functions 鈥� In-house tax teams need to coordinate with their organization鈥檚 trade, procurement, and accounting functions to gather data, assert entitlement, and get the financial reporting right on any tariff refunds.

WASHINGTON, DC 鈥� When the United States Supreme Court issued its much-anticipated ruling on President Donald J. Trump鈥檚 authority to impose mass tariffs under the International Emergency Economic Powers Act (IEEPA) in February it set the stage for what it to come.

The Court ruled the president did not have authority under IEEPA to impose the tariffs that generated an estimated $163 billion of revenue in 2025. In response, the Court of International Trade (CIT) issued a ruling in requiring the U.S. Customs and Border Protection (CBP) to issue refunds on IEEPA duties for entries that have not gone final. That order, however, is currently suspended while CBP designs the refund process and the government considers an appeal.

At听the recent , tax experts discussed what this ruling means for corporate tax departments, outline what is and isn鈥檛 a consideration for refunds and the steps necessary to apply for refunds.

As panelists explained, the key issue for tax departments is that only IEEPA tariffs are in scope for refund 鈥� many other tariffs remain firmly in place. For example, on steel, aluminum, and copper; Section 301 tariffs on certain Chinese-origin goods; and new of 10% to 15% on most imports still apply and will continue to shape effective duty rates and supply chain costs.

So, which entities can actually get their money back?

Legally, CBP will send refunds only to the importer of record, and only electronically through the government鈥檚 digital import/export system, known as the Automated Commercial Environment (ACE) system. That means every potential claimant needs an with current bank information on file. And creating an account or updating it can be a lengthy process, especially inside a large organization.

If a business was not the importer of record but had tariffs contractually passed through to it 鈥� for example, by explicit tariff clauses, amended purchase orders, or separate line items on invoices 鈥� they may still have a commercial basis to recover their share from the importer. In practice, that means corporate tax teams should sit down with both the organization鈥檚 procurement experts and its largest suppliers to identify tariff鈥憇haring arrangements and understand what actions those importers are planning to take.

Why liquidation suddenly matters to tax leaders

As said, the Atmus ruling is limited to entries that are not final, which hinges on the . CBP typically has one year to review an entry and liquidate it (often around 314 days for formal entries) with some informal entries liquidating much sooner.

Once an entry liquidates, the 180鈥慸ay protest clock starts. Within that window, the importer of record can challenge CBP鈥檚 decision, and those protested entries may remain in play for IEEPA refunds. There is also a 90鈥慸ay window in which CBP can reliquidate on its own initiative, raising questions about whether final should be read as 90 days or 180 days 鈥� clearly, an issue that will matter a lot if your company is near those deadlines.

Data, controversy risk & financial reporting

The role of in-house tax departments in the process of getting refunds requires, for starters, giving departments access to entry鈥憀evel data showing which imports bore IEEPA tariffs between February 1, 2025, and February 28, 2026. If a business does not already have robust trade reporting, the first step is to confirm whether the business has made payments to CBP; and, if so, to work with the company鈥檚 supply chain or trade compliance teams to access ACE and run detailed entry reports for that period.

Summary entries and heavily aggregated data will be a challenge because CBP has indicated that refund claims will require a declaration in the ACE system that lists specific entries and associated IEEPA duties. Expect controversy pressure: As claims scale up, CBP resources and the courts could see backlogs. If that becomes the case, tax teams should be prepared for protests, documentation requests, and potential litigation over entitlement and timing.

On the financial reporting side, whether and when to recognize a refund depends on the strength of the legal claim and the status of the proceedings. If tariffs were listed as expenses as they were incurred, successful refunds may give rise to income recognition. In cases in which tariffs were capitalized into fixed assets, however, the accounting analysis becomes more nuanced and may implicate asset basis, depreciation, and potentially transfer pricing positions.

Coordination between an organization鈥檚 financial reporting, tax accounting, and transfer pricing specialists is critical in order that customs values, income tax treatment, and any refund鈥憆elated credits remain consistent.

Action items for corporate tax departments

Corporate tax teams do not need to become customs experts overnight, but they do need to lead a coordinated response. Practically, that means they should:

• • • confirm whether their company was an importer of record and, if so, ensure ACE access and banking information are in place now, not after CBP turns the refund system on.
    • map which entries included IEEPA tariffs, identify which are non鈥憀iquidated or still within the 180鈥慸ay protest window, and file protests where appropriate to protect the company鈥檚 rights.
    • inventory all tariff鈥憇haring arrangements with suppliers, assess contractual entitlement to pass鈥憈hrough refunds, and align with procurement and legal teams on a consistent recovery approach.
    • work with accounting to determine the financial statement treatment of potential refunds, including whether and when to recognize contingent assets or income and any knock鈥憃n effects for transfer pricing and valuation.

If tax departments wait for complete certainty from the courts before acting, many entries may go final and fall out of scope. The opportunity for tariff refunds will favor companies that are data鈥憆eady, cross鈥慺unctionally aligned, and willing to move under time pressure.

You can find out more about the changing tariff situation here

Key insights:

• • • Possibilities vs. practicality 鈥� There is a growing frustration gap between what corporate tax professionals want to achieve and what their current technological tools will allow.

    • Expectations about AI 鈥� Tax professionals have significantly accelerated the timeframe in which they expect AI to become a central part of their workflow.

    • Proactive progress 鈥� Automation is enabling a gradual shift toward more strategic, proactive tax work, although not as quickly as many tax professionals would like.

The recently released , from the 成人VR视频 Institute and Tax Executives Institute, reveals that while automation of routine tax functions is indeed enabling a long-desired shift toward more strategic, proactive tax work in some corporate tax departments, a majority of tax leaders surveyed say upgrading their department鈥檚 tax technology is still a relatively low priority at their company.

Jump to 鈫�

2026 Corporate Tax Department Technology Report

The report surveyed 170 tax leaders from companies of all sizes to find out how corporate tax professionals are using technology, overcoming obstacles, and planning for the future.

A growing 鈥渇rustration gap鈥�

In general, the report found that while many companies (especially larger ones) are actively upgrading their tax department鈥檚 technological capabilities, there is a growing frustration gap between what tax professionals know they can accomplish with more robust technologies and what their current tools allow them to do.

Adding to this frustration is a growing discrepancy between the additional budget and resources tax departments hope to get each year and the harsher reality they often face. Indeed, even though tax leaders remain optimistic that their budgets and capabilities will expand and improve in the coming years, fewer than half of the respondents surveyed said their departments received a budget increase last year, and many saw budget cuts.

Further, the report shows that the prospect of incorporating ever more sophisticated forms of AI and AI-driven tools into tax workflows is also very much on the minds of tax professionals. Even though the actual usage of AI in corporate tax departments is still relatively low, the report reveals that tax professionals now expect AI become a central part of their workflow within one to two years, much faster than they did in last year鈥檚 report.

Indeed, as the report explains, this expectation of more imminent AI adoption represents a significant shift in attitude, because most corporate tax departments are rather circumspect about how, when, and why they incorporate new tech tools into their established routines.

If today鈥檚 technological capabilities continue to accelerate, companies that have been slow to invest in the infrastructure necessary to keep pace may soon find themselves struggling to catch up with their more tech-savvy counterparts, the report warns.

Moving toward more proactive work, albeit slowly

For companies that have invested in the technological infrastructure necessary to support advanced tax technologies, the payoff is becoming increasingly evident.

According to the report, about two-thirds (67%) of tax professionals surveyed said their company鈥檚 investment in technology had enabled a shift toward more proactive tax work within their departments. This shift is particularly noticeable at large corporations, at which, unsurprisingly, investment in tax technology has been more generous.

The 2026 Corporate Tax Department Technology Report also explores other aspects of corporate tax departments, including their hiring practices, tech training, purchasing strategies, what they see as the most popular tech tools for tax, and numerous other factors that affect how tax departments operate.

You can download

a full copy of the 成人VR视频 Institute’s here

Key takeaways:

• • • Reframe your value proposition 鈥� Translate tax achievements into business language the C-suite understands, such as protecting shareholder value, enabling growth, and mitigating risk rather than simply reporting compliance metrics.

    • Invest strategically in technology and talent 鈥� Prioritize automation and AI tools while outsourcing strategically to free internal resources for high-value strategic work that demonstrates the department’s business impact.

    • Build cross-functional partnerships 鈥� Proactively collaborate with IT, legal, operations, and HR on enterprise-wide initiatives that will position the tax function as an essential strategic partner rather than an isolated compliance department.

SAN FRANCISCO 鈥� In recently released , published by the 成人VR视频 Institute and Tax Executives Institute,听a large portion of the tax department professionals surveyed expressed their desired to do more strategic work compared to simple tactical work. This was a theme we鈥檝e seen repeatedly across our research: Tax professionals are shedding their traditional compliance-focused image and moving toward becoming strategic business partners to their organizations.

By articulating their value proposition, investing strategically in technology and talent, and aligning with broader business objectives, tax department leaders can secure the resources and influence needed to drive meaningful organizational impact.

Yet, the tax function has long been viewed as a necessary cost center 鈥� a department that ensures compliance, files returns, and manages audits 鈥� despite the essential work that in-house tax professionals do. Rarely did these professionals feel they are treated as strategic business partners. However, perception is rapidly changing, according to the insights shared at the recent听.

Today’s tax leaders are positioning their teams as strategic partners who provide critical insights that influence business resilience, growth strategies, and organizational risk management, conference panelists explained.

The evolving role of the tax function

Amid ongoing tax and trade policy shifts and increased business uncertainty, opportunities abound for tax professionals in corporate tax departments. Indeed, several panelists noted that the State of the Corporate Tax Department report showed that tax leaders are increasingly becoming deeply involved in strategic decisions ranging from business resilience strategy (with 63% of survey respondents saying their tax department is involved in this area) to M&A transactions (60%), organizational risk management (58%), and supply chain management (55%).

Further, CFOs are increasingly looking to their in-house tax leaders for support across multiple strategic areas, including digital transformation and AI, ESG strategy, workforce strategy, and economic resilience planning. This expanded role creates for the tax team creates both opportunities and challenges for those seeking to demonstrate their strategic value.

By articulating their value proposition, investing strategically in technology and talent, and aligning with broader business objectives, tax department leaders can secure the resources and influence needed to drive meaningful organizational impact.

In fact, one of the most pressing question tax leaders face is how to secure adequate budget funding in an environment of competing corporate priorities. The answer lies in strategic thinking about resource allocation and being intentional about having a seat at the table to better advocate for necessary investments. Tax department leaders must educate executive leadership on the risks that come with not having enough budget resources 鈥� from trying to do more with less to the potential for the company to face more exposure and risk that includes increased audits and fines.

As session panelists explained, the key is to frame discussions in terms that C-Suite leaders understand. Rather than simply requesting more resources, tax leaders should articulate how investments in the tax function can all it to better protect revenue, enable growth opportunities, and mitigate organizational risk.

Creating a value-focused identity

That articulation to management is a big step toward a tax function鈥檚 goal to move from feeling and acting like a cost center to being a strategic partner to the business. Indeed, corporate tax department leaders must change their own perceptions of how the department is perceived first 鈥� in essence, rebranding themselves and reimagining their identity. This starts with creating a compelling value story that resonates with the C-suite.

Start with creating (or recreating) a department mission statement that emphasizes value creation rather than mere compliance, aligning with broader priorities of the organization, such as business partnership and growth. Then, work to provide insights to drive decisions, and support regulatory demands while maintaining transparency.

Check out for more insight on how corporate tax professionals shift from compliance to strategic work

One practical approach is to speak the language of the C-suite by translating tax achievements into business metrics that executives care about, panelists added. For example, rather than reporting that the department completed the tax provision on time, frame it instead as the department protected $X million in shareholder value through accurate financial reporting or enabled the acquisition to close on schedule by providing timely tax due diligence.

It is also important for tax departments to track and communicate their wins consistently, panelists said, creating regular touchpoints with executive leadership to share accomplishments that position the tax function as a proactive business partner.

Navigating technology, talent, and collaboration

Technology investment represents both an opportunity and a challenge for tax departments, as the State of the Corporate Tax Department report makes clear. More than half of the respondents say they expected some increase in their budgets to invest in new tech tools over the next few years, and many indicate they plan to invest in tools and solutions to automate their workflow, especially those that support machine learning and generative AI (GenAI).

While it is great they are anticipating an increased budget, panelist explained that tax department leaders must educate management on the practical challenges of AI adoption, including the need for clean, well-structured data as a foundation.

It is also important for tax departments to track and communicate their wins consistently, creating regular touchpoints with executive leadership to share accomplishments that position the tax function as a proactive business partner.

On another point, staffing remains one of the most critical challenges facing tax departments, and many survey respondents cited hiring as key strategic priority, according to the report. Many departments will also look to technology to augment the missing talent and strategically use outsourcing and co-sourcing to alleviate talent pressure as well. And by partnering with external advisors for specialized compliance work or surge capacity during peak periods, tax departments can further free up internal resources to focus on higher-value strategic activities.

In fact, a central theme the session panelists leaned into was how the most effective tax departments build strong collaborative relationships across the organization. According to the report, 94% of CFOs and tax leaders report that the CFO helps facilitate cross-collaboration between tax and other functions such as legal, IT, operations, and finance.

Tax department leaders should proactively seek these opportunities to partner with other departments on strategic initiatives; for example, collaborating with IT on digital transformation, working with operations on supply chain optimization, partnering with legal on M&A transactions, and supporting HR on workforce strategy.

Today, the transformation of the corporate tax function from cost center to strategic partner is not merely aspirational 鈥� it is already underway in many forward-thinking organizations. As tax, audit, and trade policy become more complex and business uncertainty continues to mount, the opportunity for tax leaders to demonstrate their strategic value to the organization has never been greater.

You can download听a full copy of the听, from the 成人VR视频 Institute and Tax Executives Institute, here

Key takeaways:

• • • Invest in your data before adopting AI 鈥� Without clean, organized, and accessible data, AI solutions will not deliver the desired results.

    • People are the ultimate differentiator 鈥� Fostering curiosity and continuous learning are essential for tax professionals to thrive in the AI era.

    • Successful AI integration requires commitment to change 鈥� Transparent change management and a willingness to experiment can help build trust and buy-in across the tax team and the organization.

SAN FRANCISCO 鈥� As corporate tax departments continue to undergo AI-driven technology transformation, industry leaders gathered at the recent to discuss how tax professionals can successfully navigate this new era. Their insights crystallized into three essential takeaways that all corporate tax teams should consider as they embark on their AI journey.

1. Data is your new currency

The first and most critical takeaway was simple: Data is your new currency, and you must invest in it before you invest in AI. Most tax departments are starting the conversation around what AI tools they need to buy, with all the talk being about efficiencies and how AI can help. Indeed, many organizations are rushing to implement AI solutions without first ensuring that their foundational data infrastructure is sound. The result is often disappointing 鈥� garbage in, garbage out, as the old saying goes.

The tax function of the near future will face increasing demands for real-time information from tax authorities around the world. For systems and data that aren’t clean, organized, and accessible, implementing AI may not only fail to solve the problems it was employed for but possibly exacerbate them. Before deploying any AI solution, tax departments must ask themselves critical questions, including: Do we have a single source of truth for our data? Is our data structured in a way that AI can effectively process it? Can we trust the accuracy and completeness of our information?

The message is clear: You should pause before rushing into AI implementation. Audit your data landscape and identify gaps, inconsistencies, and quality issues. Invest the time and resources necessary to create a solid data foundation. This groundwork may seem tedious, but it’s absolutely essential for AI success going forward.

2. People are your differentiator

The second key takeaway addresses a common fear about AI, that it will replace human workers. The reality presented at the conference was far more nuanced and optimistic. People remain the ultimate differentiator in tax departments, but the skills that define success are evolving. Curiosity and continuous learning will separate thriving tax professionals from those who get left behind.

Conference panelists explained that AI should be viewed as a tool for augmentation, not replacement. The most successful tax departments will be those that embrace a human + machine model, on in which AI handles the repetitive, data-intensive tasks while humans focus on judgment, strategy, and relationship-building. Tax, after all, is fundamentally about social engineering 鈥� understanding not just the letter of the law, but how regulations are interpreted and applied in real-world contexts. This requires human insight, empathy, and strategic thinking that AI cannot replicate.

However, leveraging AI effectively does require a mindset shift. Tax professionals must become comfortable with technology, willing to experiment, and committed to understanding how AI tools work. This doesn’t mean everyone needs to become a data scientist, but it does mean cultivating genuine curiosity about technology and its applications.

In this way, change management emerges as crucial component in this dynamic. Building trust in AI systems requires taking baby steps and bringing your tax team along on the journey. Transparency is essential 鈥� you must explain what the AI is doing, why certain approaches were chosen, and what the limitations are. When people understand the why behind AI implementation, buy-in follows more naturally.

Leaders should focus on the process, not just the outcomes, panelists said, adding that corporate tax leaders should identify key touch points where AI can create meaningful intelligence without overwhelming the organization. Remember, it’s not about automating everything. Some processes benefit tremendously from AI; others may not. Using human judgment to guide these decisions is precisely the kind of value that distinguishes exceptional tax professionals.

As a tax leader, you should encourage your team to be curious. Create safe spaces for experimentation in which failure is seen as a learning opportunity rather than a career risk. Those tax professionals who will thrive in the AI era are those who approach new tools with enthusiasm rather than apprehension, who ask questions rather than resist change, and who see continuous learning as a professional imperative rather than an occasional activity.

3. Partnership is your strategy

The third critical takeaway recognizes that successful AI implementation within tax departments cannot happen in isolation. Partnership is your strategy, and collaboration across tax departments, IT teams, and external advisors is how organizations will scale AI responsibly and effectively.

Tax departments have traditionally operated with significant autonomy, but the AI era demands that these silos be broken down. Tax professionals bring domain expertise and understand the nuances of compliance, planning, and tax controversy. IT teams bring technical knowledge about infrastructure, security, and integration. And external advisors offer perspective on industry best practices and emerging technologies. None of these groups can successfully implement AI in the tax function without the others.

This collaborative approach should begin before any AI tool is selected. Tax, IT, and external advisors should jointly define the problem that tax leaders are trying to solve. What specific pain points does AI need to address? What does success look like? How will you measure ROI? These conversations ensure alignment and prevent the common pitfall of implementing technology in search of a problem.

Internal audit functions also play a crucial role in the AI journey, particularly regarding risk management and controls. As AI becomes more embedded in tax processes, audit teams need to understand how these systems work, what risks they introduce, and how to verify their outputs. This requires ongoing dialogue between tax and audit functions 鈥� another partnership that’s essential for responsible AI scaling.

The partnership model extends to managing relationships with tax authorities as well. As jurisdictions increasingly demand real-time data and embrace their own specific AI tools for compliance monitoring, corporate tax departments must work closely with legal and government affairs teams to understand evolving requirements and ensure that their organization鈥檚 systems can meet them.

Scaling AI responsibly means implementing appropriate governance frameworks, establishing clear accountability for AI outputs, and maintaining human oversight of critical decisions. It also means being thoughtful about which processes to automate and which to keep human driven. And perhaps most importantly, it means investing in training across all partner groups, so everyone understands their role in the AI ecosystem.

The path forward

The transformation of corporate tax through AI is not a distant future scenario 鈥� it’s happening now. Organizations that embrace these three principles 鈥� investing in data before AI, fostering an environment of curiosity and continuously learning, and building strong partnerships across organizational functions 鈥� will position themselves to thrive in this new landscape. And those that rush ahead without proper preparation or try to go it alone will likely struggle.

The message from TEI’s conference is ultimately one of optimism tempered with pragmatism. As panelists noted, AI offers tremendous potential to make tax functions more efficient, insightful, and strategic; however, realizing that potential requires thoughtful preparation, human-centered change management, and collaborative execution. The future of corporate tax is bright for those willing to do the work.

You can find out more about the work of the Tax Executives Institute here

Key takeaways:

• • • Penalties spike when resources and controls are stretched thin 鈥� Under-resourced tax departments face significantly higher penalty exposure, with nearly half reporting at least one penalty and one-in-eight experiencing fines exceeding $1 million.

    • Reactive workloads erode savings and accelerate burnout 鈥� Tax professionals spend most of their time on reactive or tactical work despite preferring a 70/30 strategic/tactical split, creating an environment in which reaction consumes planning capacity.

    • Incrementally targeted technology deliver faster returns than big-bang overhauls 鈥擭early 70% of tax departments remain in chaotic or reactive stages of digital maturity, with many tax professionals saying they lack confidence in their department鈥檚 ability to upgrade systems within two years.

The numbers are blunt. A large portion (44%) of respondents to the report, published by the 成人VR视频 Institute and Tax Executives Institute,听say their department had at least one penalty 鈥� and among under鈥憆esourced tax departments, it was nearly one鈥慼alf. And one-in-eight say these fines topped $1 million.

And when it comes to technology, large portions of tax department professionals say their departments鈥� approach to technology is either chaotic or reactive (69%), and two鈥憈hirds say their departments aren’t currently using generative AI (GenAI) to improve efficiency within the department.

This isn’t a skills problem 鈥� it’s a system problem.

Fortunately, as the Corporate Tax Department report showed, there are steps that corporate tax department leaders can take, including:

• • Treat penalty reduction as a board鈥憀evel KPI, tracking the number, value, and cause of penalties to better pinpoint control gaps
  • Direct a defined slice of the technology budget toward core preventives 鈥� such as data accuracy, filing automation, indirect鈥憈ax determination, and reconciliation tools 鈥� that can cut errors before they become fines
  • Frame resource requests around real avoided鈥憄enalty scenarios, because showing that incremental investment could have offset last year鈥檚 losses builds a more persuasive case for future funding

Ultimately, penalties and fines are data points that reflect a deeper through-put problem and solving that requires visibility at the corporate governance level, not reactive patchwork after the fact.

The reactive鈥憌ork trap that quietly kills savings

This year鈥檚 report found that tax professionals spend most of their time on reactive or tactical work, even though they say they鈥檇 prefer to see a 70/30 strategic/tactical mix. Also, nearly 60% describe their departments as under鈥憆esourced 鈥� up from 51% a year earlier.听 Having an under鈥憆esourced tax department, our research shows, can create an environment in which reaction consumes any planning and strategic work.

Indeed, the consequences of being under-resourced compound quickly. More than half of respondents from under-resourced departments say they face penalties, and many also report missing tax鈥慶redit opportunities, delaying cross鈥慺unctional projects, and operating with less confidence in their forecasts or liability management.

Not surprisingly, burnout is another hidden cost that under-resourced departments pay daily: Tax teams that are stretch through overtime to compensate for structural and personnel shortfalls often see reduced accuracy, just when judgment is most needed.

Again, there are steps that corporate tax department leaders can take, including:

• • Establish a proactive鈥憈ime floor and mandate that each week a fixed block of time is reserved for modeling, forecasting, or credit discovery 鈥� then, measure results in saved cash or lower effective鈥憈ax鈥憆ates
  • Create a rapid鈥憈riage lane for repetitive fire drills that would allow you to codify recurring crises 鈥� such as late adjustments, jurisdictional queries, or document chases 鈥� and then automate the intake so these tasks stop devouring cognitive bandwidth
  • Invest in targeted capacity, not generic headcount; adding a tax鈥憈ech analyst or process鈥慳utomation specialist yields more lasting leverage than simply dividing the same tasks among already overworked staff

In much of this, the bigger insight is cultural: Reclaimed time is reclaimed value. Every hour shifted from reactive compliance to predictive analysis strengthens your tax department鈥檚 compliance posture.

Tech hesitation is expensive, while smaller faster wins matter more

As the report shows, almost 70% of respondents say their tax departments are still in the chaotic or reactive stages of digital maturity, and barely 6% operate optimally. Further, nearly 60% of respondents say they lack confidence in their ability to upgrade systems within the next two years. This correlation between reactive approaches and technological stagnation can feed directly into a department seeing increased penalties and an overreliance on manual processes.

Interestingly, corporate tax departments in smaller organizations, those with less than $50鈥痬illion in annual revenue, and those from very large organizations, with more than $5鈥痓illion in annual revenue, are outpacing their midsize peers when it comes to technology purchases and integration. In fact, these two groups 鈥� at opposite ends of the market 鈥� are more likely to secure leadership buy鈥慽n, tap external vendors for automation, and climb faster toward proactive operations.

Of course, GenAI sits on the cusp of this changing that trajectory. More than half (57%) of respondents say their tax departments are implementing new technology this year, including GenAI-driven tools. And those departments that are, mainly are using it for research, summarization, and document drafting, rather than more complex integrated tax analytics. However, without a reliable tax data spine 鈥� clean, centralized, and accessible data 鈥� even the smartest model can鈥檛 deliver true automation or insight.

Still, as the report outlines, there are actions that tax department leaders can take now to boost their department鈥檚 tech prowess, including:

• • Prioritize 蹿补蝉迟鈥慠翱滨 automations, such as indirect鈥憈ax determination, e鈥慽nvoicing compliance, tax鈥憄rovision close tasks, and certificate management. These are proven areas in which automation immediately cuts cycle times and penalty exposure
  • Pair early GenAI pilots with structured data. For example, start with narrow copilots for research or variance explanation, but feed them curated internal data to evolve beyond guesswork and toward data-driven decisions
  • Borrow capacity intentionally and partner with third鈥憄arty automation specialists for discrete projects using a build鈥憃perate鈥憈ransfer model. This way, internal teams inherit sustainable, well鈥慸ocumented workflows rather than black鈥慴ox solutions.

Waiting for a full replacement of the organization鈥檚 enterprise resource planning system or a perfect end鈥憈o鈥慹nd tech stack actually can trap departments in perpetual backlog. Incremental wins, particularly those tied directly to penalty reduction or labor savings, can build the momentum and political capital needed to make the case for proper resourcing for larger transformations.

The recent 2025 State of the Corporate Tax Department report reveals a powerful connection between resource allocation and tax department performance: Under-resourcing perpetuates penalties and reactive workflows that can only be broken by shifting to proactive systems and automation.

For tax department leaders, the imperative is clear 鈥� invest in prevention, reclaim strategic time, and modernize incrementally, because true progress comes not from doing more, but from choosing fewer priorities and executing on those select ones with excellence.

You can download听a full copy of the , from the 成人VR视频 Institute and Tax Executives Institute, here

Key takeaways:

• • • Tax requirements have become more complex 鈥� The 2025 R&D credit reporting requirements have become significantly more complicated, demanding detailed business component and expense breakdowns.

    • AI may offer solutions 鈥� AI-driven platforms that are aligned with new IRS expectations can offer practical solutions to strengthen substantiation, simplify technical narratives, and ease the documentation burden.

    • Pre-planning and preparation are key 鈥� Proactive audit preparation, strategic communication, and awareness of recent IRS procedural changes are critical for successful resolution of R&D examinations.

This year marks a milestone for the corporate tax community as the tax code鈥檚 Section G Research & Development credit reporting enters the mandatory phase for returns exceeding $1.5 million in qualified research expenses or $15 million in gross receipts. Formerly, taxpayers faced little more than two simple fields on 鈥� now, however, filers must provide granular detail at the business component level.

These new requirements include breaking out employee expenses (direct, supervisory, and support), and separating additional qualified categories like supplies, computer leasing, and contract research for every component. The new requirements mirror global trends seen in countries such as Germany and France, where R&D credit documentation has historically been much more burdensome.

How documentation has changed

Historically in the United States, many aspects of R&D substantiation were included in the study and not presented on the tax form itself. In June 2024, the IRS released a revised draft of Form 6765 鈥� and provided 鈥� that included the updated stance demanding transparency. Wherein every business component, its relation to controlled groups, the type of component, and the wage/expense breakdown must be represented on the tax return. The implication is clear: Taxpayers must bolster their documentation, ensuring contemporaneous evidence that is not solely prepared for tax purposes.

Compared to many foreign jurisdictions, especially those in Europe, the US still offers relatively less burdensome requirements; however, this directional shift is unmistakable. Complex, technical project narratives and granular wage allocation are increasingly expected by US tax authorities. The IRS indicates that it presumed all filers already performed this granular breakdown. Now, the reporting burden moves from optional best practice to taxable necessity.

Shifting audit terrain

In a , presented by 成人VR视频 and Tax Executives Institute, panelists also discussed audit shifts. Indeed, 2025 brings procedural shifts within the IRS鈥檚 audit playbook. Notably, the elimination of the agreement of facts process at the conclusion of Large Business & International audits in early 2026 removes a formal avenue that filers can use to respond to the IRS鈥檚 versions of events before the Notice of Proposed Adjustment is issued. This heightens the importance of detailed, factual Information Document Request (IDR) responses throughout the entire audit, ensuring a well-documented appeals record if needed.

Additionally, tools like the Accelerated Issue Resolution (AIR) and Fast Track Settlement programs are expanding. These initiatives streamline multi-year disputes and improve the odds of reaching taxpayer-favorable outcomes, particularly as IRS management and appeals officers seek more efficient, resource-aware resolutions. Recent experience shows a trend: Fast Track settlements are securing more positive outcomes for taxpayers 鈥� sometimes even when the parties are far apart on the numbers.

State audits add their own complexity, especially because many states don’t recognize federal Accounting Standard Codification 730 directives. Tax departments must proactively develop full substantiation for state reviews, rather than relying solely on federal documentation standards or shortcuts. Partnering with audit-experienced professionals, especially those with IRS backgrounds, can further improves audit results.

Turning burden into benefit

The new mandates from Section G are not a signal to retreat from claiming the credit. Despite elevated standards, the credit remains a vital incentive for businesses. Rather than being deterred, corporate tax departments can use this to bolster their requests for more technology investment, including AI-driven tools and solutions.

The arrival of advanced generative AI (GenAI) models makes R&D credit substantiation faster and more precise than ever before. These tools have capabilities that include:

• • • Ingesting and organizing vast quantities of technical and operational documentation into IRS-compliant formats
    • Translating technical jargon into tax-speak, ensuring that every business component gets a concise, accurate, and compliant technical narrative
    • Assisting in quantifying R&D time at the individual level, mapping granular time and activities to precise expense categories
    • Generating contemporaneous documentation referenced directly to underlying evidence or regulatory authority for bulletproof

Corporate tax professionals also can take tedious and manual tasks 鈥斕� such as interviewing engineers, mapping activities, and defending allocations 鈥� and now use AI to manage this work at scale. Real-time views of qualified R&D activity, lessened reliance on labor-intensive surveys, and immediate provisioning all contribute to faster, more rigorous studies, bigger credits, easier audits, and happier R&D teams.

Preparing for 2025 returns and beyond

There are several actions that corporate tax teams can take now to prepare for 2025 returns, including:

• • • Embrace AI and contemporary documentation workflows to meet new substantiation and reporting burdens
    • Build IDR responses, audit narratives, and documentation as if they will be reviewed in appeals or in court 鈥� precision and completeness are paramount
    • Cultivate constructive auditor relationships, whether federal or state, with a mindset focused on problem-solving rather than confrontation
    • Consider Fast Track and AIR strategies for accelerated and possibly more favorable dispute resolution in multi-year credit audits
    • Continually monitor IRS and state developments, regulatory guidance, and prominent cases as precedents shift norms and expectations.

R&D credit compliance has evolved from simple reporting to sophisticated, data-driven substantiation. With increased detail required for every dollar claimed, corporate tax departments must adapt quickly.

They now need to be leveraging advanced technology, have subject matter expertise, and create more transparent auditor relationships. Having AI-powered tools is a necessity to making more accurate credits and smoother audits a tangible reality. The bottom line is that R&D credits are valuable and corporate tax department teams will now need to invest time and expertise to get them right.

You can find more about how tax professionals are planning for future tax changes here