Almost half of fast-growth CEOs are expecting a substantial increase in their company's business taxes over the next two years--and over half were not aware of the IRS's announced plan to staff up and increase audits of midsized companies. Overall, an average increase of 18 percent in business taxes is expected over the next 12-24 months. But, viewed separately:
- 46 percent expect their company's business taxes will increase by 40 percent.
- 47 percent see these taxes remaining about the same.
- 4 percent anticipate a decrease.
- 3 percent did not report.
The group anticipating the big increase is comprised of the fastest growers, who are expecting a 23.9 percent increase in revenues over the next 12 months -- 37 percent greater than all others.
In light of these expected changes in business taxes, and others, it may be somewhat surprising that tax planning has not received greater management attention.Fifty-four percent of CEOs report that corporate tax planning is not completely integrated into their business plan for the next 12-24 months -- including 24 percent saying it is not at all integrated and another 30 percent noting it is only partially integrated. Sixty-fivepercent say their company hasn't increased the amount of time and effort spent on development and implementation of tax planning during the past two years.
Most CEOs surveyed (61 percent) were not aware that the IRS is adding significant staffing over the next few years in order to increase audits of companies with assets ranging from $10-250 million.When alerted to this initiative, 44 percent said they expect the projected increase in IRS audits over the next 12 to 24 months will cause companies like theirs to be more cautious and conservative in their tax planning; but a bare majority, 51 percent, said it would not. Only 15 percent were aware of the related opportunity to jointly develop the scope of any new audit with the IRS, at its commencement. A total of 62 percent of all those surveyed believe that their present internal resources would be capable of co-developing a new audit's scope at the start--although 34 percent disagreed. Belief in the capabilities of internal resources was notably higher among companies where tax planning is integrated with their business plan, 69 percent, versus 57 percent for all others.
PricewaterhouseCoopers' "Trendsetter Barometer" is developed and compiled with assistance from the opinion and economic research firm of BSI Global Research, Inc.
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