Guide to Tax Analysis for Compliance

Jan 27, 2022

These days, client expectations are at an all-time high. Tax practitioners are expected to help their clients determine whether they are in compliance with the applicable tax rules while staying up to date on the most recent tax law changes. These expectations are not easy to meet particularly when new tax rules are unclear or ambiguous.

In our white paper “Guide to Tax Analysis,” we discuss the 5 most common challenges tax accountants face in a constantly changing environment and how technology can help overcome these challenges:

1. Knowing the right questions to drill down on the facts

Tax practitioners must critically evaluate the facts and ask further questions when information provided by the client is unclear. By utilizing factor-based questionnaires tailored specific to tax issues, accountants can easily identify the most important factors the IRS and the courts consider in certain tax situations. Our AI technology also allows you to stress-test the impact of each factor on the ultimate outcome, allowing you to surface insights on your client’s tax scenario. 

2. Getting to the answer without getting lost in legislation

Practitioners often want a faster way to work through the legislation or the regulations without being bogged down by the legalese. To provide practitioners with a better starting point for their research and analysis, Blue J’s legal research team have created summaries on specific tax topics that provide an overview of the common legal issues involved with a particular topic and gathered the relevant sections of statutes and regulations in a step-by-step manner alongside precedential court cases and important recent IRS revenue rulings (a “Blue J Workspace Template”).

3. Keeping track of interrelated entities

Tax planning strategies that involve multiple transactions are often best conveyed through a diagram that illustrates the relationships between the parties, their respective roles, the movement of assets and liabilities as well as the steps involved. Without the ability to keep track of all relevant entities, compliance steps can be easily missed. Blue J Diagramming is built specifically for tax practitioners to use for tax-specific issues. The tool provides a faster and seamless diagramming process with pre-built formatting options so that the key information can be embedded into the diagram with just a few clicks.

4. Recognizing close-call opportunities for tax savings

Checklists and tools help practitioners perform a cursory check to ensure that they have considered a specific deduction or exemption. However, rarely do these tools allow the practitioner to imagine how close the taxpayer is to actually realizing its benefit. Blue J’s Predict Outcome tools are designed to provide insight into these close-calls, the straight-forward situations, and everything in between. Practitioners can determine exactly which changes to the scenario will allow the client to obtain their desired outcome.

5. Documenting the advice

Practitioners must ensure that their instructions are well documented while also preserving the relationship of trust that exists between the client and the practitioner. Each of Blue J’s Prediction tools and Guided Analysis tools generate a report detailing the most likely outcome for the particular legal issue, an analysis of the issue backed by leading authorities as well as a curated list of the most similar IRS rulings and court decisions.