Tax compliance in most businesses only covers about 40 percent of the total tax risk in those businesses. The other 60 percent is hidden.
That quote is just one of the eye-opening observations in a new book about corporate tax risk management titled, Managing 7 Habitual Tax Mistakes (A Tax Risk Management Handbook), written by noted tax attorney and author, Daniel Erasmus.
"In some respects, many corporate taxpayers are their own worst enemies because they tend to be reactive to tax problems and tax risks. This inevitably results in additional and unforeseen taxes, sometimes totaling millions of dollars," notes Erasmus. He adds that he wrote the book for a broad audience, including CEO's, CFO's, boards of directors, corporate operations managers and, of course, tax advisors.
"I hope this book will communicate to today's corporate leaders the extraordinary importance of a proper tax risk management (TRM) process," he says. "When an effective TRM program, such as I've developed, is in place, these individuals can be certain their companies will enjoy minimal tax exposure while being fully regulatory compliant."
Erasmus explains that because many corporations have internal tax departments that deal with compliance issues, senior management sometimes is lulled into the false impression that their tax risks are well understood and under control.
"This is a dangerous and often costly mistake that numerous senior executives and board members make, many times with disastrous results. However, a properly structured prevention strategy that is an integral part of a proven tax risk management process can help prevent this catastrophe from occurring, and my book is a guide to doing just that," Erasmus asserted.
Erasmus is a pioneer in the area of the constitutional rights of taxpayers and is at the forefront of tax research in this area. Prior to founding the law firm of Daniel Erasmus & Partners, he held positions at several law firms and with Deloitte & Touche. A popular author, teacher, lecturer and talk show host, Erasmus has written numerous articles and books, including two textbooks for lawyers. He currently is working on a PhD and his thesis, "Tax and the Constitution," examines the power of tax collection agencies to obtain information from taxpayers in order to conduct audits.
Managing 7 Habitual Tax Mistakes is published by LexisNexis. To learn more about the book and its author, including how to purchase it, visit http://www.7taxrisks.com/ and http://www.dnerasmus.com/.