But managers are in the best position to identify tax opportunities and costs early on, and weigh tax savings against non-tax considerations (which typically and appropriately dominate most business decisions). Strategic Corporate Tax Planning is a new approach to enable and motivate managers and entrepreneurs to think about the big things in taxes in an organized fashion, and thus be more effective in enhancing the bottom line.   

Most managers think about taxes when it is too late to really do something about them. After an IRS audit notice, for example, all that can be done is to pull together the documents they want to see, and pray that they do not find anything. If they do find something, there is an uphill battle to persuading the IRS that they are wrong. After a new project, or whole new venture, is planned, changing things to save taxes can be very difficult.

This is quite logical, because in this age of globalization and change, companies face a bewildering array of uncertain, and ever changing tax rules. People not trained in taxation can never really understand all there is to know about it, and thus rely on experts for detailed knowledge.  

However, the least costly and most effective tax planning is done while a business idea is being developed.  Currently, because most managers do not have an organized knowledge of generic tax strategies, which apply to specific business processes, the tax aspects of most projects are not considered until the proposals are quite advanced. At that stage, tax planning usually is more expensive, less effective, and causes friction between line managers and corporate staff.  The latter is because, all too often, people with tax expertise are thrust in the role of "deal breakers" at the end of the decision process rather than deal makers guiding it from the beginning. 

The way to get managers and entrepreneurs to be able and willing to think about the big things in taxes, in an organized fashion, is through strategic tax planning. It enhances the quality of tax planning being done, and also allows business people to better use (or not waste time and money on) tax specialists because the big tax issues and cost-benefit trade-offs of the various ways of structuring a deal already will have been identified.

Put simply, strategic tax planning's strategic (rather than detailed) orientation helps business decision makers use their knowledge of the company and the industry to better balance the costs and benefits of tax planning ideas. Furthermore, it is organized around business processes to further help managers identify tax planning techniques, as well as their tax and non-tax costs and benefits, and thus better plan the projects and activities which the managers generally perform.

Helps business decision makers identify (and balance the costs and benefits of) tax savings ideas early on and throughout the development of a project, thus making the implementation of the ideas less intrusive and more effective.

Unlike other tax trade books -- indeed, unlike tax textbooks -- strategic tax planning for managers is organized around business processes, such as the important tax aspects of the main ways businesses penetrate new markets.  Existing trade books dealing with taxes either focus on preparing tax returns for individuals or on explaining tax rules which affect certain kinds of transactions (such as buying and selling stocks). They tend to be organized around tax forms -- e.g., itemized deductions  -- or Internal Revenue Code Sections -- e.g., the specifics of completing an IRC Section 1031 “Like Kind” Exchange. Thus, existing books, with their emphasis detailed tax expertise, tend to be too narrow and too technical for managers in general, and do not help managers generally spot tax planning opportunities when they are otherwise working using their own expertise to develop projects.

Finally, this book gives a general yet sophisticated view of the kinds of tax issues which should be in mind when dealing with cross-border transactions.  It should be of particular value to Europeans and Asian business people who want to understand motivations of their American counterparts. 

Strategic tax planning for managers is needed because it presents the target audience (who are by definition not tax specialists) with 1) an organized and effective way for them to integrate tax effects into business decisions, and 2)  illustrations of how they can do this with specific examples from typical decisions. 

JOHN KARAYAN, a tax professor who was a senior executive in one of the largest software companies, is the lead author of Strategic Corporate Tax Planning.