Taking Back Tax: Tiptree Discusses Regaining Control and Adding Value

James Hilton, Tiptree Tax Manager, joins Kiersten Kilcullen, Corptax Professional Services Manager, for an informal Q & A.

A Corptax client since 2018, James discusses the tax department’s experience moving from an outsourcing model to an in-house tax department.

James, why was it important to own your data and bring tax in-house?

James: When I first started at Tiptree in 2015, we had been outsourcing for quite a while. Both our provisions and returns were done by an outside provider, so we didn’t have a great handle on a lot of the information. Plus, it was really expensive—we were spending over $1.5 million every year to complete the provision and get the returns out the door. It became important to bring those costs down. We also needed to better understand what went into the provision and returns, and how the trial balance fit into them. Those are the main reasons we wanted to bring things in-house, and Corptax really helped us with that.

You mention cost and information. Are there other advantages you discovered bringing your tax data in- house?

James: There are many, but two stand out. One, we’ve been able to streamline the inputs. We’re a holding company with many subsidiaries, so we would get year-end provision packages in different formats. Consolidating them in Excel was time-consuming and extremely cumbersome. Having our data in Corptax makes it so much easier. We get a trial balance, code it, pull it in, and consolidate everything very quickly. That’s been a big help in terms of making our process a lot faster and easier.

Secondly, the ability to have all the information on-hand and readily available to us is a huge plus. When an outside provider prepared our returns, we would give them the trial balance and just get a return. We tied out adjustments and agreed to the taxable income. It was very hard to know where a number on a particular line came from when we needed that level of detail. We were actually under audit for a return that was prepared by the third party. The back-and-forth time and the cost of having them dig through data and figure out how they put together the return was a lot!

Now, for any audit going forward, we know where all numbers come from. Corptax gives us the amount on this or that line of the return, the M adjustments that go against them, and the amounts imported from the trial balance. It’s a very clear set of tracks, a very easy trail to follow. It makes the whole audit support process much easier.

After taking back tax, have you noticed an effect on team morale?

James: We have. It was a significant project for my boss and me—we’re a 2-person tax department. But now we get our returns done much faster and consolidate with fewer headaches, so our jobs have gotten easier. We spend more time on research, planning, and strategizing for different deals or acquisitions. And that translates into more respect and appreciation from our organization for our function and the value Tax adds. We can be of greater service because we’re not spending so much time on the provision and returns.

What type of information is management and your C-Suite asking for?

James: When we prepare returns and do the provision, we take a tax approach and go legal entity by legal entity. Management tends to think in terms of business segments or reporting groups rather than legal entities. That’s how they understand a business. Now, we’re able to use different groups or roll-ups and get reports to them quickly in the views they prefer to see—how the data makes the most sense to them. For example, in Excel, it used to take us two weeks to take the provision through year-end sign off. Now, because management sees the data in the ways they prefer, we get it done in two hours.

What was the biggest benefit of working with Corptax Professional Services to implement your software?

James: Working with Professional Services was really helpful in making our implementation fast and successful. We had a dedicated Corptax team making sure all worked smoothly, and we received documentation about everything. And we continue to work with the team—if I call with a question or have a new entity to set up or a different input for new adjustments—Corptax knows our system and offers precise insights. We get targeted responses as opposed to explaining the situation to someone who picks up the phone and isn’t familiar with our tax processes or company. Plus, Corptax is so well-integrated, it’s like working with a coworker, rather than a random help desk. It’s a lot more personal, and that’s been really valuable.

Lastly, have you used the Corptax Support group?

We have, and everyone I’ve dealt with has been pleasant and kind, and the turnaround is very fast. The support team is committed to figuring out any issue and making sure it’s actually addressed. They’re not just rattling off a knowledge base article—they get into the system and make sure the solution works.

When workloads exceed resources, you have options! Explore them in a Tax Matters blog post: Points to Consider Before Outsourcing a Tax Process.

Learn how tax automation helps tax teams accomplish more in less time. Contact Corptax at 800.966.1639 or info@corptax.com.

About Tiptree Inc:

Tiptree Inc. (NASDAQ: TIPT) allocates capital to select small and middle market companies with the mission of building long-term value. Established in 2007, we have a significant track record investing in the insurance sector and across a variety of other industries, including mortgage origination, specialty finance and shipping. With proprietary access and a flexible capital base, we seek to uncover compelling investment opportunities and support management teams in unlocking the full value potential of their businesses. For more information, please visit tiptreeinc.com and follow us on LinkedIn.