Honeywell Replaces Spreadsheets with Corporate Tax Analyzer
Enable Honeywell to automate and document, especially in audit situations, complex tax computations with accuracy and ease.
Corporate Tax Analyzer™
Dramatic time savings by eliminating the effort to monitor tax law changes, modify spreadsheet calculations, and test spreadsheets; peace of mind knowing that Corporate Tax Analyzer is up to date and accurate; 20 years of historical data and documentation; and a collaborative, quicker IRS exam process.
Honeywell is a technology and manufacturing leader, with aerospace products and services; control technologies for buildings, homes and industry; automotive products; turbochargers; and specialty materials. It's no surprise then that handling federal audits and 1120 filings for this $36.5 billion enterprise, with operations in 100 countries, is no small task.
Increasingly Complex Federal Tax Issues
From oft-occurring IRS audits to complex tax preparation, Honeywell's 65-person tax department tackles it all while keeping a keen eye on the effective tax rate and cash flow. As part of the Federal Income Tax group at Honeywell, Maggie Walsh, Senior Tax Analyst, is heavily involved in federal tax audits, federal tax preparation, and tax planning. Her primary tool was Excel, in which she created models to calculate corporate income tax for Honeywell. This meant keeping abreast of the latest changes, interpreting them, and manually updating intricate calculations, a time-consuming process that was difficult to check for accuracy.
As it became apparent that net operating loss (NOL) carrybacks and carryforwards, along with Alternative Minimum Tax (AMT) would start coming into play for Honeywell, Walsh decided that maintaining spreadsheets for the increasingly complex tax attributes was no longer feasible.
Corporate Tax Analyzer Is an Instant Hit
When Walsh discovered Corporate Tax Analyzer, she knew it would be a tremendous help to the department. This powerful tax audit analysis and planning solution performs and documents the complex tax calculations needed for Honeywell's federal domestic income taxes. "There are some very complex sections related to AMT, FTC, repatriation, and NOLs with charitable contributions. We switched to Corporate Tax Analyzer just in time - before the NOLs kicked in."
Now Walsh uses Corporate Tax Analyzer to analyze the impact of proposed IRS adjustments during audits, calculate and manage carrybacks and carryovers of net operating losses and credits, prepare amended returns (1120X), and run multi-year projections for tax planning. "With Corporate Tax Analyzer, at the touch of a button, very complicated calculations are done for you. The software allows me to be more productive and efficient," explained Walsh.
Corporate Tax Analyzer Saves Time and Delivers Peace of Mind
Honeywell no longer uses Excel for tax calculations and the time savings has been significant. "We had a 5-year carryback net operating loss and a 10-year carryback specified liability loss that would have been very complicated and time-consuming to do in Excel with all the credit interactions. I would have had to go back to 1992 and manually do all the calculations," stated Walsh.
And there's no need for Walsh to second-guess results anymore. "I don't have to worry about the sequence of how credits are used or carryback rules - it's all been incorporated into the software," said Walsh.
With Corporate Tax Analyzer, Honeywell has realized:
- Significant time savings by eliminating manual efforts
- Peace of mind - Corporate Tax Analyzer is always up to date and accurate
- The ability to store 20 years of data and documentation
- Access to Bloomberg Tax Technology product tax experts who understand complex tax issues
Clear Picture of the Impact of IRS Adjustments
"We use Corporate Tax Analyzer to perform calculations to ensure that tax and interest payments/refunds are correct," stated Walsh. During audits, when the IRS agent proposes adjustments, Walsh runs those figures through Corporate Tax Analyzer to see what the impact will be for Honeywell over multiple years. This gives her the information and reports she needs during the audit process.
Complements Tax Preparation Software and Simplifies Planning
For tax return preparation, Walsh uses Corporate Tax Analyzer to check Honeywell's 1120 returns for accuracy, and handle carryover and carryback calculations that are not supported by the company's tax preparation software. "We enter the results from Corporate Tax Analyzer into Corp Tax to complete the 1120 returns," explained Walsh.
Corporate Tax Analyzer is also a key tool for Honeywell's tax planning efforts. Corporate Tax Analyzer determines what the cash or credit impact is for different scenarios. "It's a major benefit to be able to clearly see the impact on our tax position. For instance, we were in a position where we didn't know if we were going to lose credits," said Walsh, "and Corporate Tax Analyzer allowed us to plan accordingly and realize the credits."