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SUNNYVALE, CA, April 4, 2005 – Liquid Engines, the provider of breakthrough corporate income tax management and planning software, today announced that its one-of-a-kind product suite is garnering widespread industry support as it equips today’s tax departments with the technology needed to help preserve a company’s reputation by achieving an optimal tax profile, minimizing tax risk, and meeting the requirements of Sarbanes-Oxley. Recent analysis from the Corporate Executive Board showed "disclosures of tax and personnel-related issues appear to drive the most negative market reactions.” This conclusion is further proof that companies have an operational imperative to implement tax management practices that meet the corporate governance demands for transparency and accuracy, and that optimize a company’s tax position to protect shareholder value.
“In light of the recent filings for tax-related material weaknesses, it has become mission critical for corporate tax departments to reevaluate their tax management methods. It is no longer acceptable to operate as a ‘black box,’” said Charles Rossotti, senior advisor at The Carlyle Group and former commissioner of the Internal Revenue Service. “To meet today’s requirements, tax operations must leverage advanced technology, such as the Liquid Engines software system, to ensure that they report financial figures—such as tax provision amounts—that are precise, documented, and auditable.”
Managing income taxes in today’s business climate requires rapid, thorough analysis of complex, multi-variant business problems and detailed documentation of the decision-making process. Until now—supported only by unsophisticated spreadsheet-based tools and modeling techniques—tax professionals have struggled to meet these demands. While spreadsheets are suitable for evaluating small problems, they are limited in their scope and have proven to be error prone and labor intensive. An article in the May 24, 2004, issue of Computerworld stated, “Recent audits of 54 spreadsheets found that 49 (or 91%) had errors, according to research by Raymond R. Panko, a professor at the University of Hawaii.”
“When a company’s stock price is on the line, it isn’t acceptable to be ‘partially correct’ or worse yet, to guess at the right answer. Today, decisions need to be spot on and they need to be auditable. For the tax profession, this means changing the old way of doing things,” said Bob Perlman, former vice president of tax of Intel Corporation. “To contribute to the bottom line and help reduce risk, tax departments need to move away from their reliance on spreadsheets and embrace the latest technology.”
The Liquid Engines Income Tax Management Suite—designed for both international and state income tax management—uniquely combines tax-specific modeling tools, breakthrough optimization technology, and comprehensive reporting capabilities with a centralized data repository and embedded tax regulations. Built to handle even the most complex corporate tax structure, Liquid Engines’ software streamlines the modeling process, drives accuracy and visibility into tax accounting processes, and simplifies record-keeping procedures.
“Corporate tax departments have had to make do with uni-dimensional ‘pencil and eraser’ spreadsheets for far too long,” said Walter Hellerstein, Francis Shackelford professor of taxation at the University of Georgia School of Law. “Liquid Engines’ revolutionary technology advances today’s tax management and planning processes by enabling tax professionals to analyze and optimize their tax and business structures in an interactive, multi-dimensional, and transparent manner that renders traditional spreadsheet analysis obsolete.”
Fortune 500 companies in retail, financial services, and manufacturing currently leverage Liquid Engines' software to help them assess and manage the tax impact of:
- Proposed business operational changes, such as mergers, acquisitions, and divestitures
- Legal entity rationalization and structure simplification
- Proposed audit settlements
- Changes in legislation
- Dividend planning and repatriation
- Foreign tax credits (FTC), earnings and profit (E&P), and net operating loss (NOL) utilization, both for filing purposes and for provision
- Diverse transfer-pricing strategies
“In the current business climate, our tax management and planning processes have to produce high-quality results in an extremely effective and efficient manner,” said Bob Montellione, vice president of state taxes at Prudential Financial, Inc. “We selected Liquid Engines because the application demonstrated robust tax modeling and analysis capabilities. What the application can do in a matter of weeks would instead take months of our tax department personnel’s time.”
“In the past, when trying to evaluate the impact of proposed entity restructurings, legislative changes, and other changes in business operations, we were limited to using spreadsheets. We were able to model only a handful of scenarios involving a small number of our legal entities in a limited number of jurisdictions,” said Karen Boyaris, state tax counsel at AON Corporation. “Liquid Engines now enables us to more quickly model very complex scenarios that take into account our entire entity structure and include forecast data. Using the system enables us to better serve the business and gives us greater confidence that we are making the right decisions based on all the right information.”
“In my estimation, every Fortune 1000 company needs Liquid Engines’ technology to master the complexities and challenges of international tax management and planning. The opportunities and benefits are large,” said Jim Fuller, partner at Fenwick & West LLP. “Minimizing taxes, repatriation planning, and tax and business coordination can all be enhanced with Liquid Engines’ technology.”
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