[smith65]

If I could do it all over again, I would not have gone into tax accounting.

I gathered my accounting undergraduate degree with the idea that I would be an accountant in public industry, either tax or audit. I decided I enjoyed the flexibility of tax accounting because you can work anywhere (ie, home) and auditors have to travel to places I wouldn’t ever voluntary go (ie, count wood in a warehouse in the middle of nowhere). I opted to get a MST, Master’s degree in taxation as my 5th year of higher education, required by my licensing state’s board of accountancy. If I knew then what I know now, I would have gone after the MAAC, Master’s degree in Accounting.

First and foremost, the biggest problem for tax accountants is the lack of industry/private job opportunities. There is a plethora of public accounting positions for tax, but that entails working like a mad man six months a year (six months if you’re lucky; my fellow former KPMG employee worked year round 80+ hour weeks). For every industry tax accounting position, there are easily ten internal auditing/cyclical financial accounting positions. That’s not an exaggeration or hyperbole. If you want to escape public accounting, cyclical accounting and auditing is the way to go. Most people who escape public accounting take their work/life balance very seriously and enjoy a significantly lower number of hours in the office once in industry; there is an understanding amongst all accountants who leave public accounting and enter private accounting that they will not work the insane hours they were once forced into. If you want one of the rare tax positions you will have to work for a large corporation who is actually substantial enough to bring a tax team in house, as opposed to shopping out the work to a public firm which gets the job done in a timely fashion and includes a certain amount of insurance if a tax return is found to be incorrect in case of audit. Where do all these large corporations exist? They exist in massive cities with high living expenses. You won’t find many tax accounting positions in cities with less than 500,000 in population. If your city doesn’t have a major sports team located there, likely you will not find a private tax position there (of course, there are exceptions). Accounting positions with high level financial needs exist in every town in America, but tax positions do not exist in small towns.

Oh, and if you do stumble upon a private tax position in your town it will likely require one of two skill sets. The first is ASC 740 Accounting for Income Tax skillset and the other is State and Local tax skill set. Why is that important you ask? If you work at a smaller firm that is NOT the big 4, you will likely not have a chance to practice corporate provision (ASC 740) work nor will you likely be able to consistently be able to practice consolidated state and local tax work which involves complex nexus issues. The vast majority of this work is farmed out to public accountants in the big 4 firms. I worked for the 5th largest firm in the U.S. in a relatively large city and was begging to get more corporate work and state work. I got some consolidated state work which made me a hot prospect, but never picked up any ASC 740 work. Provision work and quarterly estimates related to ASC 740 is one of the best ways to get out of public accounting but it is genuinely hard to find if you are at a smaller, non big 4, firm.

It’s too easy to get stuck in public accounting if you are a tax accountant, mainly for the lack of jobs and difficult skillset required to exit. For those two reasons alone, you should seriously consider auditing in you enter public accounting.

If that’s not enough, here’s a few more reasons to enter accounting as an auditor, as opposed to a tax accountant.

The transition from a public auditor to a private accountant is very common and well accepted within the industry. If you have taken part in an audit and understand a company’s basic accounting system and you have proven to be a decent auditor/accountant, you’ve got a leg up on any open position at the client you are working on. Chances are there will be a position available in the accounting department which you will qualify for; the position might be considered entry level but with a CPA license and a half a year of audit experience you’ve already got a big head start on the rest of the competition (Staff accountant Sr Accountant  Assistant Controller  Controller  Vice President of Finance, etc.) Case and point, my fellow former audit coworker at my firm only lasted six months before she was fired from the firm. Seven days later she was at a nice, cushy internal accounting position for one of the most respected Pacific Northwest companies we have to offer. She cut her working hours in half and doubled her pay and was on the fast track to a senior internal auditor role which let her travel the world (to places you would actually want to go). Yet there I was, stuck in Tax. I’m happy for her as she really needed to get away from the firm to devote time to her child.

Tax accountants and auditors both have billable hour goals they strive to achieve every year. Depending on the size of your firm (Big 4= 2200-2400 vs Regional Midsize Firm= 1650-1900) you will have varying hours expected to work. Work means billable hours; partners couldn’t care less if you come to work and sit on your rear end browsing Facebook. Billable hours are obsessively monitored and is considered the lifeblood statistic for public accounting (profitability per FTE is also extremely important). My point is that billable hours are stressful and many. For tax accountants, there are no easy billable hours; you are sitting in your chair focusing intently for hours on a single client attempting to resolve their issues and put all the puzzle pieces together, even if they don’t give you all the pieces you need to complete the puzzle. Auditors, on the other hand, have the benefit of picking up a decent amount of their hours traveling. One of my fellow former auditor coworkers admitted that he picks up a decent amount of his billable hours commuting to and from his place of audit; he is on the clock as soon as he leaves his driveway. When I told him that tax accountants don’t have the benefit of picking up those easy hours he admitted how stress free some of his hours were. There are no easy billable hours in tax accounting, unfortunately.

Speaking of missing puzzle pieces, tax accountants frequently don’t receive all the information needed to complete their work on each client but partners take pride in only contacting tax clients once. If there is a hole in equity, you have to figure out and infer a significant amount of information from limited data. Auditors, on the other hand, can make many requests for information; they can’t sign off on the unqualified opinion if they don’t feel confident in their information. There’s an understanding from the accounting department under audit that they need to bend over backwards to assist auditors in everything they need. Tax accountants don’t enjoy this benefit. Tax accountants have the burden of receiving limited information to create a complex tax filing which may generate a tax liability which angers the client. When I wanted to contact a client, I would almost always have to go through a director for permission and most of my requests were denied; we had a “just get it done with what you have” mentality.

That’s my rant for the day. It’s free advice, if you want it. Sorry if it is a rough read with crappy grammar…rushed through it.

I would be curious to hear any dissenting opinions.

Good luck out there.

[taxman89]

update for lindrobe. I work for a large manuf. company

mayo….sox work is easily the most boring work i have come across…and that included working at my university cafeteria lol

Aud-75 3x I knew i never liked you
Bec-77 1x being in the bubble is stressful
Reg-82 4x its not me its you...and no we cant be friends
Far-78 1x easiest section

[lancebvs]

The issue is that if a CPA has a goal to one day not work for a boss and run his/her own business, tax would be the way to go (usually). It would be very difficult to do audits as a one person operation. I can't even comprehend how that would work.

Of course this is not to say tax is the only way you can be a sole proprietor. I have heard of people that do just business valuations or just consulting (which is still usually somewhat related to accounting).

[lancebvs]

The issue is that if a CPA has a goal to one day not work for a boss and run his/her own business, tax would be the way to go (usually). It would be very difficult to do audits as a one person operation. I can't even comprehend how that would work.

Of course this is not to say tax is the only way you can be a sole proprietor. I have heard of people that do just business valuations or just consulting (which is still usually somewhat related to accounting).

[005]

Noted, thanks.

BEC - ✔
REG - ✔
AUD - ✔
FAR - 11/29/14

CPAExcel, Ninja MCQs, and a sh*t ton of coffee

[Isostasy]

And preparing taxes ALL day is sooo boring! I've worked in two offices like this and seriously you could hear a pin drop, no one really talks. It sucks the life out of you! I'm glad I worked for a small firm that had me doing taxes, payroll, bookkeeping and other projects because I feel that I can really help a small business owner with any problem they have. Had I just focused on taxes then it would probably be harder to get a small business owner as a client if I couldn't help them with the other basics like payroll or incorporating their business .

But seriously I don't see how people stay in public accounting firms doing taxes for years, I would rather take a paycut and start at the bottom in another place than do this for much longer. I wanted to get more experience before I went on my own but thats not gonna happen! I'm just gonna start with basic returns and go from there.

[Skynet]

Challenge Accepted!

[ahugemistake]

My friend might be referring me to a tax position at a Big 4 and this post just scared me to death. I would prefer the auditing route but have tax experience that I want to use to get into a Big 4. I hope I can later switch departments and go into auditing.

FAR - 78*
AUD - 66, 79
REG - 73, 76
BEC - 79

[taxman89]

@ahugemistake dont let it scare you. it is just one person projecting his individual perception onto every possible situation. I work in tax (and didnt even work for a big 4). the city i live near is a midsize/smaller big city and there is a huge demand for tax accountants/specialists. The company i work for has a fairly large in house tax dept and there are many other companies in the city that also do. In my experience (see how i qualify that and dont pretend it applies to everyone) tax specialists get paid more than audit specialists or accounting specialist. Basically if you want to go into corporate tax then working at a big 4 and moving into industry is a great route, just do a little research to make sure you have companies in our city that would hire tax specialist (something it appears is lacking in OP's hometown). If you want to get into Audit i would think getting your foot in the door to a big 4 regardless would still be a good path.

Aud-75 3x I knew i never liked you
Bec-77 1x being in the bubble is stressful
Reg-82 4x its not me its you...and no we cant be friends
Far-78 1x easiest section

[smith65]

“@ahugemistake dont let it scare you. it is just one person projecting his individual perception onto every possible situation.”

Admittedly, I gave the benefit of the doubt to the reader and assumed that he/she would be able to interpret this as my own experience, not the only plausible outcome for a tax accountant. Additionally, I explicitly stated, “I suppose my rant definitely isn't a one size fits all…..” in a previous post. Most folks studying for the CPA exam are intelligent enough to realize that there are exceptions to the rule.

I still feel that the rule of thumb is that tax accounting offers a difficult exit from the public accounting world. I have a friend who is a tax manager at a large firm and is one of the best tax accountants I know; he is having an extremely difficult time exiting the public world. Most tax accountants on track to a junior partnership by their early thirties shouldn’t have trouble finding corporate tax work. He’s a great tax accountant and extremely easy to work with (super gregarious dude). Along with him, a lot of my friends at my old firm who have years of experience couldn’t exit into tax positions and made a career change just to escape public accounting. They’re all great tax accountants but don’t have the niche most corporations are looking for.

Taxman makes a good point about compensation though; tax accountants do generally get paid more than cyclical financial accountants, internal auditors, SOX compliance folks. I would expect an upper level financial accounting position to fetch at least $60,000 coming out of public accounting while a lot of the tax folks who exit hit $80,000 coming out of public accounting; it seems like that gap has the potential to grow as seniority climbs. Tax managers at corporations do just fine for themselves (somebody above mentioned they were paid more than the CFO/Controller as a tax managier in a post above). But that leads to the question: are you are willing to risk that one tax job which has higher pay in the long run and turn your back on the ten financial accounting positions which have solid pay and great stability with an easy transition from public accounting to private accounting?

@hugemistake, a tax position at a Big 4 isn’t a bad opportunity at all. Big 4 is what most hiring corporations desire. Just be wary of getting pushed into the Tax Credit Research and Development department, or something similar which doesn’t allow you access to a well-rounded understanding of corporate income tax and the debits/credits that go along with it. Big 4 does a great job of compartmentalizing their accountants (think Henry Ford and the assembly line). BIG 4 accountants are great at one or two things but don’t practice a wide breadth of areas (1040, 1041, 1065, 1120S, 990, Gift/Estate). It’s hard enough to get into the Big 4, but there is competition just to get to the corporate tax accounting department; most folks know it’s their best way out

[MintsRGood]

@ahugemistake No no, noooooooo, do not let this thread spook you out!!!! This thread represents a handful of opinions from folks who aren't crazy about tax in the first place. While everyone is 100% entitled to their opinions, keep in mind that it's based on their experience alone and won't mean the same thing for you. If you land the big 4 tax position, you may love it! You'll never know unless you try. @taxman89 is correct that big 4 experience of any type will open doors down the road if you want to make the switch later on!

REG: 75 DONE 🙂
AUD: 61, 71, 68, 92 DONE 🙂
BEC: 76 DONE 🙂
FAR: 72, 74, 79 DONE 🙂
Licensed Michigan CPA 🙂
-Some people dream of success...others wake up and work hard for it!!!
-The cowards never start and the weak die along the way!
-You better work, b***h!
-Only those who dare to fail greatly can ever achieve greatly.-JFK

[ommytror]

Audit: More likely to get you a private accounting job. You will have more options to pick from and generally be perceived as having a stronger “accounting” background.

Tax: Your average salary will be higher but it will be harder to exit, especially as you rise in the ranks. Harder to transition into internal accounting positions that aren't tax specific.

I've worked for 4 different accounting firms (counting internships) and at one firm we had a joke that people who left the audit department became controllers and people who left the tax department became assistant controllers.

The first problem is that Senior Accountant positions outnumber Tax Senior positions significantly but as you rise to manager the situation becomes even worse. The second problem is that if you decide you no longer want to do tax work you often have to fight the presumption that you don't know financial accounting very well. The frustrating part about this is that often, in my experience at the various firm the tax staff and seniors do a lot of bookkeeping and other clean-up work in order to prepare the tax return and have very strong accounting skills.

Your mileage may vary but I would be shocked if anyone said auditing didn't give you more options. So my advice to new accountants is that if you plan to stay in public a few years and then get out definitely go audit. If you want to stay in public long enough to become partner then choose whichever path really interests you more. If you want to end up in corporate tax (non-public accounting) then public may still be the best idea.

[Anonymous]

I knew my debits and credits better than the auditors…yet they were the experts somehow.

[Author]

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