Bloomberg Tax caught up with Alix Dowling, vice president of global tax at multinational food processing company Archer Daniels Midland Co., to chat about how the coronavirus pandemic has changed the way her team has—and continues—to adapt to a new normal.
Based in the Chicago area, Dowling has been in her present role for the last two years. Prior to her in-house role, she was an attorney for law firm Jenner & Block in Chicago until 2014.
Bloomberg Tax: How has working from home been challenging for Archer Daniels Midland’s tax team?
Dowling: It’s been challenging because there are so many unknowns about the future. Sheltering in place happened so quickly that people didn’t have much time to prepare.
Other than signing tax returns, collecting mail, and a few other similar tasks, we’re able to be fully operational remotely. And even when our systems or processes are not all that strong, people have come up with creative solutions to get the necessary tasks accomplished.
Bloomberg Tax: Can you give me an example of one of those creative solutions?
Dowling: The things that I’m thinking about are on the technology side. There are ways that we can use data that we have that we hadn’t been using before. We’ve also changed some of the cadence of our communication with people outside of our department to get too close, effectively, so knowing that there are certain gaps that we run into but maybe are less significant when we are in person. We are trying to see around the corners and anticipate those problems by setting up regular meetings now, so that those gaps don’t happen.
Bloomberg Tax: How have communications been with tax authorities abroad and the IRS here in the U.S.? Have they been responsive or is it more difficult to get the answers you need when you need them?
Dowling: It’s been a mix. So in some places, Brazil, Asia, Africa, our audits have continued at a normal pace, sometimes even by video chat, which is a little unexpected. That’s a new thing for us. Some audits are going as normal. In some places, and we’ve seen this a lot in Europe, where there are stricter rules about tax authority employees working off-site or via mobile phone due to concerns about protecting taxpayer data, audits have slowed.
The U.S. has been uneven. Our tax team—we’re in the Compliance Assurance Program (CAP)—has been great, but the large corporation unit within the regular IRS has been a bit less responsive. Although CAP team often helps us facilitate those difficulties, those issues.
I think it’s really a range depending on where a country’s privacy laws fit and sort of what their capabilities are. However, even for countries that are currently quiet, we’re preparing for a season of difficult audits ahead. We recognize that Covid has put a lot of fiscal pressure on countries, and as a large multinational, we anticipate that we will be a target for increased audits in the future.
Bloomberg Tax: The IRS is expected to release a lot of rules and guidance this year, especially with respect to the 2017 tax law and even more with the latest relief package. What are the top items you’re anticipating?
Dowling: A lot of that guidance doesn’t impact us. But we’re still waiting for some additional guidance on the transition tax, and we’re waiting for some guidance on FTCs (foreign tax credits).
Bloomberg Tax: Are you confident that you’ll get that guidance this year given the workload and current working environment the IRS is under?
Dowling: I’m fairly confident that we will get most of what we need in the next several months or maybe a rolling year, but we’ve been living with uncertainty for a while and making reasonable approaches and are fairly confident that the choices that we’re making, the positions that we’re taking are good ones. So I don’t think it’s going to impact our planning too significantly because I think we’re in line with where the guidance is going to come out.
Just to add: We are not a taxpayer that looks in the cushions for every possible, extremely aggressive position that can be taken. In our experience, that’s typically unavailing. So even in the CARES Act discussions, there were a lot of positions that people considered taking that we heard from multiple providers were reasonable positions. And we adopted a wait-and-see approach, and then IRS guidance came out and said, ‘that doesn’t work.’ So trying to make long-term sustainable choices about approaches that we take.
Bloomberg Tax: What challenges do you deal with on a day-to-day basis, both excluding and including coronavirus circumstances?
Dowling: We have a great team and they’re very proactive and interested in change. We’ve made a lot of changes both within the department and within our priorities over the past few years. And that’s really a testament to their flexibility and interest in growth. Covid has been a great revealer of places where our processes can be improved. And I think everybody recognizes that and understands that, that there’s more opportunity there.
The tax department is very aligned with our company’s strategies of simplification and bringing long-term, bottom-line value to the company. The challenge is to stay close with the business and be a good partner in identifying, but more importantly, executing planning strategies that work with the business. And so that’s I think, one of the challenges we have is making that happen in a seamless, successful way.
Bloomberg Tax: You mentioned that the pandemic has revealed some processes could be improved. Can you elaborate?
Dowling: Sure. We have some manual signature-sort of relics from when that was what how everything was done. That’s something that we think we can change. Another thing would be streamlining the number of people who need to sign so that you aren’t chasing 12 people when you could just look to three.
Bloomberg Tax: Anything else you’d like to add?
Dowling: This is a difficult time, this is a stressful time. But it is also a good opportunity to really practice those tools that we all have to do our best work, because although we all know, it’s important to prioritize, and we all know it’s important to think outside the box, and we all know it’s important to hone our written communication skill and make sure that we’re delivering the message we need to deliver. It’s easy to let that go and to not emphasize that enough.
And that’s not an option if you want to be successful right now. And so I think there are some real positives to having your routine upended.
I think that the team that I have, that I work with, will come out stronger, because they are working on their communication skills. They are working on prioritizing. They are working on making sure that what they are doing moves the needle for the company, for whatever strategic objective they’re pursuing. And I think that’s a good thing.