Why Energy Tax Advisory Adds Value to Back-Office Outsourcing Clients (Part 1)
(This is the first of a three-part series highlighting how Energy Tax Advisory services add value to back-office outsourcing clients.)
By Jeff Borchers and Lynn Loden
As the oil and gas industry continues to maintain its sharp focus on reducing or maintaining current cost structures—even as oil prices continue to recover from a four-year slump—oil and gas outsourcing has proven to be an effective and reliable service that offers a host of benefits, including predictable cost stream, increased quality of transactional and financial reporting, reduced headcount and improved efficiency, to name a few.
Simply put: outsourcing is a proactive way to derive a higher output from a company’s assets. It also defends against risks and creates more potential for success.
In addition to outsourcing, Opportune’s Energy Tax Advisory practice offers integrated solutions for outsourcing clients such as tax compliance, accounting for income taxes under ASC 740, and critical tax planning for energy companies in ever-changing markets and structures. Integrating tax with Opportune’s outsourcing service puts oil and gas consulting firms at a competitive advantage over audit firms, including the Big 4, as outsourcing firms have access to and are deep into the data to prepare a tax return or income tax provision and recognize tax planning opportunities on a real-time basis, rather than after the audit is being performed. Additionally, Opportune Energy Tax Advisory can provide integrated accounting for income tax and tax compliance services that avoid attest-related scope limitations.
Among the various tax solutions Opportune Energy Tax Advisory can provide to outsourcing clients include:
- Federal and state income tax return preparation
- Foreign withholding analysis, form preparation and payments to tax authorities
- State apportionment determinations and computations
- Estimated tax payment projections
- Book and tax depreciation, depletion and amortization reconciliations
- Oil and gas property management (IRC Section 614)
- Cost and percentage depletion calculations
- Original issue account determinations and computations
- Tax representation on federal and state income tax audits
- Work with legal counsel on transaction design and structuring
- Targeted capital account/tax distribution modeling
- Debt/Equity and conversion effect tax analysis
- Intangible drilling cost (IDC) identification and optimization
Financial Reporting Under ASC 740
- Tax provision preparation under ASC 740 for corporate entities and for partnerships with entity level income taxes
- Preparation of management documentation for external audit support and responses to SEC comments for public and private entities
Opportune Energy Tax Advisory has professionals who have worked in industry as well as “Big 4” firms and can give your company practical, yet sophisticated tax assistance. Being integrated with the accounting outsourcing process will provide synergies that will lead to cost savings, as well as risk mitigation.
About the Authors:
Lynn Loden is a Managing Director in charge of Transaction Services and Energy Tax Advisory for Opportune. He has over 30 years of corporate tax and accounting experience with Big Five public accounting and similar professional services firms. Prior to joining Opportune, Lynn served clients in both relationship and specialty roles ultimately as a partner at Arthur Andersen and Deloitte, and as a Managing Director at Alvarez & Marsal. He has advised both public and private companies in the oil and gas, oilfield service, public utility and service industries. Lynn has significant experience in mergers and acquisitions, roll-ups, spin-offs, IPOs, lease and project finance, and troubled debt restructurings and bankruptcies. His assignments include engagement and transactional responsibility for tax planning and compliance matters, accounting for income taxes, leases, transactional due diligence, representation before the Internal Revenue Service national office for ruling requests, valuation engagements and expert testimony before bankruptcy and other courts. Lynn was a panelist before the FIN 48 working group at FASB, and has been a frequent presenter on contemporary tax and accounting topics before groups such as the Houston Bar Association, the Oklahoma Statue University Oil & Gas Accounting Conference, the AICPA Energy Conference, the Tax Executives Institute, the University of Mississippi Accountancy Program, and accounting firm internal firm wide technical training. He was a member of firm wide teams specializing in Subchapter C (corporate taxation), leasing and ASC Topic 740 at Andersen. He received his B.B.A. in accountancy from the University of Mississippi, and became a Certified Public Accountant in 1979. Lynn is a member of the American Institute of Certified Public Accountants and holds active CPA licenses in the states of Mississippi and Texas.