Welcome To The Tax Intelligence Report!

The June 2010 issue of the Tax Intelligence Report profiles the impressive tax career of Alex Biegert, Senior Vice President of Ticketmaster Entertainment in West Hollywood, California. This months interview has questions on transfer pricing and tax reporting. These are the questions tax executives of multinationals are faced with each day and it is important to gain the perspective of lead tax executives in different industries, including the entertainment industry. In fact, the entertainment industry has become very high tech as the result of the use of sophisticated software, in this case, to provide their services.
Alex Biegert is the type of tax executive that leaves you with an outstanding impression; he is intelligent, proactive, motivated, he has integrity, and he has outstanding interpersonal skills! Alex has gained his outstanding technical skills in a very complex international tax environment and this is why I chose him to interview this month.

All the best,
Kathleen Jennings
Editor, The Tax Intelligence Report
Kathleen@etsearch.com

Alex Biegert is Vice President Tax at Ticketmaster Entertainment in West Hollywood, CA. Ticketmaster is a1.5 Billion dollar US based publically-traded live entertainment ticketing, marketing and artist management company with operations in twenty countries throughout North America, Europe and Asia Pacific. Alex is the Senior Vice President, Tax responsible for the management of the global tax function, worldwide tax planning and strategy, and tax risk management. Prior to Ticketmaster, Alex was Vice President, Tax with IAC/InterActiveCorporation in the New York, NY/Oakland, CA and West Hollywood, CA locations. IAC is a 6 Billion US based publically-traded operator of leading online businesses including Expedia, Ticketmaster, Home Shopping Network, Ask, Match and Lending Tree with operations throughout North America, Europe and Asia Pacific. Prior to that, Alex Biegert was with Deloitte Touche from 1997 through 2004 and worked in the Los Angeles/Orange County, CA and Stamford, CT offices of this international Big Four public accounting firm.
Alex Biegert earned a BA in Economics and Political Science in 1995 and a Masters of Accounting in 1997 from the University of North Carolina at Chapel Hill, Chapel Hill, North Carolina. Alex is a Certified Public Accountant in California.

KJ- In your opinion, what is one of the most important issues a corporate tax executive will need to address in the current multinational tax environment?

AB- From my perspective, risk management in general has become more difficult for US multinationals. The technical complexities inherent in international tax, coupled with the SEC reporting environment and recent legislative focus on disclosure and informational reporting have heightened this risk. That said, I think that managing the approach to transfer pricing stands out as something specific that has become more complex in recent years. A number of countries have announced new enforcement initiatives and enhanced their documentation requirements in this area. It has become much more challenging to keep analysis and documentation current with the changing landscape.

KJ- How do you handle the many challenges associated with corporate transfer pricing?

AB- It starts with having a good understanding of the business, partnering with business leaders and appreciating the significance of transfer pricing from a local country perspective for the various jurisdictions affected by inter-company transactions. It is also important to understand the planning structures and other policy objectives that incorporate transfer pricing. The background is important for assessing risks and opportunities, and for maintaining an approach that effectively allocates resources.


KJ- What can you tell me about tax reporting and the PCAOB (Public Company Accounting Oversight Board?)

AB- The PCAOB was created by the Sarbanes-Oxley Act to oversee public company auditors. Their effect on tax departments is indirect in that they primarily interface with the audit firms. As auditors have gained experience with PCAOB reviews, they have incorporated that insight into their audit approach – particularly in the area of documentation. My experience has been that auditors have become more sensitive to how tax provisions are documented, particularly items involving judgment such as FIN 48 and valuation allowances.

KJ- What is a valuation allowance?

AB- US GAAP requires companies to evaluate deferred tax assets to determine whether they expect the tax benefit related to those assets to come to fruition in the future. To the extent that less than full benefit is expected, a company records a reserve or valuation allowance against a portion of that asset. GAAP provides a framework for making this determination, and sometimes the answer is clear-cut. But often there is significant judgment that goes into determining whether and to what extent to provide a valuation allowance. The SEC and PCAOB are focused on companies applying GAAP properly and consistently to ensure that they do not manage earnings through the income tax line - hence the renewed focus on documentation by auditors and the PCAOB.

KJ- What advice would you give someone stepping into this territory for the very first time?

AB- In assuming responsibility for financial reporting, I think the starting point is gaining a good understanding of the business and the broader tax profile. This is essential for assessing where potential areas of risk exist. I also think that it is important to make sure that there are strong processes in place to control balance sheet tax accounts. This includes evaluating the capabilities of resources throughout the organization – including where non-tax professionals are significant to the process.

KJ- How significant is the reliance on non-tax professionals in your financial reporting process?

AB- It is meaningful in that we do business in 20 countries and have only maintained fully dedicated tax resources in the U.S. As a result, foreign accounting and finance professionals have played an important role in our global tax reporting process.

KJ- How do you coordinate all of the information effectively between twenty countries?

AB- We spent a lot of time training foreign finance professionals in our process and we have tried to apply that process consistently. We also dedicate significant time in the US to analyzing foreign tax accounts on a monthly basis to ensure the tax accounting is correct. This typically gives the tax reporting team the opportunity to stay close to developments in foreign jurisdictions and resolve potential issues outside of the quarterly reporting cycle.

KJ- I often hear people tell me of the crunch time in tax reporting. Can you tell me what it is really like?

AB- I have heard the expression as well and I suspect people are referring to the time between the closing of the books for pre-tax income and when tax entries need to be completed to facilitate an earnings release or SEC reporting. The events that tax cannot control in quarterly reporting – such as accounting timing and external reporting deadlines – place a lot of pressure on tax. That said, the tax group does control the timing of many workflows that affect its quarterly reporting, and we can reduce the intensity of “crunch time” by being more strategic about how we use the weeks leading up to a close.

KJ- Can you provide a specific example of an item that could enable the tax function to improve its time management in tax reporting?

AB- We have had success accelerating a number of items out of the traditional close period to smooth out the workflow. We have found it helpful to get our auditors involved early in discussing issues for the quarter. This generally makes the audit flow much more smoothly. In terms of the internal process, we accelerate analysis of the projected annual effective tax rate and the identification of discrete items in interim periods. At year-end, we typically accelerate analysis related to our smaller businesses by building calculations around 11 months actual results and 1 month forecast. Depending on how close the final month actual is to forecast, we refine the analysis after year-end, but usually we are able to go with our initial estimates. As we touched on earlier, we also find that monthly maintenance controls around the tax balance sheet helps offload the crunch in peak periods. The time we gain by accelerating work out of the close enables us to focus more effectively on risk before finalizing our numbers.


Alex, thank you for taking the time to answer our questions. Your perspective is valuable to the Tax Intelligence Report readers around the world and we genuinely appreciate the time you gave to share your experience.

Kathleen Jennings (KJ)
Editor, The Tax Intelligence Report
President, ET Search, Inc.
Kathleen@etsearch.com

Alex Biegert (AB)
Vice President Tax
Ticketmaster Entertainment
West Hollywood, CA
Alex.Biegert@Ticketmaster.com

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