Tax Compliance Analysis Complete

• Legal entity structure (parent, subsidiaries, disregarded entities, JVs)
• Entity classification (C-corp, S-corp, partnership, LLC, single-member LLC)
• Consolidated filing groups (federal, state combined/unitary)
• International entity structure (CFCs, branches, PEs)
• Tax year-end by entity (calendar, fiscal, 52/53-week)
• Intercompany relationships and transaction flows

Step 1.3 -- Tax Type Coverage

Identify tax types managed:

• Federal income tax (IRC compliance)
• State and local income/franchise tax
• Sales and use tax
• Property tax (real and personal)
• Payroll tax (federal, state, local)
• International tax (foreign income, withholding, VAT/GST)
• Excise tax and industry-specific taxes
• Unclaimed property / escheatment

============================================================ PHASE 2: NEXUS AND FILING REQUIREMENTS

Step 2.1 -- Nexus Determination

Analyze nexus tracking:

• Physical nexus factors (office, warehouse, employees, inventory, equipment)
• Economic nexus thresholds (Wayfair: revenue and/or transaction count by state)
• Factor presence nexus for income tax
• Nexus study documentation and methodology
• Nexus tracking system (automated monitoring vs periodic manual review)
• New state entry notification and registration workflow
• P.L. 86-272 protection analysis for income tax nexus

Step 2.2 -- Filing Requirement Management

Evaluate filing obligation tracking:

• Filing requirement database (jurisdiction, tax type, frequency, due date)
• Registration status by jurisdiction (registered, pending, not yet required)
• Filing calendar with deadlines, extensions, and estimated payment dates
• Voluntary disclosure agreement (VDA) tracking for past exposure
• State annual report and franchise fee filings
• Registered agent management across jurisdictions

Step 2.3 -- Sales and Use Tax Compliance

If sales tax applies:

• Product/service taxability matrix by jurisdiction
• Exemption certificate management (collection, validation, expiration)
• Use tax self-assessment process for non-taxed purchases
• Marketplace facilitator compliance (Amazon, eBay, Etsy reporting)
• Sales tax return preparation and reconciliation to GL
• Rate accuracy (combined state, county, city, special district rates)
• Audit defense readiness (transaction-level detail, exemption documentation)

============================================================ PHASE 3: INCOME TAX COMPLIANCE

Step 3.1 -- Federal Income Tax

Evaluate federal tax compliance:

• Book-to-tax adjustment tracking (permanent, temporary differences)
• Depreciation methods (MACRS, Section 179, bonus depreciation)
• Net operating loss (NOL) tracking and utilization
• Tax credit computation (R&D credit, WOTC, energy credits)
• Estimated tax payment calculation and safe harbor compliance
• Form preparation readiness (1120, 1120-S, 1065, related schedules)
• Schedule M-1/M-3 reconciliation automation

Step 3.2 -- State Income Tax

Analyze state tax compliance:

• Apportionment methodology by state (3-factor, single-factor sales, market-based)
• State-specific modifications (additions, subtractions to federal taxable income)
• State NOL rules (carryforward periods, limitations, separate vs combined)
• State tax credit tracking (investment, jobs, research, film)
• Combined/unitary filing group determination
• PTE (pass-through entity) tax elections where applicable
• State estimated payment and extension management

Step 3.3 -- International Tax

If international operations exist:

• Controlled Foreign Corporation (CFC) and Subpart F income computation
• Global Intangible Low-Taxed Income (GILTI) calculation
• Foreign Derived Intangible Income (FDII) deduction
• Foreign tax credit computation and limitation (Section 904)
• BEAT (Base Erosion and Anti-Abuse Tax) analysis
• Country-by-country reporting (OECD BEPS Action 13)
• Treaty benefit application and documentation
• Withholding tax compliance on cross-border payments

============================================================ PHASE 4: TAX PROVISION (ASC 740)

Step 4.1 -- Current Tax Provision

Evaluate the current provision process:

• Effective tax rate (ETR) calculation methodology
• Book income starting point and permanent/temporary difference identification
• State tax provision (apportioned income, blended state rate)
• Foreign provision (local country provision, US inclusion)
• Current provision journal entry automation
• Tax account reconciliation (provision to return true-up)

Step 4.2 -- Deferred Tax Accounting

Analyze deferred tax asset/liability management:

• Deferred tax inventory (all temporary differences cataloged)
• Deferred tax balance roll-forward
• Valuation allowance assessment (ASC 740-10-30: more-likely-than-not)
• Tax rate selection for deferred tax measurement (enacted rate, graduated)
• Deferred tax presentation (current guidance: all non-current)
• Intraperiod allocation (continuing operations, OCI, equity)

Step 4.3 -- Uncertain Tax Positions (FIN 48 / ASC 740-10)

Check UTP management:

• Tax position inventory (all positions with uncertainty)
• Two-step analysis: recognition (more-likely-than-not) and measurement (largest amount > 50%)
• Interest and penalty accrual calculation
• Statute of limitations tracking by position and jurisdiction
• Disclosure requirements (tabular rollforward, unrecognized benefits)
• Annual reassessment process and trigger events

============================================================ PHASE 5: TRANSFER PRICING

Step 5.1 -- Intercompany Transaction Analysis

If intercompany transactions exist:

• Transaction types: goods, services, IP licensing, financing, cost-sharing
• Pricing methodology by transaction type (CUP, TNMM, profit split, cost-plus, resale)
• Arm's length range determination and benchmark studies
• Intercompany agreement documentation
• Year-end adjustments and compensating adjustments
• Advance pricing agreement (APA) status

Step 5.2 -- Transfer Pricing Documentation

Evaluate TP documentation compliance:

• Master file (MF) preparation per OECD guidelines
• Local file (LF) for each jurisdiction requiring documentation
• Country-by-Country Report (CbCR) filing (Form 8975)
• Economic analysis and comparability studies
• Documentation contemporaneous with filing (Section 6662(e) penalty protection)
• Documentation update cadence (annual, every 3 years for benchmarks)

Step 5.3 -- OECD BEPS Compliance

Check BEPS pillar compliance:

• Pillar One (reallocation of taxing rights) impact assessment
• Pillar Two (global minimum tax 15%) modeling
• GloBE rules: Income Inclusion Rule (IIR), Undertaxed Profits Rule (UTPR)
• Qualified Domestic Minimum Top-Up Tax (QDMTT)
• Transitional safe harbors (CbCR safe harbor)
• US CAMT (Corporate Alternative Minimum Tax) interaction

============================================================ PHASE 6: TAX CALENDAR AND PROCESS MANAGEMENT

Step 6.1 -- Filing Calendar Management

Evaluate tax calendar operations:

• Comprehensive calendar across all tax types and jurisdictions
• Extension filing tracking and deadline management
• Estimated payment scheduling and cash flow planning
• Amended return tracking and processing
• IRS and state notice management and response tracking
• Statute of limitations calendar for open tax years

Step 6.2 -- Process Controls

Check tax process governance:

• Tax close checklist and sign-off procedures
• Review and approval workflow (preparer, reviewer, CPA firm)
• Reconciliation of tax returns to provision (return-to-provision true-up)
• Data validation and quality checks before filing
• E-filing and acknowledgment tracking
• Retention of supporting workpapers and documentation

Step 6.3 -- Tax Audit Management

Evaluate audit readiness:

• IRS and state audit tracking (open audits, statute years)
• Information Document Request (IDR) management workflow
• Audit defense documentation organization
• Settlement authority and escalation procedures
• Audit reserve adequacy assessment
• Appeals and litigation tracking

============================================================ PHASE 7: WRITE REPORT

Write analysis to docs/tax-compliance-analysis.md (create docs/ if needed).

Include: Executive Summary, Tax System Architecture, Nexus Analysis, Income Tax Compliance, Sales Tax Compliance, Tax Provision Assessment, Transfer Pricing, Process Management, and Prioritized Recommendations.

============================================================ SELF-HEALING VALIDATION (max 2 iterations)

After producing output, validate data quality and completeness:

1. Verify all output sections have substantive content (not just headers).
2. Verify every finding references a specific file, code location, or data point.
3. Verify recommendations are actionable and evidence-based.
4. If the analysis consumed insufficient data (empty directories, missing configs), note data gaps and attempt alternative discovery methods.

IF VALIDATION FAILS:

• Identify which sections are incomplete or lack evidence
• Re-analyze the deficient areas with expanded search patterns
• Repeat up to 2 iterations

IF STILL INCOMPLETE after 2 iterations:

• Flag specific gaps in the output
• Note what data would be needed to complete the analysis

============================================================ OUTPUT

Tax Compliance Analysis Complete

• Report: docs/tax-compliance-analysis.md
• Jurisdictions analyzed: [count]
• Tax types covered: [count]
• Filing obligations tracked: [count]
• Compliance gaps identified: [count]

Summary Table

Compliance Risk Matrix

NEXT STEPS:

• "Run /bookkeeping-automation to verify GL data quality feeding tax calculations."
• "Run /audit-support to prepare for IRS or state examination."
• "Run /reconciliation to audit tax account reconciliations and provision-to-return true-ups."

DO NOT:

• Do NOT provide specific tax advice or opinions -- identify compliance gaps for tax professionals.
• Do NOT ignore state and local tax -- SALT exposure often exceeds federal risk for multi-state businesses.
• Do NOT skip nexus analysis -- unregistered filing obligations create penalty and interest exposure.
• Do NOT assume transfer pricing documentation is current -- stale benchmarks create penalty risk.
• Do NOT overlook estimated payment compliance -- underpayment penalties are avoidable and expensive.

============================================================ SELF-EVOLUTION TELEMETRY

After producing output, record execution metadata for the /evolve pipeline.

Check if a project memory directory exists:

• Look for the project path in ~/.claude/projects/
• If found, append to skill-telemetry.md in that memory directory

Entry format:

### /tax-compliance — {{YYYY-MM-DD}}
- Outcome: {{SUCCESS | PARTIAL | FAILED}}
- Self-healed: {{yes — what was healed | no}}
- Iterations used: {{N}} / {{N max}}
- Bottleneck: {{phase that struggled or "none"}}
- Suggestion: {{one-line improvement idea for /evolve, or "none"}}

Only log if the memory directory exists. Skip silently if not found. Keep entries concise — /evolve will parse these for skill improvement signals.