KPMG has published its 2005 Tax Department Survey:

KPMG’s 2005 Tax Department Survey identifies the critical factors driving tax department performance in the current environment, including Sarbanes-Oxley section 404 compliance, increased documentation requirements, complex internal reporting and data conversion, and ever-rising demands for accuracy and mitigation of tax-related risks.

Here is the Conclusion:

Increased workloads, expanded responsibilities, and continuing demands for faster and better tax reporting are driving many tax departments to become more efficient and effective. As reflected in the 2005 Tax Department Survey, tax departments are, by and large, focused on adapting to the changing marketplace and adopting the processes, tools, and practices required to effectively address compliance needs and manage tax-related risks.

During 2005 most tax departments continued efforts to augment key processes, including those related to S-O 404, FAS 109, transfer pricing, technology, and financial reporting requirements. Citing accurate and timely financial reporting, S-O 404 compliance, and tax return compliance as priority objectives for 2006, many tax departments plan to increase head count, consider third-party outsourcing, enhance training, and undertake additional improvements, including tax provision automation and process simplification.

The S-O 404 process—a major consideration for tax departments going forward— highlighted tax practices potentially contributing to corporate tax risk, such as over-reliance on manual spreadsheets. It also significantly increased the visibility of the tax function within the company and to its board and audit committee. Their increased risks and visibility notwithstanding, nearly three in four tax departments do not have a formal tax risk strategy.