Almost half of fast-growth chief executives surveyed expect a major increase in their company's business taxes over the next two years, according to PricewaterhouseCoopers.

Overall, an average increase of 18 percent in business taxes is expected over the next 12 to 24 months, according to the poll of 392 chief executives of privately held U.S. product and service companies with revenue/sales of $5 million to $150 million.

Some 46 percent of CEOs expect that their company's business taxes will increase by a substantial 40 percent, while 47 percent see them remaining about the same, 4 percent anticipate a decrease; and 3 percent didn't report. PwC said that the group anticipating the big increase is comprised of the fastest growers, who are expecting a 23.9 percent increase in revenues over the next 12 months -- 37 percent greater than all others.

Marty Janowiecki, tax partner in PwC's private company services practice, noted that some firms may see business taxes increasing because two significant tax breaks are about to end. The Foreign Sales Corporation status, judged illegal by the World Trade Organization, is about to be repealed. In addition, the bonus depreciation allowance, a tax incentive for capital spending projects, is set to expire at year-end.

Despite the expected changes in business taxes, tax planning hasn't received greater management attention. Twenty-four percent of CEOs polled report that corporate tax planning isn't at all integrated into their business plan for the next 12 to 24 months, and another 30 percent said that it's is only partially integrated. Nearly two-thirds (65 percent) say that their company hasn't increased the amount of time and effort spent on development and implementation of tax planning over the past two years.

What's more, PwC reported that 61 percent of CEOs weren't aware of Internal Revenue Service plans to increase audits of companies with assets of $10 million to $250 million over the next few years. When alerted to the initiative, 44 percent said that they expect the projected increase in audits over the next 12 to 24 months to cause companies like theirs to be more cautious and conservative in their tax planning; but 51 percent said that it would not. Five percent were uncertain.

Only 15 percent were aware of the related opportunity to jointly develop the scope of any new audit with the IRS at its commencement. Sixty-two percent of those surveyed believe that their present internal resources would be capable of co-developing a new audit's scope at the start, while 34 percent did not.

In total, 15 percent of the companies reported being audited by the IRS within the past five years, including 2 percent currently under audit. Incidence of audits was slightly higher among product sector businesses (18 percent versus 12 percent for service companies) and for technology businesses (17 percent, versus 12 percent for non-techs).

While a net 33 percent said that they wouldn't do anything differently, a third of the audited companies (5 percent) report that based on their experiences with the IRS, they would've done something different to manage the audit. Twenty-six percent said that they'd be better prepared; 18 percent said that they'd rely more on external accounting firm resources; 11 percent would've relied more on external legal counsel; 9 percent said that they would've dedicated additional internal resources; 4 percent would've accepted the IRS settlement earlier.

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