Can Your Tax Team Resolve Notices in Under 60 Days?
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Can Your Tax Team Resolve Notices in Under 60 Days?

13 February

Posted at 08:00h in by

Meet The New Industry Standard in Tax Operations

In the demanding world of tax operations, high-growth companies face a series of challenges that impact their ability to manage tax notices efficiently. As these companies scale, managing tax notice backlogs, navigating complex tax structures, and responding to notices across multiple jurisdictions become formidable tasks. Understanding industry benchmarks for notice resolution times, response efficiency, and compliance accuracy can offer valuable insights into improving tax operations—and that’s where leveraging platform data becomes essential.

 

For tax and compliance teams looking to improve their tax notice handling, benchmarks provide a window into what is achievable, helping them set realistic goals and recognize areas ripe for improvement. Data insights from NOTICENINJA’s platform reveal average industry metrics in notice resolution times, response rates by notice type, and trends in multi-jurisdictional tax compliance, providing a baseline against which tax departments can measure and optimize their own processes and overall visibility. Access to these data points can empower tax teams to transition from reactive to proactive management, creating a strategic advantage as companies grow. Here’s a look at the data to see how tax teams can improve—and even achieve the 60-Day Resolution Threshold.

 

 

82.8% of tax notices are resolved in over 91 days without automation.

 

Notice Closure Time by Days: Industry Averages and Opportunities for Improvement

A closer look at notice resolution times reveals significant room for improvement. While a small percentage of notices are resolved quickly—2.21% within 1-7 days and 1.32% within 8-14 days—the vast majority take much longer. For high-growth companies aiming to enhance efficiency, these benchmarks highlight the value of reducing timelines through automation.

 

For tax managers and CFOs evaluating options, this data emphasizes the need for solutions that can accelerate resolution times.

 

 

Companies can reduce this timeline by up to 35% with automation.

 

Benchmarking against this platform data can help companies identify if their notice resolution times are competitive. Insights derived from platform data are invaluable for companies seeking to make informed changes without the added burden of trial and error. By targeting notice resolution efficiency and time management, tax teams can shift focus from reacting to notices as they come to establishing a proactive approach, working toward industry-leading benchmarks for timely responses.

 

Industry Benchmarks for Notice Resolution by Notice Type

Not all tax notices are created equal, and understanding resolution benchmarks by notice type can guide tax departments in prioritizing cases that often take the longest to close. For high-growth companies, the knowledge of these variations in notice resolution times is a strategic asset. Knowing which types of notices typically demand the most time enables tax operations teams to allocate resources effectively and seek out the process adjustments or technology support that can make the most impact.

 

‘Refund Due’ notices can take up to 1,216 days to process without automation.

 

Multi-Jurisdictional Operations and Notice Timelines

Operating across multiple jurisdictions introduces additional complexities for tax teams, as they must navigate a web of diverse regulations and compliance requirements. Understanding these jurisdictional benchmarks allows tax operations teams to set reasonable expectations and optimize their response times based on the unique requirements of each agency.

 

For high-growth companies expanding into new regions, these benchmarks offer crucial insights into how tax notice resolution times might vary by location. By strategically addressing jurisdictions that demand the longest resolution times, companies can avoid compliance delays and better align with industry standards, ultimately ensuring a more agile tax operations process.

 

 

The IRS has one of the longest average resolution times, reaching up to 791 days.

 

Achieving Proactive Compliance with Real-Time Updates

Frequent regulatory changes are another driving factor behind prolonged notice resolution times. For industries like digital services, retail, and energy, which often face rapid changes in tax rules, real-time updates have become essential for staying compliant. Benchmark data from tax operations leaders shows that the ability to respond to regulatory changes in real-time can decrease the number of compliance errors and subsequent notices, helping companies move closer to industry benchmarks for proactive management.

 

“Benchmarks give tax teams the data-driven insights they need to see what’s possible, particularly as they look to shift from a reactive to a proactive approach. By leveraging platform data to inform their strategy, companies can approach tax notice management with greater confidence,” adds Pinkerman.

 

 

‘Statement of Adjustment’ notices are resolved in about 35 days.

 

Why Timely Notice Resolution Matters

The costs of delayed notice resolution extend beyond penalties and interest fees. Backlogs can tie up valuable resources, create inefficiencies, and even impact a company’s reputation. Industry benchmarks indicate that timely resolution is not only a best practice but a necessary component of a scalable, sustainable tax operations process. Companies that align their notice resolution timelines with industry standards can avoid these pitfalls and focus resources on growth.

 

Leveraging data to meet or exceed industry benchmarks can help tax teams transition from merely managing tax notices to optimizing their entire tax operations. Timely and efficient notice handling is crucial to creating a resilient tax function that supports a high-growth company’s broader objectives.

 

 

High-growth companies that reach a notice resolution timeline of under 60 days across jurisdictions and notice types are positioned to lead in their industry.

 

Set The Standard: Achieve 60-Day Tax Notice Resolution with Full Visibility

 

Is your team ready to lead the way in efficient, visible tax notice management? Achieving industry benchmarks starts with actionable data insights and strategic goal-setting. Establish a 60-day resolution threshold to reduce response times and gain unparalleled visibility across all jurisdictions. Empower your tax team to proactively manage notices, streamline compliance, and stay ahead of regulatory shifts.

 

Ready to transform your tax operations into a competitive advantage? Connect with us today to see how NOTICENINJA’s data-driven platform can help you meet and exceed industry benchmarks, setting a new standard in efficiency and compliance. To help you get there, leverage this tax notice resolution audit tool – how well will you score?

 

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