Tax Advisory Revenues Dropped Last Year

By:
Chris Gaetano
Published Date:
Jan 12, 2021
While robust demand remains for tax advisory services, a recent report nonetheless says that the revenues they generated dropped in 2020, according to Accounting Today. The report, by Source Global Research, said that worldwide revenues from tax advisory services fell by 9 percent—$3 billion—due to the pandemic; within the United States. specifically, revenues from these services are down by 13 percent. Despite this decline, the report estimates that 2021 will see a recovery of about 7 percent.

Of the sub-specialties hit particularly hard, M&A tax advisory seems to have gotten the worst of it, declining by 21 percent last year; conversely, compliant-related advisory work, while not unscathed, saw a relatively small 5 percent decline, supported by demand for help in taking advantage of government support programs.

The report said the pandemic was the reason for the decline. Not only did companies have less money to spend on advisory services, but they also tried to resolve their issues in house rather than hiring outside experts, presumably as a way to save money. This trend reversed itself later in the year, though, as many companies struggled to address their tax problems without help, and returned to their firms.

While the reduced revenues are certainly no small matter, Accounting Today noted that tax advisory services are still doing better than other parts of the professional services market; management consulting, for example, saw a 13 percent worldwide contraction in the same period.

Practitioners who want to be ready for the bounce back in tax advisory services anticipated this year might be interested in attending the Foundation for Accounting Education's International Taxation Conference webcast on Jan. 28.

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