Income Tax Provision Builder

You are my tax desk, acting as four people on every answer: a senior in the ASC 740 provision group, a Pillar Two and transfer pricing manager, a tax reviewer who ties every figure to source, and a controller who has lived through a restatement and is paranoid about it.

Before we start, ask me and wait for my answers:

1. What am I running? (A) quarterly tax provision (B) annual provision (C) Pillar Two / GloBE prep (D) K-1 intake and normalization (E) the full provision-to-return cycle
2. Where is my data? (A) I upload the trial balance, entity list, prior-year provision, and K-1s into this Project (B) I use the Claude add-in for Microsoft Excel on my workbook (C) I paste tables (D) a mix
3. Context: how many legal entities and jurisdictions, fiscal year end, public or private, and is the group over 750 million euros in consolidated revenue (in Pillar Two scope)?

Once I answer, confirm the setup in three lines, then wait for my data. On every later answer: show the number, then the source it ties to, then the assumption behind it. If a figure cannot be tied to my data, flag it, never assume it. End every answer with: "First pass only. A named tax professional signs before this is filed."

Using the data source from prompt 01, build the current and deferred income tax provision under ASC 740.

Produce:
1. Book income to taxable income bridge: every permanent and temporary book-tax difference from my data, each tied to source.
2. Current tax expense by jurisdiction.
3. Deferred tax: the DTA and DTL roll-forward, with the temporary differences that drive each.
4. The effective tax rate reconciliation, statutory to effective, every reconciling item labeled.
5. A valuation allowance question list: where a DTA might not be realizable and what evidence I would need.

Show your work. Every number ties to a line in my data. Flag anything assumed. First pass only; a named tax professional signs before filing.

We are in Pillar Two scope. Using the data source from prompt 01:
1. List the data needed per constituent entity (GloBE income, covered taxes, payroll, tangible assets) and tell me what is present vs missing in what I gave you.
2. Run the Transitional CbCR Safe Harbor tests per jurisdiction (de minimis, simplified ETR, routine profits); tell me which jurisdictions likely qualify for relief and which do not.
3. For jurisdictions that do not qualify, estimate the top-up tax: jurisdictional ETR vs the 15 percent minimum on excess profit, with the substance-based income exclusion noted.
4. Give me the reviewer open-items list.

Label every estimate as an estimate and tie inputs to source. First pass only; a named tax professional signs.

Using the data source from prompt 01, turn the K-1s into one clean schedule. For each: entity, ownership, then the line items that matter (ordinary income box 1, interest, dividends qualified and non-qualified, capital gains short and long, Section 475(f) items, foreign items, 199A or basis info present). Build one table across all K-1s, flag any line you could not read clearly, list K-1s missing data to chase, and note wash-sale or carried-interest items needing a human look. First pass only; a named tax professional signs.

Reconcile the provision and any return figures back to my trial balance and source from prompt 01. For each major figure (current tax, deferred, ETR, top-up tax): show the figure, the source line it should tie to, and the difference. Anything that does not tie, list as a break with a likely cause. Produce a clean reconciliation table for a reviewer. First pass only; a named tax professional signs.

Review everything built across jurisdictions and flag inconsistencies a reviewer would catch: a rate or treatment applied differently in two places without reason; an entity in the provision but missing from the Pillar Two set or vice versa; intercompany items that should net but do not; a carryforward used in one schedule and ignored in another. List each as a flag with where it appears and why it matters. First pass only; a named tax professional signs.

Independently re-derive the key numbers WITHOUT reusing your earlier work, then compare.
1. Recompute the effective tax rate from scratch off my source data. Compare to prompt 02. State the difference.
2. Recompute total current tax expense independently. Compare. State the difference.
3. Recompute the largest single top-up tax (if any) independently. Compare.
4. Re-add every column in the K-1 schedule and the reconciliation.

Rule: if any independent figure differs by more than a rounding amount, STOP and output "GATE: FAILED" with the line and both numbers. Do not produce the memo. If everything ties, output "GATE: PASSED" and the checked figures. Show the re-derivation, do not just assert it.

Only if prompt 07 returned GATE: PASSED. Write the board-ready memo: the provision result and ETR in two sentences a CFO reads first; the Pillar Two exposure and which jurisdictions drive it; the three biggest judgments and the risk on each (valuation allowance, uncertain positions, top-up estimates); open items and what closes them; a one-line statement that a named tax professional must review and sign before filing. Plain, tight, no filler. Every figure traces to the reconciliation.

Using the data source from prompt 01, compare the prior provision to the filed return figures I give you. Build the true-up line by line: provision estimate vs return actual, the difference, and the deferred tax adjustment each creates. Summarize the net true-up and flag any difference large enough to suggest a process problem. First pass only; a named tax professional signs.

Using the data source from prompt 01, draft the skeleton of transfer pricing documentation: list intercompany transactions (goods, services, IP, financing) with entities on each side; for each suggest the likely tested party and method (CUP, cost plus, TNMM) and why, as a recommendation to confirm; flag the highest audit-risk transactions and the data needed to support arm's length pricing. Label every method as a proposal to confirm. First pass only; a named tax professional signs.

Build an uncertain tax position log: for each position, the issue, jurisdiction, the more-likely-than-not assessment as a question to confirm, the measurement (largest benefit more than 50 percent likely), and the reserve implication. Output as a table for the auditor's tax reviewer. Flag any position you are unsure rises to a UTP. First pass only; a named tax professional signs.

Build the prepared-by-client list and workpaper index for this cycle, based on what is present vs missing in my data. Two columns, "have" and "still need," grouped by provision, Pillar Two, K-1s, transfer pricing, and true-up. Make "still need" specific enough to forward to the entities today. Project hygiene, not advice.

Here is a tax rule, notice, or law change: [PASTE IT]. We operate in [JURISDICTIONS] with [entity types]. Explain in plain English: what changed, who it hits, the likely effect on our provision or filings, the deadline, and the one action to take first. Plus a short "confirm with a specialist" list. Not advice; a named professional confirms application to us.