Tax Managers

The tax manager profession has roots in the early days of trading goods and keeping written records of the transactions. By the 15th century, a double-entry bookkeeping system was introduced by mathematicians in Europe, to keep track of debit and credit transactions. By the late 19th century, the U.S. accounting profession, as well as accounting companies, started to grow. Many investors from Europe sent their own accountants to the U.S. during that time to oversee their investments in American companies, and these accountants then started their own accounting businesses.

The first federal income tax was imposed by President Lincoln in 1861, when the Revenue Act was signed. This was enacted as a 3 percent tax on annual incomes over a specific amount, with the aim of helping to fund the Civil War. The second federal income tax law was introduced in 1894 by President Grover Cleveland's administration, which aimed to impose a 2 percent tax on extremely high annual incomes. The Supreme Court overturned this law a year later, deeming it unconstitutional. The third federal income law was enacted in 1913, and this one took hold. The Revenue Act of 1913 imposed a two-tax system in which citizens and businesses paid income taxes. One year later the first 1040 income tax form was introduced.

The Securities and Exchange Commission was founded in the 1930s to establish industry standards and regulate accounting and investing practices and financial reporting. In 1973, the Financial Accounting Standards Board was established, with the mission to provide financial accounting and reporting standards for public and private companies and not-for-profit organizations.

As tax laws change often, more companies have come to rely on the expertise of tax managers to keep their tax reporting compliant and to advise them on ways to reduce their tax liabilities. Tax managers today must have strong knowledge of federal, state, and local tax laws, management experience, as well as be proficient in business and tax management software programs.