Carie Pace, Managing Partner at Alpina Tax & Accounting Services.
Why the Tax Expert and CFO Relationship Is the Most Underbuilt Asset in a Scaling Business
I have worked with business owners at every stage of growth. And the pattern I see most consistently, the one that separates the companies that scale cleanly from the ones that scale painfully, has nothing to do with the product, the market, or the team.
It has to do with whether the tax function and the financial strategy function are talking to each other.
At $25 million in revenue, most businesses have outgrown the model where a tax expert files the return and a bookkeeper keeps the records, and that is the full extent of the financial infrastructure. But they have not yet built what replaces it. There is a gap between compliance and strategy, between what happened last year and what is about to happen next, and that gap is where margin quietly disappears.
My job, at this stage, is not just to file an accurate return. It is to make sure that gap does not exist.
What I Actually Do When I Work with a CFO
When a business at this revenue level has a CFO, full time or fractional, my role changes significantly. And that change is where the real value of the tax expert relationship begins to show up.
A CFO is building the financial model for the business. They are projecting revenue, modeling capital needs, structuring debt, planning headcount, and advising on allocation. That work is forward looking by design. It has to be. You cannot lead a scaling business by looking in the rearview mirror.
But every decision in that financial model has a tax consequence. And if I am not in that conversation, in real time, not at year end, those consequences get baked in by default rather than by design.
Here is what the integration actually looks like in practice:
When the CFO is modeling a major equipment purchase, I am running the depreciation analysis alongside that model because whether we elect Section 179, take bonus depreciation, or spread the deduction over the asset’s useful life changes the taxable income picture for the current year and potentially the next two. That decision affects estimated tax payments, cash flow timing, and bracket positioning. It is not a tax return decision. It is a capital allocation decision with a tax variable embedded in it.
When the CFO is modeling compensation for the owner or key executives, I am providing the tax structure that makes that compensation most efficient. What portion should be salary, subject to payroll tax? What portion should be distributions? What is the retirement plan contribution ceiling at this income level, and are we funding to it? Are we capturing the full QBI deduction, or has the compensation structure inadvertently eroded it? These are questions that only get answered correctly when the tax function and the financial planning function are working from the same model.
When the CFO is evaluating a market expansion or a new entity, I am mapping the state tax implications before the decision is made, not after the lease is signed. Because nexus attaches the moment the business activity begins. By the time a state sends a notice, the liability already exists. The time to manage it is before the CFO approves the expansion budget.
This is what it means for the tax expert and CFO to work together. Not coordination after the fact. Integration before decisions are finalized.
Why This Matters More at $25 Million Than It Did at $10 Million
I want to be direct about something that most business owners at this revenue level have not been told clearly enough.
The tax complexity of your business did not scale linearly with your revenue. It scaled exponentially.
At $5 million, the variables are manageable. The entity is usually one structure. The owner compensation is straightforward. The state filing footprint is limited. The capital expenditures are meaningful but not complex. A strong tax expert working with year end data can identify most of what needs to be caught.
At $25 million and above, none of that is true anymore.
You may have multiple entities, operating companies, holding companies, and real estate entities, each with their own tax positions that interact with the others in ways that are not obvious from a single return. Owner compensation at this level simultaneously affects payroll tax exposure, QBI deduction eligibility, retirement plan contribution limits, and the basis calculations that determine what distributions cost you on exit. A single compensation decision touches four separate tax variables.
Your capital expenditure cycle is now large enough that the difference between an optimal depreciation strategy and a default one is not a rounding error. On a $2 million equipment purchase, the timing and method of depreciation can shift $400,000 to $600,000 in taxable income between years, which at a 37% rate is a six figure cash flow event.
Your multi state exposure, if you are selling into other states or have remote employees, creates filing obligations that need to be mapped, monitored, and managed continuously. At $25 million in revenue, an unaddressed multi state liability is a balance sheet risk, one that surfaces during financing or due diligence at the exact moment you can least afford it.
All of this requires a forward looking financial function. And that function only works if the tax intelligence feeding it is current, integrated, and strategic.
The Rolling Tax Forecast: What It Is and Why You Need One
One of the most valuable things I provide to clients at this revenue level is something most business owners have never seen from their tax expert: a rolling twelve month tax liability forecast.
This is not a projection of what you will owe on April 15th. It is a living model, updated quarterly at minimum, that shows what your federal and state tax obligations look like based on current year income trajectory, planned transactions, compensation decisions, depreciation elections, and entity level positions across your full structure.
When a CFO has this document, their financial modeling changes. Capital allocation decisions get made with the after tax return in the model, not as an afterthought. Compensation reviews happen with payroll tax exposure and retirement contribution capacity in the room. Transaction timing gets evaluated against its tax consequence before the LOI is signed.
Without this document, the CFO is modeling with an incomplete picture. Revenue, expenses, and EBITDA, but not the actual cash leaving the business in the direction of the IRS, and not the decisions that change that number.
The rolling tax forecast is what connects my work to theirs. It is the bridge between the compliance function and the strategic function. And it is, in my experience, the single most underutilized tool in a scaling business’s financial infrastructure.
The Transition Most $25M Owners Are Standing In Front Of
Here is the conversation I find myself having more and more with owners at this revenue level.
They have built something real. They are running a company that generates significant revenue, employs a real team, and has genuine enterprise value. And they are standing at a decision point: whether to bring on a CFO, whether to upgrade their financial infrastructure, and whether to invest in the strategic layer that the next level of growth requires.
My consistent counsel at this junction is this: the CFO relationship and the tax expert relationship are not two separate investments. They are one integrated decision. Because a CFO without a tax integrated financial model is working from incomplete data. And a tax expert without a seat at the strategic table is doing compliance work; necessary, accurate, but fundamentally backward looking.
The businesses that scale past $50 million efficiently, without leaving a trail of unnecessary tax liability, without discovering multi state exposure in due diligence, and without losing margin to compensation structures that were never optimized, are the ones where these two functions were built to work together from the start.
If you are at $25 million and the CFO conversation is happening, that is exactly the right time to have the tax strategy conversation alongside it. Not after the CFO is hired. Not at year end. Now, while the financial infrastructure is being designed and the decisions that will govern the next five years of growth are still being made.
That is when the tax function has the most influence. That is when the decisions are still reversible. And that is when the work I do has the highest return, not measured in deductions found after the fact, but in liability avoided before it ever existed.
What I Tell Every Owner at This Stage
Filing your return correctly is the floor, not the ceiling, of what your tax expert should be doing for you at $25 million in revenue.
The ceiling is this: a tax expert who understands your business model deeply enough to sit in strategic conversations, who feeds real time tax intelligence into your financial planning, who flags the consequence of a decision before it becomes a cost, and who builds the forward looking infrastructure that makes scaling less expensive, not just more organized.
That is what a real tax expert and CFO partnership looks like. And at your revenue level, it is not a luxury. It is the financial infrastructure your next phase of growth requires.
At Alpinatax.com, this is the work we do for owners at this stage. If you are scaling past $25 million and the financial infrastructure has not kept pace, reach out. The conversation is overdue, but it is not too late to build it right.
Here are some FAQs we have heard from our clients:
What is tax liability forecasting and why does it matter for my business?
Tax liability forecasting projects what your business will owe, not after the year ends, but as decisions are being made. At $25 million in revenue, the difference between forecasting and discovering is the difference between managing a variable and absorbing a surprise. A rolling forecast connects:
- Compensation decisions to their payroll tax and QBI deduction impact
- Capital purchases to their depreciation and cash flow consequence
- Market expansion to its state filing obligations
- Transactions to their after tax outcome before they close
At what revenue level does a business need a CFO working alongside a tax expert?
The inflection point is typically $15 million to $30 million in revenue. Below that, a strong tax expert working with year end data can catch most of what matters. Above it, the complexity compounds:
- Multiple entities with interacting tax positions
- Owner compensation touching four or five tax variables simultaneously
- Large capital expenditure cycles where depreciation strategy is a six figure decision
- Multi state exposure that accumulates quietly and surfaces at the worst possible time
At that level, a CFO without real time tax intelligence is modeling with an incomplete picture.
What is the difference between tax planning and tax strategy at the $25M level?
Tax planning is largely backward looking, reviewing the year’s activity before the return is filed. Tax strategy at this level is forward looking. The distinction matters because:
- Once a transaction closes, the tax consequence is largely fixed
- Once a compensation structure is set, the payroll tax cost is locked in
- Once a market expansion begins, nexus has already attached
Strategy exists in the window before those decisions are finalized, not after.
How does a tax expert add value when a CFO is already in place?
A CFO builds the financial model. A tax expert makes it accurate. Every projection a CFO runs has a tax variable embedded in it. Without real time tax intelligence, the CFO is working from numbers that do not reflect:
- The actual cash leaving the business in taxes
- The after tax return on capital allocation decisions
- The payroll tax and QBI impact of compensation changes
- The state tax cost of expansion decisions made before nexus is mapped
The after tax return is the only number that ultimately matters. That number requires a tax expert in the room.
What is a rolling twelve month tax forecast and what does it include?
A rolling twelve month tax forecast is a living document, updated quarterly at minimum, that projects federal and state tax obligations based on how the business is actually running. Unlike a year end projection, it moves with the business and includes:
- Current year income trajectory across all entities
- Planned transaction timing and structure
- Compensation and distribution modeling
- Depreciation elections and capital purchase timing
- State level filing positions and exposure
It gives the CFO and owner a real time view of what the IRS is owed and what decisions between now and December 31st can still change that number.
What are the biggest tax risks for a business scaling past $25 million in revenue?
The four most common and most costly risks at this level:
- Multi state nexus exposure, with unfiled state obligations accumulating silently and surfacing in financing or due diligence at the worst possible time
- Compensation structure, with owner salary and distribution ratios set years ago and never revisited, creating unnecessary payroll tax liability or QBI deduction erosion
- Depreciation strategy, with capital expenditures on default schedules rather than optimized through bonus depreciation, Section 179, or cost segregation, leaving six figure deductions uncaptured
- Entity structure misalignment, where a structure that worked at $5 million creates tax inefficiencies at $25 million, particularly around exit tax treatment, pass through eligibility, and basis calculations
When should a $25M business owner start thinking about exit tax planning?
Five years before the exit. The provisions that most dramatically reduce exit tax liability all require time:
- Qualified Small Business Stock exclusions require a five year holding period, with no exceptions
- Entity restructuring done too close to a sale creates its own tax events
- Installment sale design needs to be modeled before an LOI is signed
- Basis optimization cannot be retroactively applied at the closing table
The owners who keep the most from a business sale started planning when a sale felt far away. By the time a buyer appears, most of the options are already gone.
What should I look for in a tax expert at the $25M revenue level?
At this revenue level, filing accurately is the minimum, not the standard. The right tax expert at this stage:
- Models the tax consequence of business decisions before they are made
- Maintains a current understanding of your entity structure and compensation design
- Flags multi state exposure as the business grows into new markets
- Communicates directly with your CFO on a regular basis, not just at year end
- Delivers a rolling tax forecast, not just a completed return
If your current tax expert’s primary deliverable is a completed return, you have a compliance resource. At $25 million in revenue, you need a strategic one.