There’s a particular phase that many growing companies move through, often without recognizing it until they’re already stuck. The business has scaled past the point where a basic compliance relationship with an outside CPA firm is sufficient. Transactions are more complex, the entity structure has grown, new jurisdictions are in the picture, and the CFO or Controller is fielding tax questions that require more bandwidth and expertise than they have to give.
But the company isn’t quite ready or doesn’t yet believe it’s ready to hire a full-time VP or Director of Tax. The cost feels premature. The search process is daunting. And there’s always a more pressing hire on the list.
So the organization stays in the gap. And the longer it stays there, the more the gap costs.
Companies in the tax leadership gap don’t always know that’s where they are. The signs tend to accumulate gradually rather than announcing themselves all at once. A few of the most common indicators:
Returns are getting filed, but there’s no centralized ownership. Different entities, different deadlines, different external providers – coordinated by whoever has a free moment rather than a dedicated leader.
Tax decisions get made in response to events – a transaction, a notice, a year-end deadline rather than as part of an intentional, forward-looking strategy. The business is constantly catching up rather than getting ahead.
M&A discussions, entity restructuring, compensation plan design, capital structure decisions – these all carry significant tax implications, but there’s no one at the table with the tax expertise to shape them in real time.
Intercompany agreements, transfer pricing documentation, state nexus analysis – the foundational materials that protect a company in an audit or due diligence process may be incomplete, outdated, or simply missing.
Without internal leadership, companies often fill the gap with outside counsel or accounting firms at project rates, without institutional context, and without the continuity that comes from someone who truly knows the business.
None of these symptoms is catastrophic on its own. But together, they create a tax function that is structurally reactive and strategically invisible and that’s a meaningful business risk as the company continues to grow.
We’ve explored what happens at the far end of this trajectory in What Happens When Your Tax Function Falls Behind Your Business Growth? and the pattern is consistent: the longer the gap persists, the more expensive and disruptive it becomes to close.
Understanding why organizations remain in the gap is as important as identifying that they’re there. The reasons are usually rational, even if the outcome isn’t optimal:
For many companies at this stage, a VP of Tax carrying a $250,000–$350,000+ total compensation package (plus benefits, equity, and onboarding time) feels like a commitment that outpaces current need. That instinct isn’t wrong — the timing genuinely may not be right for a permanent hire. But the conclusion — that nothing can be done until it is — is where the logic breaks down.
Senior tax talent is scarce, and executive searches for VP-level tax leaders routinely take four to six months or more. During that time, the gap doesn’t pause — it widens.
Companies often aren’t sure what a VP of Tax would actually own. Is the role big enough? Would they stay? Would the hire work at our stage? That uncertainty leads to paralysis rather than exploration.
In a growing company, there’s always competition for leadership attention. Tax tends to feel less urgent than revenue, product, or people right up until it doesn’t.
The result is that companies rationalize staying in the gap for longer than they should, absorbing compounding risk while waiting for a hypothetical moment when the full-time hire feels clearly justified.
Here’s the reframe that changes the conversation: the choice isn’t between “stay in the gap” and “hire a full-time VP of Tax.” There’s a third option that addresses the core need without the cost, timeline, or commitment of a permanent executive hire.
Fractional tax leadership was built precisely for this moment. It provides the executive-level tax expertise and ownership that the business actually needs, embedded in the organization, integrated with the finance team, engaged in strategic conversations, at a cost structure and commitment level that makes sense for where the company is.
As we’ve written in Why Fractional Corporate Tax Leadership Is Becoming a Strategic Advantage, the fractional model has moved well beyond the perception of a stopgap measure. For many organizations, it represents the most rational approach to executive tax leadership given where they are in their growth trajectory.
A fractional VP of Tax doesn’t just check a box, they build the function. That means establishing the processes, documentation, and governance frameworks that will serve the business well now and support a smooth transition to permanent leadership when the time is genuinely right.
For companies ready to stop accepting the gap as a permanent condition, the path forward typically involves a few key moves:
Someone with executive authority needs to own the function — not manage upward to a CFO who’s already stretched, and not defer to external advisors who lack institutional context.
The processes, calendars, documentation, and reporting frameworks that support a well-run tax function need to exist before the next transaction, audit, or strategic inflection point arrives.
Strategic business decisions should be made with tax implications visible, not retrofitted afterward. That requires a tax leader who has standing in the planning process.
Whether that’s a permanent hire, a continued fractional arrangement, or something in between — the goal is a tax function that’s properly governed and positioned to serve the business’s long-term needs.
The tax leadership gap is a predictable phase for growing companies. But it doesn’t have to be a permanent one. Understanding what the gap costs and that there’s a practical path out that doesn’t require premature hiring commitments is the first step toward closing it.
If your organization is starting to exhibit the symptoms described above, it may be time to have a candid conversation about what your tax function actually needs. More often than not, the answer is available sooner, and at a lower cost, than most finance leaders expect.
*Koru Accountancy Corp provides fractional VP/Director of Tax leadership to growing and complex organizations. We specialize in embedding executive-level tax expertise directly into finance teams, supporting companies through growth, transition, and complexity.
To learn more, visit koruaccountancy.com.*
