Finance leaders spend considerable energy anticipating risk from external stressors such as market volatility, interest rate exposure, and supply-chain disruption. Yet one of the more consequential risks accumulating inside many organizations rarely appears on the CFO's radar until something goes wrong: the steady erosion of institutional knowledge as senior professionals retire.
The scale of the shift—the so-called "Silver Tsunami"—is worth pausing to contemplate. Every day, approximately 10,000 Baby Boomers reach retirement in the United States. In most fields, that is chalked up to a staffing issue. But for specialized tax teams, like excise tax, the end result is a critical knowledge drain—and once that expertise has left the organization, it will take a long time to recover.
Nearly half of all tax leaders were over the age of 58 in 2023, and the IRS projects that 37 percent of its own workforce will be retirement-eligible by 2028. The private sector is facing a comparable curve. The usual challenge of replacing retiring staff is exacerbated by the fact that excise tax isn't a discipline that universities produce at scale. It accumulates through years of direct exposure to audits, regulatory interpretation, and judgment calls that rarely have clean answers. This knowledge doesn't exist in a process document; it exists in people.
For CFOs, the implications extend well beyond compliance. A tax team operating below its institutional capacity is less able to protect cash flow, support strategic decisions, or identify the exposures that tend to surface during audits. As finance leaders consider their function's relationship to the tax team—and how finance can help the tax group navigate its Silver Tsunami—they should keep in mind three key points:
1. Tax is a cash flow function, not a compliance function. One of the more persistent misconceptions in finance is that the tax team's primary job is to keep the organization compliant. Although compliance is certainly central to what tax professionals do, it isn't the whole picture, and treating it as such may leave money on the table.
Experienced tax teams identify allowances, credits, exemptions, refunds, and structural opportunities that have a direct effect on cash flows. For example, fuel distributors can recover substantial excise tax refunds through timely Form 8849 filings, retain collection allowances for filing and paying on time, or reduce restricted cash by qualifying for bond waivers based on strong compliance history. Organizations also can uncover overlooked vendor discounts and tax deferral opportunities embedded in supply-chain agreements that improve working capital without changing operations.
These are not theoretical savings. They are recoverable amounts that a company can either capture or forfeit—and in the case of forfeitures, the finance team often may not even realize what has occurred. CFOs who understand this dynamic don't treat tax as a cost center to be managed efficiently; they treat it as a function capable of generating measurable financial value when it's given the resources and organizational access to succeed.
Reframing finance professionals' understanding of the tax team's value proposition can benefit almost any organization, but it becomes more urgent as senior talent departs. The capacity to identify and capture credits, exemptions, refunds, and structural opportunities relies on an individual's judgment, and it doesn't automatically transfer. Finance leaders should focus on documenting this knowledge into repeatable processes and technology systems, rather than allowing it to remain fragmented or dependent on a few key individuals. That includes embedding decision logic into tax technology, creating standardized workflows and audit trails, and building mentorship programs where senior tax professionals actively train and transfer practical knowledge to newer members of the team.
Organizations that treat tax knowledge as an asset to be operationalized, rather than expertise held by a handful of employees, are far better positioned to preserve cash flow opportunities and maintain continuity as the workforce changes.
2. Late involvement is an expensive tax decision. Every major business decision carries tax consequences, from a new product launch to an acquisition to a change in how goods move through the supply chain. The question is whether the tax team will be at the table when decisions are being made, or whether they will instead be cleaning up afterward.
In excise tax, particularly, how a product is classified, how a supply chain is structured, and where tax liability sits within a transaction can determine the organization's exposure for years to come. Those decisions are far easier to get right at the design stage than to unwind after the fact. Tax professionals engaged early can model the implications of different structures, identify jurisdictional risks that may not appear in standard due diligence, and inform decisions in ways that protect long-term financial outcomes. However, if the tax function is brought in only after a deal has closed or a product has launched, they are largely limited to managing whatever structure they inherit.
This can turn the experience gap of a relatively new tax team into a direct financial risk. Knowing how a regulator is likely to interpret a product classification, anticipating where liability questions tend to surface after a supply-chain change, understanding which exemptions apply and how to document them defensibly—all these insights require judgment built over decades. Organizations losing senior excise tax talent are operating with less of that judgment, often without realizing it until something goes wrong.
Audit exposure compounds the problem. Tax authorities have become considerably more sophisticated in how they select and conduct audits; automated data matching, cross-jurisdictional information sharing, and more targeted enforcement mean organizations face a higher probability of scrutiny than they did a decade ago. When senior talent thins out, filings still go out and deadlines still get met, but the depth of review behind them may change. The judgment that would have flagged an issue before it became an amendment or audit finding simply isn't there.
That risk doesn't stay in the tax department. It shows up in financial reporting, in back taxes and penalties, and in balance sheet adjustments. Ultimately, it lands on the desk of finance leadership.
3. The knowledge walking out the door won't come back quickly. The retirement wave in excise tax is already well under way, and the financial risk it creates is unlike most others on a CFO's radar because it's invisible … until it isn't. What makes excise tax expertise so difficult to recover is the nature of what's being lost. The ability to recognize a risk pattern before it surfaces, or the institutional memory of how a regulator responded the last time a similar position was taken, is not something that is written down anywhere. It exists in people, and when those people leave, it leaves with them.
Worse, replacing these types of knowledge takes longer than most organizations expect. Newer professionals can follow a process, but they cannot yet replicate the judgment behind it. And that gap doesn't close quickly, regardless of how capable the individuals are.
The organizations managing this well aren't waiting for departures to force the issue; they're treating knowledge transfer as a deliberate investment. They are initiating structured mentorship programs that put newer professionals inside consequential work before senior colleagues leave. They're creating documentation that captures not just what was done but why. And they're establishing a compliance infrastructure that reduces dependency on institutional memory that may not be available when it's needed. This combination of actions doesn't replace experience, but it extends its shelf life.
The window for companies to capture the knowledge of their senior tax leaders is narrowing. CFOs who act before the gap is visible will have options, while those who wait until the lack of institutional memory surfaces as a financial event will find themselves managing the consequences of that lapse.
The Cost of Waiting
The risks of losing tax expertise—potentially including forfeited cash flow, poorly timed decisions, and company-specific knowledge walking out the door—share a common thread. They accumulate quietly and surface later, usually at a point when the options for managing them have already narrowed.
The tax function is not a back-office compliance operation to be managed at arm's length. For finance teams willing to treat it as such, the tax group can be a meaningful source of financial protection and strategic advantage. Tax teams require active investment to maintain, and they become significantly more expensive to rebuild once the institutional knowledge is gone.
The Silver Tsunami is testing whether finance leaders understand the risk. The ones who do won't be waiting for the answer to become obvious.
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