January 2010

IRS Plans to Require Disclosure of Uncertain Tax Positions

From The Journal of Accountancy.

The IRS announced Tuesday that it is considering making changes to how business taxpayers report uncertain tax positions (Announcement 2010-9). Specifically, the IRS said it is developing a schedule that certain businesses would be required to use to disclose uncertain tax positions on their returns annually. The IRS plans to implement this requirement for taxpayers with total assets in excess of $10 million.

In remarks to the New York State Bar Association Tax Section annual meeting, IRS Commissioner Doug Shulman said requiring corporate taxpayers to disclose their uncertain tax positions would make corporate audits more efficient. “Today, we spend up to 25% of our time in a large corporate audit searching for issues rather than having a straightforward discussion with the taxpayer about the issues,” he said in prepared remarks.

Shulman characterized the plan as a reasonable approach to the problem. “We believe we have crafted a proposal that gives us the information we need to do our job without trying to get in the heads of taxpayers as to the strengths or weaknesses of their positions,” he said.

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