A Game of Resisting the I.R.S.

"Today," complained IRS Commissioner, Douglas H. Shulman, in a recent speech, "we spend up to 25 percent of our time in a large corporate audit searching for issues rather than having a straightforward discussion with the taxpayer about the issues." To save that time, and to learn about the things that are being missed, the IRS has proposed expanded disclosure requirements for tax uncertainties (FIN 48) that effectively require companies to give the agency a road map of their tax positions as well as the maximum possible tax hit that companies would take if the I.R.S. chose to challenge them.

This New York Times article discusses the IRS proposed expansion of FIN 48 disclosures, and highlights the recent TGI Webcast "Disclosing Uncertain Tax Positions to the Internal Revenue Service: A Conversation with the Chief Counsel of the IRS."

"This IRS initiative is significant as another milestone in the current global trend by tax regulators toward increased oversight and their interest in sharply escalating compliance, efficiency and transparency among corporate taxpayers," said Hank Gutman, director of KPMG's Tax Governance Institute and a former chief of staff to the Joint Committee on Taxation. Companies have until March 29, 2010 to comment on the IRS plan, and as now written, it would cover any corporate taxpayer with at least $10 million in assets.