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IRS Issues Proposed Regs Requiring Disclosure of Uncertain Tax Positions - Emil Estafanous, CPA : Emil Estafanous, CPA

IRS Issues Proposed Regs Requiring Disclosure of Uncertain Tax Positions

The IRS expelled due regulations (REG-119046-10) that would need certain business taxpayers to news capricious taxation positions on their taxation returns. The regulations are a latest step in an commencement a IRS launched in Jan with a recover of Announcement 2010-9.

In April, a IRS expelled a breeze Schedule UTP, Uncertain Tax Position Statement, and breeze instructions. The due regulations need taxpayers with capricious taxation positions and resources of $10 million or some-more to record Schedule UTP starting subsequent year if they, or a associated entity, emanate audited financial statements. Affected taxpayers embody companies compulsory to record Form 1120, word companies compulsory to record Forms 1120-L or 1120-PC, and unfamiliar companies compulsory to record Form 1120-F.

The preliminary to a due regulations says this will concede a IRS to “quickly and well brand those returns, and a issues underlying those returns, that benefaction a poignant risk of noncompliance with a Internal Revenue Code.”

When a due regulations are finalized, a Schedule UTP filing requirement will request to earnings filed for taxation years commencement after Dec 15, 2009, and finale after a date a final regulations are published in a Federal Register.

AICPA Concerns

In June, a AICPA submitted comments to a IRS on a capricious taxation position proposal. The AICPA’s concerns about a offer concentration on 6 areas:

  • The offer potentially undercuts a firmness of a financial matter process;
  • It will levy an increasing weight and cost on taxpayers almost jagged to any tangible advantage to a IRS;
  • It will emanate a new tragedy among and between taxpayers, taxation advisers and a IRS, and change a stream self-assessment system;
  • It will furnish complexity and outcome in distortions that will block a settled IRS goals;
  • It will disproportionately impact tiny businesses; and
  • It calls for taxpayer stating during a aloft turn than mandated by Congress.

The AICPA recommends that a IRS concentration on improving a use and government of a estimable volume of disclosed information that it already possesses, rather than requiring estimable amounts of new information.

The AICPA also recommends that a IRS control a commander module and weigh a formula before determining either to enhance a compulsory stating of capricious taxation positions.

For some-more on a AICPA’s concerns, see “AICPA Submits Comments on IRS Uncertain Tax Position Proposal” and a AICPA Tax Division’s Web page, “Disclosure of Uncertain Tax Positions.”

The AICPA is now putting together a operative organisation to investigate a due regulations and make serve recommendations to a IRS.

Comments and Hearing

The IRS has requested comments on a due regulations by Oct 12 and has scheduled a open conference for Oct 15 during a IRS Building in Washington. Comments can be posted electronically during www.regulations.gov (with a theme IRS REG-119046-10).

About Emil Estafanous, CPA
Certified Public Accountant (CPA) Tax Professional committed in representing taxpayers and resolving their tax problems.

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