AICPA Protests Disclosures of Uncertain Tax Positions

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The American Institute of Certified Public Accountants has told the Internal Revenue Service it should withdraw its proposed rule that would require companies with more than $10 million in total assets to disclose uncertain tax positions on a new schedule.

In comments submitted to the IRS on June 1, the AICPA said the new reporting requirements will fall heavily on taxpayers already stretched to meet current disclosure requirements.  The IRS should instead focus its resources on the information companies now disclose to the IRS, the AICPA said. 

If the IRS goes forward with implementing the uncertain tax position rules, the AICPA said it should do so as a pilot program. The IRS would then be able to evaluate the process and sunset the program if its costs outweigh its benefits. In addition, the AICPA said small businesses will be particularly hard hit, so any new disclosure rules should only cover taxpayers with both total assets in excess of $50 million and annual gross receipts in excess of $100 million.

“We understand that the UTP proposal does not change the underlying rules for financial reporting, but believe overlaying a tax disclosure construct on the financial reporting system introduces a dynamic which could work at cross purposes with the original and fundamental purpose of the financial reporting rules,” wrote AICPA Tax Executive Committee chair Alan Einhorn in his letter to IRS Commissioner Douglas Shulman. “The importance of reliable, transparent financial reporting should not be compromised as part of this IRS tax disclosure initiative.”

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