The Internal Revenue Service wants large businesses to start disclosing their uncertain tax positions on their tax returns, but on the other hand it doesnt want an information overload.
During an Ernst & Young webcast on Monday, Heather Maloy, commissioner of the IRSs Large and Mid-Size Business Division, talked about what companies with assets over $10 million and their tax executives should expect to provide. Asked about whether there was a threshold for materiality, she replied, Our view is that we would follow financial statement materiality. We did not propose to overlay any additional materiality over and above any financial statement materiality.
She also noted that there is a difference between identifying issues and then going beyond that. She recommended a concise description to allow the IRS hear what the issue is. Many companies are concerned about the risk of litigation if they go too far in their disclosures. Brevity is the soul of wit, and apparently of disclosures to the IRS as well.
Maloy was also asked about the timeline for the IRS issuing the new rules. She noted that the IRS is currently working on developing the schedule form for disclosing the uncertain tax positions, and the IRS would issue it with enough time for interested parties to comment. She noted that the IRS has already received several requests to extend the comment period beyond the March 29 deadline.