IRS to Require Uncertain Tax Position Reporting in 2010

From the IRS

On March 5, the IRS followed up on its January 26 announcement about plans to require certain business taxpayers to report uncertain tax positions on their returns. It extended the ongoing comment period on the plan and announced that it will start requiring the reporting for tax years beginning in 2010 (Announcement 2010-17).

In response to requests from a number of groups, including the AICPA, for more time to study the proposal, the IRS extended the comment period until June 1 (March 29 was the original comment cutoff date).

The IRS also announced that in early April it planned to release a draft schedule and instructions for reporting uncertain tax positions. The IRS anticipates that the draft instructions will answer many of the questions it has received about the proposal, although it warned that they “may not completely resolve all questions about the proposal.” The schedule will not be implemented for the 2009 tax year but will be required for returns relating to calendar year 2010 and for fiscal years that begin in 2010.

Under the proposal in Announcement 2010-9, businesses with more than $10 million in assets will be required to disclose with their tax returns certain details about each uncertain tax position, defined as a position for which the taxpayer or a related entity has recorded a reserve in its financial statements under FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes, or other accounting standards. (For more on the proposal, see News Notes, “IRS Plans to Require Disclosure of Uncertain Tax Positions,” 41 The Tax Adviser 159 (March 2010).)

Comments on the proposal can be e-mailed to announcement.comments@irscounsel.treas.gov, with a subject line that reads “Announcement 2010-9.”