Subscribe RSSThe I.R.S. rule piggybacks a Financial Accounting and Standards Board regulation known as Fin 48, which addresses “accounting for uncertainty in income taxes,” and will affect most companies. They will be required to disclose what their total tax bill might be if the I.R.S. were to challenge any of their transactions, and to provide short summaries of each one even if the transactions are not currently deemed illegal by the I.R.S.
Corporate tax lawyers and experts were stunned by the announcement.
“This is a massive, very important shift,” said Robert Willens, an accounting and tax expert in New York. “Corporations have treated audits as a game of ‘come see what you can find, we’re not going to volunteer stuff,’ and now the balance of power will shift to the I.R.S.”
The disclosure rule would not affect corporate filings until at least 2011, Douglas H. Shulman, the I.R.S. commissioner, said in an interview in New York at a meeting of the New York State Bar Association’s tax section.
