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IRS: What’s in Your Reserve?


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Tax law and accounting collide as the IRS prepares to dig deeper into uncertain tax positions.

The Internal Revenue Service is headed down the home stretch with respect to uncertain tax positions. Since June, it has been reviewing public comments on its controversial proposal to require more-detailed disclosures around tax deductions and credits that may not pass muster with the agency. The IRS plans to issue final guidance by the end of the year — in time for affected companies to include the new disclosure form with their 2010 tax returns.

If the bulk of the proposed guidance remains intact, companies with more than $10 million in assets that have identified uncertain tax positions will be required to file a new form, called Schedule UTP, with their annual tax returns. Uncertain tax positions include any position for which a company has created a reserve in an audited financial statement.

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