IRS Transparency Moves Portend Audit Encroachment

IRS Transparency Moves Portend Audit Encroachment

Attention to transparency enhancement aspirations enunciated in Announcement 2010-9 will be ncreasing as the June 1 deadline for comment approaches.  Concerns are manifold, in spite of assurances being offered by Commissioner Shulman and others at the Service since the Announcement was released in January.  Concerns are a function of economic conditions and the deficit as much as they are driven by the absence of specifics in Service explanations to date about the Schedule taxpayers will have to prepare.

Transparency enhancement is a wild card in relationship changes developing between the Service and corporate taxpayers.  Moreover, tensions between corporate tax departments and shareholder interests are bound to be affected as questions emerge about the merits of reporting - or not reporting - uncertain tax positions.  These tensions make corporate tax reporting decisions all the more difficult as principals struggle to strike the optimum balance.