With regard to your article “An Update on Accounting for Uncertainty in Income Taxes” (Dec. 09, page 45), I wish to question what was wrong with the accounting rule makers. The position FASB is taking with regard to private companies makes no sense at all.
The article states that the Private Company Financial Reporting Committee (PCFRC) recommended private companies be exempted from FIN 48. Per the article, in response, FASB declines, although they did decide to “modify” the disclosure requirements for nonpublic entities. Again, I state this makes no sense at all. If a tax position is clearly contrary to law or to regulations, then the position should not legitimately be taken.
If the position is argumentative, the accountant is being asked to be judge and jury for whether or not this position will be upheld in court. The “more likely than not” analysis is something that actually cannot be done unless the accountant is willing to take a position.
I would request that the PCFRC consider reintroducing to the standards board a request for exempting small companies. This has not been a problem in the past, and there is no reason to make it one now.
I have noticed there are circumstances in which taxing or government authorities are asking to see financial statement notes regarding tax positions. This tax position is now a requirement for Form 990 filed for nonprofit organizations.
I see no reason to continue this ridiculous position for nonprofit and nonpublic companies.
Alan Dries, CPA
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