The IRS recently released an internal memo written in March 2007 by
Chief Counsel Donald Korb stating that documents prepared pursuant to
FASB Interpretation no. 48, Accounting for Uncertainty in Income
Taxes,
are considered tax-accrual workpapers and thus are subject to the IRS’s
"policy of restraint.” The IRS has a longstanding policy of
restraint with respect to requesting tax accrual workpapers from a
business during an examination of a tax return. This policy was
implemented by the Service in recognition that the workpapers generally
provide estimates of potential or contingent tax liabilities relating to
tax positions taken by the taxpayer, and any overzealous requesting of
workpapers by IRS examiners might result in an erosion of the quality of
such workpapers over time. For the memo, see
www.irs.gov/pub/irs-utl/am2007012.pdf
.
Korb Reassures on FIN 48
