If your organization’s board is still in the dark about recent IRS moves targeting uncertain tax positions, I’d suggest (at the risk of nagging – see my blogs here and here) that it’s time to enlighten them.

You probably don’t want to phrase it in terms of: (a) the IRS is basically trying to get corporates to do their work for them; (b) it’s a case of “give us more rope to hang you with”; (c) the whole idea is to give the IRS full access to your innermost tax deliberations so that they can grab the full amount of the maximum tax adjustment that will likely be required in the proposed UTP Schedule.

That might be what you’re thinking, but it’s putting the case a bit bluntly. And anyway, the IRS has been at pains the last 6 months to deny that any of those statements apply.

Instead, you might want to shoot for the more measured language of a new KPMG alert that outlines what boards need to know, including:

“First, the proposed requirement to disclose the maximum tax adjustment may cause examining agents to assume tax risk where no such risk actually exists because the calculation assumes total disallowance …

“Second, since a UTP disclosure may implicitly expose a taxpayer’s own assessment of risk for that tax position, it raises concerns about potential disclosures of privileged information.

“Lastly, companies are concerned that the IRS’s new window into tax risk through Schedule UTP will be distorted because the disclosures may exaggerate the company’s tax risk profile ….”

The paper also offers an overview of two other board-worthy tax developments: the codification of economic substance enacted as part of the healthcare overhaul, and the extension of the statute of limitations for failure to disclose certain cross-border transactions, part of the HIRE Act. ###