Uncertain Tax Positions: Reconciling the Existing Guidance Available to Purchase

ABSTRACT: Multiple revisions in recent years to IRC §6694, IRC §6662, U.S. Generally Accepted Accounting Principles (GAAP), and International Financial Reporting Standards (IFRS) have created conflicting recognition and disclosure requirements for uncertain tax positions. This paper reviews the existing recognition thresholds under these various standards—“reasonable basis,” “substantial authority,” and “more‐likely‐than‐not”—and discusses scenarios in which the standards may cause reporting conflicts between tax and financial reporting. This paper also reviews the extant disclosure guidance for uncertain tax positions included in tax and financial reporting, with a particular emphasis on the newly issued proposed IRS regulations regarding general and specific‐item disclosures for tax return preparers.