Corporate taxpayers are operating today in an era of unprecedented change in regulatory requirements. For example, FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes, has created new requirements for disclosures on a company’s financial statements, which can provide a road map of potential items for an Internal Revenue Service (IRS) audit. In addition, the IRS has stepped up its efforts to enforce regulatory compliance, as evidenced by the new reportable transaction disclosure regulations.

In the wake of these regulatory changes, an increasing number of companies are taking significant actions to ensure compliance with new and existing tax regulations and to mitigate future tax examination risks. A major challenge for many companies is measuring and managing the company’s tax examination risks, or, their “audit readiness.” 

Failure to understand, report on and comply with these new—and evolving— requirements can result in time-consuming issues, loss of deductions, and tax penalties. The Tax Controversy professionals at Deloitte help companies strengthen their audit readiness programs and plan ahead for future tax risks.