IRS Scanning 10 Ks for Tax Data, Report Finds
When CFOs and accounting standard-setters refer to the “users” of corporate 10-Ks, they usually mean investors, research analysts and rival companies. But new research suggests that another kind of user has been taking a keen interest in their companies’ annual reports: the Internal Revenue Service.
In fact, corporate taxpayers may have gotten wind that the IRS was increasingly downloading their 10-Ks starting in 2006, when the Financial Accounting Standards board issued an interpretation (FIN 48) that required more information about uncertain tax positions (UTPs), says one of the researchers, Jeffrey Hoopes, an Ohio State accounting professor who also does research for the IRS.
As a result, companies scaled back on the verbiage and numbers concerning their tax uncertainties in the notes to their 10-Ks, according to the study, “Reading the Roadmap: IRS Attention to Financial Statements.” Read more on CFO.