FIN 48 Experiences: Mastering the Practical Challenges

After the first two fiscal quarters of complying with FASB’s Interpretation 48, better known as FIN 48, what have American corporations and their outside accountants learned? What are the keys for keeping income tax accounting and compliance on track while climbing the FIN 48 learning curve?

FIN 48 compels a dollar figure assigned to the uncertain tax positions they take on federal and state income tax returns, if they think those positions “more likely than not” will be upheld. That's a new evaluation process, effective with fiscal years starting after Dec. 15, 2006.

Intimate familiarity with the terms of FIN 48 is not the same as mastering the practical changes forced on accounting firms and their tax and attest clients. For example, what constitutes a terse but on-point FIN 48 paragraph for a financial statement still vexes many.

Listen as our panel of experienced professionals from the corporate tax and finance, and accounting firm sectors shares their experiences with FIN 48 compliance.

Our panel includes:

Arthur Radin is Managing Partner of the New York-based Radin, Glass & Co. CPA firm and leader of its Accounting and Auditing Practice. He previously was the president of the Feldman Radin & Co. accounting firm for 15 years and worked at Deloitte & Touche for 18 years.

Sheryl Vander Baan is a Tax Executive in Financial Services Practice of Crowe Chizek, based in the firm’s Grand Rapids, Mich. office. She has more than 20 years of tax experience and is one of the firm’s in-house authorities on FIN 48.

Jim Kelly is the tax manager for research and planning at Atlanta-based United Parcel Service, where he has acted as the tax staff’s chief FIN 48 tactician the last two years.

Among the areas in which they’ll offer suggestions for smoother processes and procedures are:

• The amount of time a company’s tax staff and management realistically should expect, and want, to devote to FIN 48 compliance.
• Establishing an internal system to gather data that rise to the FIN 48 definition of “tax position.”
• Dealing with IRS access to tax work papers, including accrual papers.
• Tax reserves – how much is too much or too little?
• The special challenges in reporting, control, recognition and measurement of tax positions for a company’s foreign investments, under FIN 48.

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