Best of 2010: Tax

The Internal Revenue Service provided its auditors with a corporate road map this year.
David Katz and Marie LeoneJanuary 6, 2011

Best of 2010

While Congress and the Obama Administration were making news negotiating the fate of the expiring Bush tax cuts, corporate taxpayers had to keep an eye on several other key tax issues in 2010. High on the list were the contentious disclosure rules governing uncertain tax positions that were issued by the Internal Revenue Service earlier in the year. Companies complained bitterly that the new disclosures would essentially create “road maps” for IRS auditors. Undeterred, and to the chagrin of many, the service issued the rules as Schedule UTP.

This was also the year in which tax experts debated whether BP should be entitled to a tax break in light of its disastrous oil spill, and in which revenue authorities around the world cranked up the number of audits they performed — in some cases agreeing on “simultaneous” audits with other countries.

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The sagging global economy in 2010 created deferred tax assets for companies in the form of net operating losses — assets that can be used in the future to offset taxable income. As a result, two older court rulings relating to the treatment of NOLs became more pertinent than ever.

Finally, contrary to predictions by its opponents, the new health-care law didn’t affect companies’ financial statements. But a tax rule slipped into the law in its final stages created a potentially debilitating reporting rule for small businesses.

IRS: What’s in Your Reserve?
Tax law and accounting collide as the IRS prepares to dig deeper into uncertain tax positions.

Poll: New Tax Rule to Feed Tensions
The new IRS disclosure requirement for uncertain tax positions has many executives anxious about audits, privilege, and prep work, says a new survey.

Will BP’s Tax Benefit Disappear?
Under IRS rules, BP is entitled to a deferred tax benefit for the loss it will incur related to the Deepwater Horizon drilling rig explosion. But there is more at play than tax and accounting rules.

Double Trouble? Maybe Not
Companies that face simultaneous audits find that it pays to be diplomatic.

Looking at Historic Businesses Through an NOL Lens
As companies emerge from the financial crisis and begin to consider applying NOLs against taxable income, two older court rulings seem more relevant than ever.

Health Reform’s 1099 Headache
A brief provision in the health-care reform law could create big reporting problems for small businesses.

Your Loss Is Your Gain
Uncle Sam has extended the time frame for loss carrybacks. Should you take advantage?

Sucking the LIFO Out of Inventory
The government sees billions of dollars in potential tax revenue sitting on the shelves of company warehouses.

The IRS Picks On the Little Guy
Tax audits of big companies have declined as the Internal Revenue Service shifts its attention to smaller businesses.

A Tax Victory for Multinationals
The White House drops its proposed reform of “check-the-box” tax rules. Will it pick it up again?