U.S. tax authorities will soon demand that corporations reveal much more detailed financial information during audits, the top U.S. tax official said on Tuesday.
Under new draft guidance, the Internal Revenue Service would require companies to report which tax positions they take that could be uncertain or challenged by the IRS.
These taxpayers would be required to annually disclose uncertain tax positions in the form of a concise description of those positions and the maximum amount of U.S. income tax exposure if the taxpayer's position is not sustained, IRS Commissioner Doug Shulman said in remarks prepared for a speech to lawyers in New York in announcing the plan.
Shulman, speaking to a New York State Bar Association meeting, said the IRS will not require companies to disclose reserves put aside to deal with such losses.
The policy, subject to public comment on its implementation, comes amid stricter financial accounting rules that already require companies to compile such data.
Shulman has said the agency will focus on wealthy tax cheats and corporations pushing the limits of the tax law.
President Barack Obama last week instructed the IRS to review the accuracy of companies' reports on their tax obligations to be sure they are truthful. He also ordered federal agencies to take measures to prevent companies that are delinquent in paying taxes from obtaining new government contracts.
(Editing by Dan Grebler)