Changes in Uncertain Tax Positions Guidance Welcome, E&Y Says

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IRS's new guidance on a requirement that taxpayers disclose their uncertain tax positions makes welcome changes but leaves questions in several areas, including timing, the inclusion of interest and penalties in “ranking” disclosed positions, and the true impact of language on waivers of privileged documents, Ernst & Young practitioners say. IRS's decision that it will not consider taxpayers to have waived privilege for otherwise privileged documents that they disclose to their financial advisers is highly significant, but still does not offer complete protection, says Mark Mesler, the Southeast sub-area leader for E&Y's tax controversy and risk management services, during a webcast on the new guidance.