Tax Risk Management Under SOX 404 and FIN 48

Abstract

This paper summarizes the key features of tax risk management and sets out the typical steps that should be followed. It follows a typical Six Sigma process in going about tax risk management. This paper discusses tax risk management, in particular, in the context of Section 404 of the U.S. Sarbanes-Oxley Act of 2002 (SOX 404) and the Financial Accounting Standards Board (FASB) Interpretation No. 48 (FIN 48) ("Accounting for Uncertainty in Income Taxes").

This paper was originally presented in Tampa, Florida, in April 2007, as part of a Continuing Legal Education program to a local association of lawyers dealing with corporate governance issues.

Keywords: six sigma, tax risk management, SOX 404, FIN 48

JEL Classification: K10, K33, K34