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What Can We Learn About Uncertain Tax Benefits from FIN 48?

31 Pages Posted: 3 Jun 2007  

Jennifer L. Blouin

University of Pennsylvania - Accounting Department

Cristi A. Gleason

University of Iowa - Department of Accounting

Lillian F. Mills

University of Texas at Austin - McCombs School of Business

Stephanie A. Sikes

University of Pennsylvania - Accounting Department

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Date Written: July 3, 2007

Abstract

FIN 48, Accounting for Uncertainty in Income Taxes, standardizes accounting for uncertain tax benefits and requires companies to disclose their tax reserve amounts. We summarize hand-collected disclosures related to tax reserves from 2005 through the first quarter of 2007. For the largest 100 non-financial, non-regulated firms, the reserve at adoption on January 1, 2007 is $78 billion excluding interest, or about two percent of assets. Of this $78 billion, an estimated $58 billion would affect earnings if ever released.

Keywords: FIN48, tax cushion, disclosure, FIN 48, uncertain tax benefits

JEL Classification: M41, M43, H25, H26

Suggested Citation

Blouin, Jennifer L. and Gleason, Cristi A. and Mills, Lillian F. and Sikes, Stephanie A., What Can We Learn About Uncertain Tax Benefits from FIN 48? (July 3, 2007). McCombs Research Paper Series No. ACC-02-07. Available at SSRN: https://ssrn.com/abstract=990508 or http://dx.doi.org/10.2139/ssrn.990508

Jennifer L. Blouin

University of Pennsylvania - Accounting Department ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States
215-898-1266 (Phone)

Cristi A. Gleason

University of Iowa - Department of Accounting ( email )

108 Pappajohn Business Building
Iowa City, IA 52242-1000
United States

Lillian F. Mills (Contact Author)

University of Texas at Austin - McCombs School of Business ( email )

Austin, TX 78712
United States

Stephanie A. Sikes

University of Pennsylvania - Accounting Department ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

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