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As the national professional association of certified public accountants comprised of 360,000 members, the AICPA is uniquely positioned to comment on the IRS proposal concerning increased reporting of uncertain tax positions (UTPs). Our members advise clients on federal, state, and international tax matters and prepare income and other tax returns for millions of Americans and businesses. They provide services to individuals, not-for-profit organizations, small and medium-sized businesses, as well as America’s largest businesses. It is from this broad perspective that we offer our comments on the IRS proposal regarding UTPs. These comments, divided into two sections, provide our reactions to the proposal.

In the first section, we set forth our policy concerns about the UTP proposal and our recommendation that because of those concerns, the proposal be withdrawn or possibly revised.

In recent public pronouncements, the IRS has communicated its intention to proceed with implementation of the UTP proposal. If the IRS proceeds with the disclosure regime as described in its announcements, we believe it is in the best interest of all parties that the UTP proposal be substantially revised to address the tax, financial accounting, and financial statement auditing issues addressed herein. Accordingly, in addition to our broader policy concerns with the proposal, we offer in the second section of these comments our constructive criticism through our responses to the questions posed in Announcements 2010-9 and 2010-17. In the second section, we also offer suggestions on amendments that may help mitigate some of the definitional and burden challenges inherent in the proposal.

The AICPA understands and supports the IRS objective of increasing the certainty, consistency and efficiency of the tax compliance process. We believe, however, that the procedures as outlined in Announcements 2010-9, 2010-17, and 2010-30 could significantly impede rather than enhance the goals articulated by the IRS. Our most significant concerns with the IRS proposal are that the proposed UTP disclosure regime:

Potentially undercuts the integrity of the financial statement process; Imposes increased burden and cost on taxpayers which will disproportionate to any actual benefit to the IRS;

be

substantially

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