Federal Tax Alert:

The Latest Word on FIN 48 - Accounting
for Uncertainty in Tax Positions

On May 18, 2009, FASB issued a proposed FASB Staff Position, FSP FIN 48-d, "Application Guidance for Pass-through Entities and Tax-Exempt Not-for-Profit Entities and Disclosure Modifications for Nonpublic Entities."

Details of FASB Staff Position, FSP FIN 48-d
This proposed FSP is in response to requests for guidance on how FIN 48 applies to pass-through and tax-exempt nonprofit entities as well as assertions that certain FIN 48 disclosures were not useful to users of private company financial statements. It addresses how the general principles on tax positions, tax attribution, and scope of financial statements of a group of related entities apply to pass-through entities and tax-exempt nonprofit entities. It also includes modifications to the disclosure requirements for nonpublic entities.

No Further Deferral of FIN 48 for Nonpublic Entities is Likely
It is clear from FASB's deliberations that there will be no further deferrals of FIN 48. As such, private entities that have not already adopted FIN 48 should adopt FIN 48 as of the beginning of the fiscal year beginning after December 15, 2008.

The following steps should be taken to adopt FIN 48:

• Perform an overall evaluation of tax positions taken or not taken
• Have a discussion with your audit team to ensure expectations are understood
• Consult your tax advisors to ensure all uncertain tax positions have been identified and next steps are drafted

These steps can take anywhere from several weeks to several months, depending upon the number and type of tax positions requiring evaluation, the accessibility and format of documentation required to support the positions, and availability of client personnel to assist in the process. As a result, it is important that the process be started in advance of the annual audit, since the final audit report cannot be issued until the FIN 48 component has been completed.

Should you have any questions regarding the adoption of FIN 48, please contact MFA Partners Rosanna DiFilippo at (978) 557-5373 or Craig Eaton at (978) 557-5360.