Today’s CFO Journal reported that a warning from the Public Company Accounting Oversight Board (“PCAOB”) late last year has resulted in much more stringent external audits being conducted by auditors of public companies. PCAOB has been auditing the auditors to make sure public companies’ financials are not being rubber stamped. Increased audit scrutiny can be a great thing for potential IRS whistleblowers. When auditors take a closer look at uncertain tax positions this can result in far greater detail being in the tax accrual workpapers. As we have noted in the past, Schedule UTP has done little to change company behavior. Knowledgeable insiders with access to a company’s tax accrual workpapers could provide extremely useful information to the IRS and be rewarded handsomely. Large companies maintain billions of tax reserves to account for tax positions where the company believes the IRS is more likely to prevail on the issue than the company. We know firsthand that IRS whistleblowers with access to information about the tax positions that make up those reserves can successfully present a submission to the IRS. Now, more than ever, there are great opportunities for a tax department insider to make a meaningful impact on the tax gap.
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