Treasury Inspector General for Tax Administration
October 6, 2010
TIGTA - 2010-61
Contact: Karen Kraushaar
The Internal Revenue Service (IRS) is preparing for the potential transition of U.S.-based publicly held companies to International Financial Reporting Standards, according to a report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).
International Financial Reporting Standards (IFRS), which are issued by the International Accounting Standards Board, are a set of accounting standards that serve as a framework for financial reporting.
U.S.-based companies currently prepare annual financial statements in accordance with U.S. Generally Accepted Accounting Principles (GAAP). The Securities and Exchange Commission is considering whether to require U.S. companies to use the international standards so financial information can be better compared with overseas companies. The IRS began developing plans for strategic and operational activities related to the adoption of the IFRS in 2009.
TIGTA found that the IRS: is training employees about IFRS concepts and potential issues; working with the tax preparer community to identify and outline IFRS implementation concerns; and developing procedures to address issues related to IFRS conversion efforts.
"The IRS is appropriately laying the groundwork for its increased oversight of international taxation by gaining an understanding of the International Financial Reporting Standards," said J. Russell George, the Treasury Inspector General for Tax Administration.
TIGTA did not make any recommendations in this audit and the IRS did not provide any comments on a draft of the report.
To review the report, including the scope and methodology, go to: http//:www.treas.gov/tigta/auditreports/2010reports/201030112fr.pdf.
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