Exempt Organizations Advisory - FASB Includes Tax-Exempt Nonprofits in FIN 48 Guidance

Catherine W. Wilkinson (cwilkinson@steptoe.com)
Suzanne Ross McDowell (smcdowell@steptoe.com)  

On July 8, the Financial Accounting Standards Board (FASB) directed its staff to draft final guidance on the applicability of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, to tax-exempt not-for-profit entities.  Previously, only tax-exempt not-for-profit entities that had issued public debt were subject to FIN 48.

On May 18th, FASB released for comment FIN 48-d, Application Guidance for Pass-through entities and Tax-Exempt Not-for-Profit Entities and Disclosure Modifications for Nonpublic Entities, a FASB Staff Position (FSP).  This FSP recommended that tax-exempt not-for-profit entities and other entities which do not pay income tax be required to apply FASB standards of accounting for uncertain tax positions.

The Board affirmed the staff recommendation and decided that the final Accounting Standards Update will be effective for periods ending after September 15, 2009.  Please see the Project Update on the FASB website for more information.