More likely than not: A comparison of FIN 48 and the tax penalty standard

  • Print-friendly version
Tax accounting insights 06/02/2008 by Tax accounting services
More likely than not: A comparison of FIN 48 and the tax penalty standard

At a glance

Efforts intended to strengthen objectivity and transparency with respect to tax planning, compliance and conflict resolution have converged around the use of a MLTN (more likely than not) standard. This PwC publication explores the FIN 48's more likely than not (MTLN) standard on whether a position taken, or expected to be taken, in a tax return is more likely than not to be sustained.

Efforts intended to strengthen objectivity and transparency with respect to tax planning, compliance, and conflict resolution have converged around the use of a "more likely than not" standard. A spectrum of consequences may now depend upon whether a position taken, or expected to be taken, in a tax return is more likely than not to be sustained.

Yet, the definition and significance of more likely than not ("MLTN") is not identical across the contexts in which it is applied. Accordingly, it is important to consider each context carefully, both to ensure consistency, where appropriate, and understand potential divergences that may exist.