What is a tax position?

A tax position is a position that an entity takes in a previously filed tax return or which it expects to take in a future tax return, which it uses to measure current or deferred income tax assets and liabilities. A tax position can yield a permanent reduction or deferral of income taxes payable.Click to see full answer. Thereof, what is an uncertain tax position?Uncertain Tax Positions. An UTP is defined as a position in a previously filed tax return or a position expected to be taken in a future tax return by the company.Also, what is payment of tax? A tax (from the Latin taxo) is a compulsory financial charge or some other type of levy imposed upon a taxpayer (an individual or legal entity) by a governmental organization in order to fund various public expenditures. Taxes consist of direct or indirect taxes and may be paid in money or as its labour equivalent. Similarly, you may ask, what is the meaning of tax implications? A taxable event refers to any event or transaction that results in a tax consequence for the party who executes the transaction. Common examples of taxable events for investors include receiving interest and dividends, selling securities for a gain, and exercising options.What are unrecognized tax benefits?An “unrecognized tax benefit” is the difference between a tax position that a company takes, or expects to take, on its income tax return and the benefit it recognizes on its financial statements.

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