Private companies have won another deferral in complying with a 2006 order from the Financial Accounting Standards Board to disclose more about tax uncertainties.

FASB agreed—although reluctantly and not even unanimously—to defer the requirements of Financial Interpretation No. 48, Accounting for Uncertainty in Income Taxes for another year for non-public entities. FASB member Tom Linsmeier dissented, believing the Board should have provided only a narrow carve-out to address the real problem of FIN 48 application as it applies to pass-through entities. “He believes that because non-public enterprises that are tax-paying entities already have received up to a two-year deferral to understand and apply this interpretation, there is no reason to provide them with an additional deferral,” says a final FASB staff position providing the new deferral.

FIN 48 is the controversial interpretation of Financial Accounting Standard No. 109, Accounting for Income Taxes, requiring companies to provide tabular disclosures that would spell out where they have taken positions on their corporate tax returns that might not hold up under audit or legal challenge. It took effect in calendar year 2007, despite an outcry from public and non-public companies alike. Non-public companies won a deferral but FASB held firm on the timeline for public companies.

During the year of reprieve for non-public companies, FASB’s Private Company Financial Reporting Committee stumped for an exemption from FIN 48, but settled for at least some implementation guidance on how the interpretation would apply to pass-through entities. Those are entities like partnerships, S corporations, certain trusts, estates, and others that don’t pay taxes directly.

FASB promised to provide the guidance but got a bit sidetracked in 2008 with things like fair value, impairments, and off-balance-sheet problems, and the guidance didn’t get done. They tried to come up with a carve-out that would defer FIN 48 only for pass-through entities but found such a carve-out too complicated to create, given the complex structures under which many entities operate.

FASB says it will use the deferral period to develop the guidance necessary to apply FIN 48 to pass-through and not-for-profit organizations and to amend the disclosure requirements for non-public enterprises. In all likelihood, advocates for those organizations will continue to lobby for exemption, and their arguments may gain momentum as the United States moves closer to adopting International Financial Reporting Requirements for public companies. IFRS has no equivalent requirement, and the International Accounting Standards Board doesn’t like the model FASB has established.