Is an open tax years disclosure required? Yes, for entities with unrecognized tax benefits.
Open Tax Years Disclosure
ASC 740-10-50 Unrecognized Tax Benefit Related Disclosures does not require an open tax years disclosure when there is no “unrecognized tax benefit.” Many CPAs (including myself) believed that a disclosure of the open tax years was required, even when an entity had no unrecognized tax benefit (or uncertain tax position).
An AICPA non-authoritative Technical Question and Answer (TPA 5250.15) had said that nonpublic entities should disclose open tax years regardless of whether the entity had uncertain tax positions; that guidance has been removed. The Center for Plain English Accounting provided this clarification.
The AICPA clarified that the open tax years disclosure is not required for companies without unrecognized tax positions, but some peer reviewers are incorrectly writing MFCs and even FFCs related to financial statements without the open tax years disclosure, even for entities without unrecognized tax positions.
The May 2015 Peer Review Update (a newsletter provided to peer reviewers) stated:
Peer reviewers should consider recent guidance that clarifies that a nonpublic entity is required to disclose a description of tax years that remain subject to examination (“open tax years”) only when the entity has uncertain tax positions (i.e. material unrecognized tax benefits).