DMI48FAQs

Issues/Adjustments

Does the system compute penalties automatically?

No, penalties are treated as stand-alone events, like tax events. Generally, penalties are incurred much less frequently so we have not added the automation their computation in DMI48. 

Does the system track foreign interest and penalties on taxes and how are the rates/details determined?

Federal and state interest rates can be downloaded from DMI's web site (www.dmitax.com); however, foreign interest rates are maintained by the user. Any foreign penalties are entered as adjustments, similar to US Federal and State penalties.

Does the system track the uncertain tax positions (UTPs) in the foreign currency of the local units?

Yes, UTPs can be tracked in foreign currencies with exchange and/or translation gains/(losses) automatically calculated.

What is the difference between Remeasurement and Translation gains/losses for foreign currency?

The Local currency is the currency in which the user enters their data and is the currency the transaction is recorded in.  The Functional currency is the primary currency in which the subsidiary operates.  The Reporting currency is the currency in which the parent company must file financial statements/reports in and is by default US Dollars.  Adjustments from the local currency to the functional currency are labeled Remeasurement and any gains/losses are included in income.  Adjustments from functional currency to reporting currency are labeled as Translation and any gains/losses are not included in income but are accumulated in a component of equity.

How do I enter Temporary positions that have only an interest impact, but no tax liability impact?

Enter the initial tax liability adjustment with a reversing entry.  The reversing entry offsets the tax impact but allows interest to accrue.  The selection of 2020 for the reversing tax period is arbitrary, but the idea is to push out the date far enough so that you don't have to update it each year.  For example,

2007   Tax   Issue 1           $100       3/15/2008
2020   Tax   Issue 1          ($100)     3/15/2021


If I enter a jurisdiction Return Due Date incorrectly and then enter tax adjustments with that incorrect date, is there a way to update every date at once or will I need to go into the jurisdiction screen and the tax adjustments screen and change each occurrence of the date?

If the incorrect RDD is entered in the jurisdiction/period screen, the user must update the RDD in the Jurisdiction screen and also each individual tax adjustment occurrence in the Tax Adjustments screen.  Once the Jurisdiction Screen Return Due Date is revised, subsequently added adjustments will automatically reflect the revised date.

I’ve added a new adjustment, but I can’t enter an amount in the new line.  How can I enter the tax adjustment amount?

Check to see if the “auto” option on the Probability Table is checked.  Adding a new transaction will retain this option, if it was checked in the previously selected adjustment line.

How can I exclude interest calculations on certain adjustments?

Enable the No Interest Transactions feature by checking the box in the General tab under Data Parameters.  After the box is checked, there will be checkboxes on the Tax Adjustments screen in a new column 'NI' for No Interest .  Check the IN box for those positions you do not want to interest computed.

How are adjustments input into the system? Will the user be able to import formatted excel files with revised balances (or adjustments to those balances)?

Data can be loaded into the DMI48 system using one of two methods.  First, you can input data through manual data entry in the Tax Adjustments screen. In addition, the DMI48 software also supports importing data from Excel via comma delimited (.csv) files. Instructions for how to format your data for automatic import can be found in the “Import from CSV section” of the Help file. 

Can the system link both sides of an adjustment between jurisdictions (i.e., expense re-billed from one jurisdiction to another)?

A federal adjustment can feed up to 50 state adjustments based on the establishment of an apportionment schedule. This allows the federal entry to drive to each of the states adjustments with a single click, while maintaining complete control over which states are impacted. 

When the percentages and amounts are entered in the probability table for an adjustment, how does the program know the amount that was claimed on the tax return? Should the amounts being entered be the possible final amounts or the possible adjustment amounts?

The program will sort the probability amounts for liabilities from largest to smallest. The largest value is presumed to be the amount already taken on the return or subsequent adjustment.

For disclosure purposes as a public utility company, we have to breakdown our consolidated totals by 7 registrants – consisting of 6 subsidiaries and “everyone else.” Is there an effective way to capture data within a given data file to produce the totals to satisfy our reporting requirements?

You can set up 7 different entities, including an entity called “everyone else”. Then select ‘by Entity’ under the report options to see the results for each entity.

An adjustment was settled in the previous quarter for an incorrect amount. Should I correct this by changing the settled transaction in this quarter’s file (i.e. the adjustment amount or tax rate)?

No, transactions that have been settled in a previous quarter’s file should not be modified in your current quarter’s file. Doing so would impact the reporting opening balances of your current quarter file and consequently the audit trail. Instead, create a new adjustment record in the current file for the difference and settle it with the beginning date of the current quarter.

What practices have you seen in recording derecognized income tax refunds in the DMI FIN 48 software? [e.g. negative entries]

If you had recognized the gain on a potential abatement and then the amount fell to less than 50% so the item was de-recognized, you would simply change the % in the Probability Table and the adjustment value would be automatically reduced. When compared to a previous DMI48, file it will recognize the change as an Addition for Prior Years’ tax obligations in the Disclosure tabular roll forward.

What if I've changed the Status to 'SET' for Settled, but now I want to change it to 'SOL' and the system has locked the Status?

If you detach the Last Provision and Last Disclosure files on the main screen, you can update the Status for an adjustment as long as it's a Status change made in the current reporting period.

Tax and Interest Software

FIN 48 Software

FIN 48 software for managing your uncertain tax positions and calculating interest on federal, state and foreign taxes.

Interest and Penalty Software

DMI's interest and penalty software is a single product solution for federal and state interest computations, including global interest netting.

Services

FIN 48 Implementation Services

Conversion of FIN 48 and reserve UTP data for use with DMI48 software.

Resources

Research links to relevant topic information including Schedule UTP.

Video Demo

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DMI48 Software Demo

UTP/FIN48 compliance and related interest computation software demonstration.
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InterestNet Software Demo

Interest and penalty computation software demonstration.
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Interest for FIN 48

Learn why interest matters for FIN 48.
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