The accounting for income taxes has, and will continue to, undergo significant changes. FASB Interpretation (FIN) 48 significantly revised the financial accounting for income taxes in 200 7 . In our sample, 87% of firms were immediately affected in terms of a restatement of beginning 2007 retained earnings. After enactment, discretionary accruals significantly decreased as firms apparently did not find other methods (other than through income tax accounts) to manage earnings. On the other hand, FIN 48 appears to have caused disruption in the reporting standards for income taxes, insofar as an increase in variability in effective tax rates across firms both the year before adoption, and the year of adoption. International Financial Reporting Standards (IFRS) will also make significant changes in 2012. We comment on the likely effects of IFRS adoption on US firms. Then, we examine the less volatile effects of IFRS on effective tax rates for European companies after 2004 as an example of what might happen in the US.