(Dow Jones) A plan to make companies big and small disclose any risky tax positions is getting a very bad reaction from tax advisors.

The Internal Revenue Service proposal would require corporations with more than $10 million to flag their aggressive tax positions. It would affect not just big companies but also some high-net-worth individuals, including those who invest in hedge funds and private equity.

Groups including the American Institute of Certified Public Accountants, the American Bar Association and the Illinois CPA Society are telling the IRS in no uncertain terms they don't like the idea. Among their complaints: It could be expensive to taxpayers and pit tax advisors against clients.

IRS tax proposals generally prompt a lot of lobbying, but this one is notable for the particularly strong reaction it is getting, says Kip Dellinger, a certified public accountant in Santa Monica, Calif. He describes tax professionals as "panicked."

Dellinger himself supports the proposal. "When people start saying you don't have the right to question a tax position, it looks as though you're hiding the ball," he explains.

Affected companies would have to file a new form known as a Schedule UTP, an abbreviation for uncertain tax positions. Until now, companies have held a cash reserve in place in case the IRS questions aggressive tax positions, but have not had to disclose them.

The government says it wants to be sure companies are complying with tax rules. The AICPA, in comments it submitted, contends the new rule could "significantly impede rather than enhance the goals articulated by the IRS."

Besides adding new costs and hurting small businesses, the proposal could create "new tension among and between taxpayers, tax advisors and the IRS," the AICPA says. The group wasn't immediately available for additional comment.

The American Bar Association Section of Taxation says the proposal should be withdrawn "in the interests of sound tax administration." The disclosure proposals are "inimical to the fundamental protections afforded by the attorney-client privilege, the tax practitioner's privilege, and the attorney work product doctrine." The ABA group was not immediately available for further comment.

Diana Wollman, a partner in the New York office of law firm Sullivan & Cromwell LLP, has noted the Schedule UTP could pit partners in investment partnerships, including hedge funds, against one another. If a partnership takes an aggressive position, a corporate partner may feel obliged to file a UTP highlighting it. Individual partners may then end up with adjustments in their filings, said Wollman.