The IRS on Monday announced that it was releasing draft Schedule UTP and draft instructions as part of its initiative to require certain business taxpayers to report uncertain tax positions on their returns (Announcement 2010-30). (See previous JofA coverage of this proposal. The AICPA Tax Division has prepared a briefing on the IRS proposal; click here to read more.)
According to the announcement, taxpayers with uncertain tax positions and assets of $10 million or more will be required to file Schedule UTP beginning with the 2010 tax year if they, or a related entity, filed audited financial statements. Affected taxpayers include corporations required to file Form 1120, U.S. Corporation Income Tax Return, insurance companies required to file Form 1120L, U.S. Life Insurance Company Income Tax Return, or 1120PC, U.S. Property and Casualty Insurance Company Income Tax Return, and foreign corporations required to file Form 1120F, U.S. Income Tax Return of a Foreign Corporation.
For 2010 tax years, the IRS will not require Schedule UTP from taxpayers who file other forms in the 1120 series, or from pass-through entities or tax-exempt organizations.
Under the draft instructions, a taxpayer who properly files Schedule UTP will be treated as having filed Form 8275, Disclosure Statement, or 8275-R, Regulation Disclosure Statement, and the IRS says it is considering other circumstances in which a tax position reported on Schedule UTP need not be reported elsewhere on the return or another disclosure statement.
The IRS has requested comments on the draft schedule and instruction, as well as on its proposal to require reporting of uncertain tax positions on the tax return, by June 1. Comments can be submitted via e-mail to firstname.lastname@example.org, with “Announcement 2010-9” in the subject line.