The Internal Revenue Service is responding to feedback on its draft form and instructions for Schedule UTP for reporting uncertain tax positions by making some changes for next tax season.
In October, the IRS unveiled a set of draft changes to the Schedule UTP and the associated instructions. At the time, the IRS also asked for comments from stakeholders on the drafts. In response, the IRS
Contrary authorities in column (c): For taxpayers using Schedule UTP instead of Form 8275 to disclose a tax position they've identified as contrary to a rule, column (c) is the right column for disclosing that rule. The IRS said it routinely receives disclosures on Form 8275 citing the "authoritative sources" listed in the draft instructions. Thus, the draft instructions for that section included citations for guidance not published in the Internal Revenue Bulletin. In response to comments, though, the IRS has revised that section of the instructions to list only published guidance in the bulletin and court decisions.
Columns (i) to (k): The Schedule UTP instructions have been changed to clarify that the request in these columns isn't for the amount of the unrecognized tax benefit but instead for the amount of the line item on the taxpayer's return that includes the unrecognized tax benefit.
The revised instructions clarify the concise description section. The IRS's policy of restraint as described in
The IRS said Thursday it would treat a complete, accurate disclosure of a tax position on the appropriate year's Schedule UTP as if the corporation had filed a Form 8275, Disclosure Statement, or Form 8275-R, Regulation Disclosure Statement, about the tax position for the accuracy-related penalty due to disregard of rules or regulations or a substantial understatement of income tax.
