IRS drafts changes to corporate reporting of uncertain tax positions

The Internal Revenue Service posted draft versions of the upcoming Schedule UTP form and instructions used by corporations to report uncertain tax positions in an effort to improve the forms' usefulness.

The Schedule UTP and the UTP instructions for tax year 2022 and processing year 2023 can be found on the draft tax forms page on irs.gov.  The IRS is asking for taxpayer comments on the draft form before finalizing it. 

The IRS said Tuesday the draft changes to Schedule UTP and instructions will improve the form's usefulness. The Schedule UTP has been used by many corporations since tax year 2010 to report their uncertain tax positions. Corporations that file Forms 1120, 1120-F, 1120-L or 1120-PC are required to file a Schedule UTP if their total assets equal or exceed the applicable asset threshold for the tax year and the corporation records a liability for unrecognized tax benefits for a federal income tax position in its audited financial statements.

Andrew Harrer/Bloomberg

There are several notable changes in the draft form, including a new field for the incremental dollar amount of the uncertain tax positions taken. In addition, for tax positions reported on Schedule UTP, as opposed to Form 8275 (Disclosure Statement) or Form 8275-R (Regulation Disclosure Statement), there will be new columns to identify the rulings or regulation sections that are contrary to positions taken on the tax return.

On top of that, the revised Schedule UTP instructions include several more relevant examples and offer improved guidance on what's considered by the IRS to be an adequate disclosure for the concise description. 

The IRS is asking for comments on the draft form and instructions be emailed to lbi.utp.communications@irs.gov by Nov. 18, 2022.