The Internal Revenue Service has released a draft schedule and instructions for corporations to report uncertain tax positions on their tax returns.
Announcement 2010-30 releases the draft schedule, Schedule UTP, accompanied by draft instructions that provide a further explanation of the Services proposal requiring reporting of uncertain tax positions, and invites public comment on the draft schedule and instructions.
The schedule and instructions will be finalized after the IRS has received and considered all of the comments regarding the overall proposal and the draft schedule and instructions.
The draft schedule and instructions provide that, beginning with the 2010 tax year, the following taxpayers with both uncertain tax positions and assets equal to or exceeding $10 million will be required to file Schedule UTP if they or a related-party issued audited financial statements:
Corporations that are required to file a Form 1120, U.S. Corporation Income Tax Return
Insurance companies that are required to file a Form 1120 L, U.S. Life Insurance Company Income Tax Return or Form 1120 PC, U.S. Property and Casualty Insurance Company Income Tax Return; and,
Foreign corporations that are required to file Form 1120 F, U.S. Income Tax Return of a Foreign Corporation.
The draft schedule and instructions also provide that, for 2010 tax years, the IRS will not require a Schedule UTP from Form 1120 series filers other than those identified above (such as real estate investment trusts or regulated investment companies), pass-through entities, or tax-exempt organizations. The IRS will determine the timing of the requirement to file Schedule UTP for these entities after comments have been received and considered.
The IRS is also reviewing the extent to which the proposed Schedule UTP duplicates other reporting requirements, such as Forms 8275, Form 8275-R, 8886, and the Schedule M-3
Comments on the draft form and instructions should be submitted by June 1.
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