Dealing with schedule UTP disclosure requirements: tips for small and medium-sized entities

Much of the current economic and political debate in the US has focused on the role of small businesses in creating jobs. Reducing the regulatory burden is accepted by many as integral to encourage economic growth -- but a new IRS reporting requirement actually increases the regulatory burden on sma...

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Bibliographic Details
Published in:The CPA journal (1975) 2013-08, Vol.83 (8), p.40
Main Authors: Hennig, Cherie J, Mautz. R.D., Jr, Evans, Allison L
Format: Article
Language:English
Subjects:
Accounting
Analysis
Audits
Business expenses
Compliance
Corporate tax planning
Corporations
Deferred income taxes
Disclosure
Economic aspects
Economic growth
Financial disclosure
Financial statements
Reconciliation
Reporting requirements
Schedules
Small & medium sized enterprises-SME
Small and medium sized companies
Tax gap
Tax regulations
Tax returns
Taxation
Taxpayers
Transfer pricing
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Summary:Much of the current economic and political debate in the US has focused on the role of small businesses in creating jobs. Reducing the regulatory burden is accepted by many as integral to encourage economic growth -- but a new IRS reporting requirement actually increases the regulatory burden on small and medium-sized entities. Federal corporate tax returns that meet an asset threshold test must file Form 1120, Uncertain Tax Position Statement (i.e., Schedule UTP), to identify, describe, and quantify the impact of "uncertain" tax positions -- that is, those that might not withstand the scrutiny of an IRS audit. For the 2012 tax year, it extends to corporate taxpayers with assets of $50 million or more; in 2014, the threshold drops to $10 million. Expanding the Schedule UTP reporting requirement presents a potentially material burden for medium-sized corporate taxpayers. Certain planning techniques can help such entities minimize -- or even eliminate -- tax positions requiring disclosure.
ISSN:0732-8435