Schedule UTP: IRS mandates disclosure of uncertain tax positions

The historic framework of the U.S. income tax has been one of voluntary compliance in which taxpayers self-report their income, deductions, and resulting tax liability This self-assessment system is based on the assumption that taxpayers will act honestly and in good faith in meeting their tax oblig...

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Bibliographic Details
Published in:The Tax Adviser 2011-05, Vol.42 (5), p.334
Main Authors: Hennig, Cherie J, Sonnier, Blaise M
Format: Magazinearticle
Language:English
Subjects:
Accounting
Audited financial statements
Audits
Consolidated tax returns
Corporate tax planning
Disclosure
Disclosure (Taxation)
Expenditures
Income tax returns
Income taxes
Laws, regulations and rules
R&D
Related parties
Research & development
Tax collection
Tax deductions
Tax regulations
Taxpayer compliance
Taxpayers
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Summary:The historic framework of the U.S. income tax has been one of voluntary compliance in which taxpayers self-report their income, deductions, and resulting tax liability This self-assessment system is based on the assumption that taxpayers will act honestly and in good faith in meeting their tax obligations. The IRS is charged with monitoring taxpayer compliance and collecting taxes rightfully due the government. Under the leadership of Commissioner Douglas Shulman, the IRS's emphasis in dealing with large corporate taxpayers has become one of voluntary disclosure requiring greater transparency and increased information flow, with the stated goals of identifying and resolving audit issues more quickly. In January 2010, the IRS announced a proposal to require large corporations to report uncertain tax positions on the new Schedule UTP, Uncertain Tax Position Statement, to be filed with their annual tax returns. This article explores the requirements of Schedule UTP and provides examples of the types of tax positions that taxpayers must disclose on that schedule.
ISSN:0039-9957