On Jan. 26, 2010, the IRS announced a proposal to require certain taxpayers to disclose uncertain tax positions (UTPs) annually in their federal income tax returns, including those UTPs for which the taxpayer may have reserved in the audited financial statements prepared under U.S. GAAP (in particular, FASB ASC 740-10, formerly contained in FIN 48), International Financial Reporting Standards (IFRS), or other country-specific financial accounting standards, or tax positions where a reserve has not been recorded due to an expectation to litigate.
The IRS invited comments on its proposal, and many taxpayers and organizations (including the AICPA) provided feedback prior to the June 1, 2010 deadline. The IRS considered the comments in the summer 2010.
On Sept. 7, 2010, the IRS released proposed regulations allowing the IRS to require corporations to file such a schedule, and held a public hearing on Oct. 19, 2010. The final regulations are effective on Dec. 15, 2010. Some major modifications and other changes from the original proposal were announced September 24, 2010 with the release of the final Schedule UTP and instructions for 2010.
For the 2010 and 2011 tax years, the disclosure on Schedule UTP will be applicable for taxpayers where the company or a related party issued audited financial statements where the company has both i) one or more uncertain tax positions that must be reported on Schedule UTP (as defined by the IRS in the instructions for Schedule UTP) and ii) total assets equal to or in excess of $100 million for:
Corporations filing Form 1120;
- Insurance companies filing Form 1120 L or 1120 PC; and,
- Foreign corporations filing Form 1120 F.
The total asset threshold will be reduced to $50 million in 2012 tax years, and reduced to $10 million starting with 2014 tax years. The IRS is considering whether to extend UTP reporting to other taxpayers beyond those noted above for 2011 or later years.
On March 23, 2011, the IRS posted seven frequently asked questions (FAQs) regarding Schedule UTP on their website. On July 19, 2011, the FAQs were modified and new FAQs were added.
While there are many documents associated with this topic located throughout our website, this page was created to gather together in one place many of the links necessary to take you to information regarding this issue and the AICPA's response.
AICPA Comment Letters:
- Comment Letter Submitted to the IRS regarding various fall 2010 guidance, Dec. 2, 2010
- Comment Letter Submitted to the IRS regarding the IRS proposal, June 1, 2010
- IRS UTP Resource page
- Rev. Proc. 2011-13 on adequate disclosure for purposes of penalties under Sec. 6662(d) and 6694(a), includes Schedule UTP
- Final Regulations
- IRS Internal Directive to the Field on the implementation of reporting of uncertain tax positions
- IRS Announcement 2010-76, modifications to existing Policy of Restraint in conjunction with the implementation of Schedule UTP
- IRS Announcement 2010-75, describing modifications to the disclosure of uncertain tax positions, applicable for 2010
- Proposed Regulations and notice of public hearing on October 15, 2010
- IRS Announcement 2010-30, including draft Schedule UTP and draft instructions
- IRS Announcement 2010-17, extending the comment period, and inviting comments on 3 additional questions
- IRS Announcement 2010-9, introducing and describing the proposal, and inviting comments on the Service's proposed approach, including 8 specific questions
- Commissioner Douglas Shulman's Prepared Remarks 01.26.2010 announcing the IRS proposal to require disclosure of UTPs
- Tax Ethical and Penalty Issues in the UTP Context: A Review After Five Years of Experience, The Tax Adviser, May, 2016
- Uncertain Tax Position FAQs Posted, Journal of Accountancy, March 24, 2011
- Tax Season Brings New Twists, Journal of Accountancy, Jan. 2011
- IRS Updates Guidance on Adequate Disclosure of Positions, Journal of Accountancy, Dec. 29, 2010
- Final Regs Issued Requiring Uncertain Tax Positions Disclosure Statement , Journal of Accountancy, Dec. 13, 2010
- Article in November 2010 Journal of Accountancy regarding IRS Amends Plan for Uncertain Tax Positions: reporting requirement to be phased in; maximum tax adjustment disclosure no longer required
- IRS Set to Roll Out Uncertain Tax Position Schedule, The Tax Adviser, Nov. 2010
- Current Developments in S Corporations (Part I), The Tax Adviser, Oct. 2010
- IRS Releases Final Schedule UTP, Incorporates Changes, Journal of Accountancy, Sept. 24, 2010
- IRS Issues Proposed Regs Requiring Disclosure of Uncertain Tax Positions, Journal of Accountancy, Sept. 8, 2010
- Transparency and Compliance in Light of the New Schedule UTP, The Tax Adviser, Aug. 2010
- AICPA, Others Ask IRS to Withdraw UTP Reporting Plan , Journal of Accountancy, Aug. 2010
- Article in July 2010 Journal of Accountancy regarding Uncertain Tax Positions Draft Schedule Released
- Reporting Uncertain Tax Positions to the IRS, The Tax Adviser, May 2010
- IRS Announces Release of Draft Schedule to Report Uncertain Tax Positions , Journal of Accountancy, April 19, 2010