Update on Schedule UTP Comments

By and on November 14, 2022

We previously discussed the Internal Revenue Service’s (IRS) announcement regarding draft changes to Schedule UTP, Uncertain Tax Position Return Statement, and Instructions to Schedule UTP (Form 1120). The IRS requested comments by November 18, 2022.

On November 14, 2022, we submitted our comments to the IRS outlining some of our concerns with the draft changes, focusing primarily on the scope of disclosure. We made the following recommendations:

  • Reconsider whether any changes should be made to Schedule UTP given the current rules in place regarding other disclosures (g., Forms 8275 and 8275-R) and the serious privilege concerns raised by the additional disclosure requirements.
  • Remove the requirement to disclose any positions that are “contrary” to any authorities or, at a minimum, to any Private Guidance.
  • If changes are made to Schedule UTP, work with taxpayers to determine the appropriate standard for determining whether there is “contrary” authority and what steps a taxpayer or return preparer must take before being able to satisfy the jurat requirement.
  • Issue published guidance clarifying that proper disclosure on Schedule UTP will satisfy the adequate disclosure requirement for purposes of both the disregard of rules and regulations and substantial understatement of tax grounds for imposing penalties under I.R.C. § 6662.
  • If changes are made to Schedule UTP, delay the effective date to the 2023 tax year (processing year 2024).

We will continue to track potential changes to Schedule UTP and Form 1120 and will provide updates as they are made known.

Andrew R. Roberson
Andrew (Andy) R. Roberson focuses his practice on tax controversy and litigation matters. He represents clients before the Internal Revenue Service (IRS) Examination Division and Appeals Office and has been involved in over 75 matters at all levels of the federal court system, including the US Tax Court and Federal District Courts, several US Courts of Appeal and the Supreme Court. Andy has experience settling tax disputes through alternative dispute resolution procedures, including Fast Track Settlement and Post-Appeals Mediation, and in representing clients in Compliance Assurance Process (CAP) audits. In addition to representing corporations and partnerships in tax disputes, he also represents high net-worth individuals and assists taxpayers needing to make voluntary disclosures. Read Andy Roberson's full bio.


Kevin Spencer
Kevin Spencer focuses his practice on tax controversy issues. Kevin represents clients in complicated tax disputes in court and before the Internal Revenue Service (IRS) at the IRS Appeals and Examination divisions. In addition to his tax controversy practice, Kevin has broad experience advising clients on various tax issues, including tax accounting, employment and reasonable compensation, civil and criminal tax penalties, IRS procedures, reportable transactions and tax shelters, renewable energy, state and local tax, and private client matters. After earning his Master of Tax degree, Kevin had the privilege to clerk for the Honorable Robert P. Ruwe on the US Tax Court. Read Kevin Spencer's full bio.

STAY CONNECTED

TOPICS

ARCHIVES