Instructions For Schedule Utp (Form 1120) - 2017
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62017
Department of the Treasury
Internal Revenue Service
Instructions for
Schedule UTP (Form 1120)
Uncertain Tax Position Statement
of any of the above (for example,
subsidiary’s tax positions in its former
Section references are to the Internal Revenue
Code unless otherwise noted.
modified GAAP).
group’s prior return, the subsidiary
should report the tax position on Part II
If the corporation reconsiders
Future Developments
of the Schedule UTP filed with its
whether a reserve is required for a tax
For the latest information about
current tax return, if it files a separate
position and eliminates the reserve in an
developments related to Schedule UTP
return. If the subsidiary is included in the
interim audited financial statement
(Form 1120) and its instructions, such
return of another consolidated group
issued before the tax position is taken in
as legislation enacted after they were
that is required to file Schedule UTP, the
a return, the corporation need not report
published, go to IRS.gov/ScheduleUTP.
common parent of that consolidated
the tax position to which the reserve
group should report the tax position on
relates on Schedule UTP.
General Instructions
Part II of the Schedule UTP filed with its
A tax position is based on the unit of
current tax return.
account used to prepare the audited
Purpose of Schedule
Concise description of tax position.
financial statements in which the
A corporation that reports a tax position
reserve is recorded (or in which no
Schedule UTP asks for information
in either Part I or Part II is required to
reserve was recorded because of an
about tax positions that affect the U.S.
provide a concise description of each
expectation to litigate). A tax position
federal income tax liabilities of certain
tax position in Part III. See Examples 12
taken on a tax return is a tax position
corporations that issue or are included
and 13.
that would result in an adjustment to a
in audited financial statements and have
line item on that tax return if the position
assets that equal or exceed $10 million.
Consistency with financial statement
is not sustained. If multiple tax positions
reporting. The analysis of whether a
Reporting Uncertain
affect a single line item on a tax return,
reserve has been recorded for the
report each tax position separately on
Tax Positions
purpose of completing Schedule UTP is
Schedule UTP. See Tax position taken
determined by reference to those
on Schedule UTP
on a tax return, later.
reserve decisions made by the
Tax positions to be reported.
corporation or a related party for audited
Reporting current year and prior
financial statement purposes. If the
Schedule UTP requires the reporting of
year tax positions. Tax positions
each U.S. federal income tax position
corporation or a related party
taken by the corporation on the current
taken by an applicable corporation on
determined that, under applicable
year’s tax return are reported in Part I.
accounting standards, either no reserve
its U.S. federal income tax return for
Tax positions taken by the corporation
which two conditions are satisfied.
was required for a tax position taken on
on a prior year’s tax return are reported
a tax return because the amount was
on Part II. A corporation is not required
1. The corporation has taken a tax
immaterial for audited financial
to report a tax position it has taken in a
position on its U.S. federal income tax
statement purposes, or that a tax
prior tax year if the corporation reported
return for the current tax year or for a
position was sufficiently certain so that
that tax position on a Schedule UTP
prior tax year.
no reserve was required, then the
filed with a prior year tax return. If a
2. Either the corporation or a related
corporation need not report the tax
transaction results in tax positions taken
party has recorded a reserve with
position on Schedule UTP. For a
on more than one tax return, the tax
respect to that tax position for U.S.
corporation subject to FASB
positions must be reported in Part I of
federal income tax in audited financial
Interpretation No. (FIN) 48, a tax
the Schedule UTP attached to each tax
statements, or the corporation or related
position is considered “sufficiently
return in which a tax position is taken
party did not record a reserve for that
certain so that no reserve was required,”
regardless of whether the transaction or
tax position because the corporation
and therefore need not be reported on
a tax position resulting from the
expects to litigate the position.
Schedule UTP, if the position is “highly
transaction was disclosed in a
certain” within the meaning of FIN 48.
Schedule UTP filed with a prior year’s
A tax position for which a reserve
was recorded (or for which no reserve
tax return. See Example 7 and
Transition rule. A corporation is not
Example 8. Do not report a tax position
was recorded because of an
required to report on Schedule UTP a
on Schedule UTP before the tax year in
expectation to litigate) must be reported
tax position taken in a tax year
regardless of whether the audited
which the tax position is taken on a tax
beginning before January 1, 2010, even
return by the corporation.
financial statements are prepared based
if a reserve is recorded with respect to
on U.S. generally accepted accounting
If, after a subsidiary member leaves a
that tax position in audited financial
principles (GAAP), International
consolidated group, the subsidiary, or a
statements issued in 2010 or later. See
Financial Reporting Standards (IFRS),
related party of the subsidiary, records a
Example 9. In addition, a corporation is
or other country-specific accounting
reserve in an audited financial
not required to report accruals of
standards, including a modified version
statement with respect to one of the
interest on a tax reserve recorded with
Nov 01, 2017
Cat. No. 55028G
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