Instructions For Schedule Utp - Uncertain Tax Position Statement - Internal Revenue Service - 2010


Department of the Treasury
Internal Revenue Service
Instructions for Schedule
Uncertain Tax Position Statement
reserve was recorded because of an
accounting standards, either no reserve
Section references are to the Internal
expectation to litigate). A tax position
was required for a tax position taken on
Revenue Code unless otherwise noted.
taken on a tax return is a tax position
a tax return because the amount was
General Instructions
that would result in an adjustment to a
immaterial for audited financial
line item on that tax return if the
statement purposes, or that a tax
position is not sustained. If multiple tax
position was sufficiently certain so that
Purpose of Schedule
positions affect a single line item on a
no reserve was required, then the
tax return, report each tax position
corporation need not report the tax
Schedule UTP asks for information
separately on Schedule UTP. SeeTax
position on Schedule UTP.
about tax positions that affect the U. S.
position taken on a tax return on page
Transition rule. A corporation is not
federal income tax liabilities of certain
required to report on Schedule UTP a
corporations that issue or are included
tax position taken in a tax year
in audited financial statements and
Reporting current year and prior
beginning before January 1, 2010, even
have assets that equal or exceed $100
year tax positions. Tax positions
if a reserve is recorded with respect to
taken by the corporation on the current
that tax position in audited financial
year’s tax return are reported in Part I.
Reporting Uncertain
statements issued in 2010 or later. See
Tax positions taken by the corporation
Example 8.
on a prior year’s tax return are reported
Tax Positions
on Part II. A corporation is not required
Periods covered. File a 2010
on Schedule UTP
to report a tax position it has taken in a
Schedule UTP with the 2010 income
prior tax year if the corporation reported
tax return for the calendar year 2010
Tax positions to be reported.
that tax position on a Schedule UTP
and for a fiscal year that begins in 2010
Schedule UTP requires the reporting of
filed with a prior year tax return. If a
and ends in 2011. A corporation is not
each U.S. federal income tax position
transaction results in tax positions
required to file a Schedule UTP for a
taken by an applicable corporation on
taken on more than one tax return, the
short tax year that ends in 2010.
its U.S. federal income tax return for
tax positions must be reported in Part I
which two conditions are satisfied.
of the Schedule UTP attached to each
Who Must File
tax return in which a tax position is
1. The corporation has taken a tax
A corporation must file Schedule UTP
taken regardless of whether the
position on its U.S. federal income tax
with its income tax return if:
transaction or a tax position resulting
return for the current tax year or for a
from the transaction was disclosed in a
1. The corporation files Form 1120,
prior tax year.
Schedule UTP filed with a prior year’s
U.S. Corporation Income Tax Return;
2. Either the corporation or a related
tax return. See Example 6 and
Form 1120-F, U.S. Income Tax Return
party has recorded a reserve with
Example 7. Do not report a tax position
of a Foreign Corporation; Form 1120-L,
respect to that tax position for U.S.
on Schedule UTP before the tax year in
U.S. Life Insurance Company Income
federal income tax in audited financial
which the tax position is taken on a tax
Tax Return; or Form 1120-PC, U.S.
statements, or the corporation or
return by the corporation.
Property and Casualty Insurance
related party did not record a reserve
Company Income Tax Return;
for that tax position because the
Note. Part II will not be completed for
2. The corporation has assets that
corporation expects to litigate the
Schedule UTP for the 2010 tax year,
equal or exceed $100 million;
because tax positions taken before the
3. The corporation or a related party
2010 tax year are not reported. See
A tax position for which a reserve
issued audited financial statements
Transition rule below.
was recorded (or for which no reserve
reporting all or a portion of the
Concise description of tax position.
was recorded because of an
corporation’s operations for all or a
A corporation that reports a tax position
expectation to litigate) must be reported
portion of the corporation’s tax year;
in Part I (or Part II after the 2010 tax
regardless of whether the audited
year) is required to provide a concise
financial statements are prepared
4. The corporation has one or more
description of each tax position in Part
based on U. S. generally accepted
tax positions that must be reported on
III. See Examples 10 through 12.
accounting principles (GAAP),
Schedule UTP.
International Financial Reporting
Consistency with financial statement
Attach Schedule UTP to the
Standards (IFRS), or other
reporting. The analysis of whether a
country-specific accounting standards,
corporation’s income tax return. Do not
reserve has been recorded for the
including a modified version of any of
file it separately. A taxpayer that files a
purpose of completing Schedule UTP is
the above (for example, modified
protective Form 1120, 1120-F, 1120-L,
determined by reference to those
or 1120-PC must also file Schedule
reserve decisions made by the
UTP if it satisfies the four requirements
A tax position is based on the unit of
corporation or a related party for
set forth above.
account used to prepare the audited
audited financial statement purposes. If
financial statements in which the
the corporation or a related party
A corporation required to file
reserve is recorded (or in which no
determined that, under applicable
Schedule UTP also must check “Yes” to
Cat. No. 55028G


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