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reserve in its 2011 audited financial

and the tax position involves the

to report a tax position taken in a tax

statements with respect to its 2011 tax

partner’s distributive share of an item of

year beginning before January 1, 2010.

position. Because the corporation did

income, gain, loss, deduction, or credit

See Transition rule on page 1.

not record a reserve with respect to the

of the partnership, enter the EIN of the

Information from Related

tax position taken in 2010, the 2010 tax

partnership. A pass-through entity is

Parties

position is not required to be reported

any entity listed in section 1(h)(10). If

Check this box if the corporation was

on Schedule UTP. However, because

the tax position is not related to a tax

unable to obtain sufficient information

the corporation recorded a reserve for

position of a pass-through entity, leave

from one or more related parties and

the 2011 tax position in its 2011 audited

this blank. Enter “F” if the pass-through

was therefore unable to determine

financial statements, the 2011 tax

entity is a foreign entity that does not

whether a tax position taken in a prior

position must be reported in Part I of

have an EIN.

year’s tax return is required to be

Schedule UTP filed with its tax return

Column (e). Major Tax Position

reported on Part II of this schedule.

for the 2011 tax year.

Check this box if the relative size of the

Column (a). UTP No.

Specific Instructions

tax position is greater than or equal to

Continue the numeric sequence based

0.10 (10%). The relative size of a tax

on the last UTP number entered on

position is the amount computed by

Part I Uncertain Tax

Part I. For example, if the last UTP

dividing the size of that position by the

listed on Part I is 10, enter 11 for the

sum of all of the sizes for all of the tax

Positions For the

first UTP listed on Part II.

positions listed on Parts I and II.

Current Tax Year

Disregard expectation to litigate

Column (b). Primary IRC

positions for column (e) purposes.

Sections

Round amounts using rules similar to

When to Complete Part I

See the instructions for Part I, column

those on page 5 of the Instructions for

Part I is used to report tax positions

(b).

Form 1120 for rounding dollar amounts.

taken by the corporation on its 2010 tax

Column (c). Timing Codes

Column (f). Ranking of Tax

return.

Position

See the instructions for Part I, column

Information from Related

(c).

Enter a letter and a ranking number for

Parties

each tax position. Use the letter T for

Column (d). Pass-Through

Check the box at the top of Part I if the

transfer pricing positions and the letter

Entity EIN

corporation was unable to obtain

G for all other tax positions.

See the instructions for Part I, column

sufficient information from one or more

Rank all tax positions in Parts I and

(d).

related parties and was therefore

II together, regardless of type. Starting

unable to determine whether a tax

Column (e). Major Tax Position

with the largest size, assign the number

position taken on its current year’s tax

1 to the largest, the number 2 to the

See the instructions for Part I, column

return is required to be reported in Part

next largest, and so on, in order. This

(e).

I of this schedule.

number is the ranking number for the

Column (f). Ranking of Tax

Column (a). UTP No.

tax position. Expectation to litigate

Position

positions may be assigned any ranking

Enter a number in column (a) for each

See the instructions for Part I, column

number.

tax position reported. A corresponding

(f).

number will be used in Part III for

For example, the corporation has 1

reporting the concise description of the

transfer pricing tax position and 2 other

Column (g). Year of Tax

tax position. Begin with the number 1

tax positions. The transfer pricing

Position

and do not skip any whole numbers.

position is the largest and one of the

List the prior tax year in which the tax

other tax positions is the expectation to

Column (b). Primary IRC

position was taken and the last month

litigate position. The expectation to

Sections

of that tax year, using a six-digit

litigate position is assigned a rank of 2.

number. For example, enter 201012 for

Provide the primary IRC sections (up to

Enter T1 for the transfer pricing

tax years ending December 31, 2010,

position, G2 for the expectation to

three) relating to the tax position.

and 201108 for tax years ending

litigate position, and G3 for the second

Column (c). Timing Codes

August 2011.

other tax position.

Check “T” for temporary differences,“P”

Part III Concise

[Part II will not be

for permanent differences, or check

both “T” and “P” for a tax position that

Description of UTPs

completed in 2010]

creates both a temporary and

permanent difference. Categorization

When to Complete Part III

Part II Uncertain Tax

as a temporary difference, permanent

Part III must be completed for every tax

difference, or both must be consistent

Positions For Prior Tax

position listed in Part I (or Part II in tax

with the accounting standards used to

years after 2010). Enter the

prepare the audited financial

Years

corresponding UTP number from Part I,

statements.

column (a), related to the description.

Column (d). Pass-Through

When to Complete Part II

Concise description. Provide a

Entity EIN

Part II will be used in tax years after

concise description of the tax position,

If the tax position taken by the

2010 to report tax positions taken by

including a description of the relevant

corporation relates to a tax position of a

the corporation in a prior tax year that

facts affecting the tax treatment of the

pass-through entity, enter the EIN of

have not been reported on a Schedule

position and information that

the pass-through entity to which the tax

UTP filed with a prior year’s tax return.

reasonably can be expected to apprise

position relates. For example, if the

It will not be completed in 2010,

the IRS of the identity of the tax

corporation is a partner in a partnership

because corporations are not required

position and the nature of the issue. In

-4-

Instructions For Schedule Utp - Uncertain Tax Position Statement - Internal Revenue Service - 2010 Page 4

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