Instructions For Schedule Utp Draft - Uncertain Tax Positions Statement

Draft: 4/19/2010

Department of the Treasury

Internal Revenue Service

Instructions for

Schedule UTP

Uncertain Tax Positions Statement

Use for Forms 1120, 1120-F, 1120-L, and 1120-PC

Section references are to the Internal Revenue Code unless otherwise noted.

General Instructions

Purpose of Schedule

Schedule UTP asks for information about tax positions that affect the United States federal income tax

liabilities of certain corporations that issue or are included in an audited financial statement and have

assets equal to or exceeding $10 million.

Reporting Uncertain Tax Positions on Schedule UTP

Tax positions to be reported. Schedule UTP requires the reporting of a corporation’s federal income

tax positions for which the corporation or a related party has recorded a reserve in an audited financial

statement. Schedule UTP also requires the reporting of tax positions taken by the corporation in a tax

return for which a reserve has not been recorded by the corporation or a related party based on an

expectation to litigate or an IRS administrative practice.

A tax position is required to be reported on a Schedule UTP attached to a particular tax year’s return if (a)

at least 60 days before filing the tax return a reserve has been recorded with respect to that tax position,

or at least 60 days before filing the tax return a decision was made not to record a reserve based on an

expectation to litigate or an IRS administrative practice, and (b) the tax position has been taken by the

corporation in a tax return for the current tax year or a prior tax year.

A tax position must be reported regardless of whether the audited financial statement is prepared based

on United States generally accepted accounting principles (GAAP), International Financial Reporting

Standards (IFRS), or other country-specific accounting standards, including a modified version of any of

the above (for example, modified GAAP) that requires a taxpayer to record a reserve for federal income

tax positions.

A tax position is based on the unit of account in the audited financial statements in which the reserve is

recorded. A tax position taken in a tax return means a tax position that would result in an adjustment to a

line item on that tax return if the position is not sustained.

A line item on a tax return may be affected by

multiple units of account, in which case each unit of account must be reported separately on Schedule

UTP.

Instructions For Schedule Utp Draft - Uncertain Tax Positions Statement - 2010