Instructions For Schedule Utp Draft - Uncertain Tax Positions Statement

the valuation tax positions and the transfer pricing tax positions. See Specific Instructions to Parts I and

II, Column F.

Coordination with Other Reporting Requirements

A complete and accurate disclosure of a tax position on the appropriate year’s Schedule UTP will be

treated as if the corporation filed a Form 8275, Disclosure Statement, or Form 8275-R, Regulation

Disclosure Statement, regarding the tax position. A separate Form 8275 or Form 8275-R need not be

filed to avoid penalties with respect to that tax position.

Other disclosures and penalties. [RESERVED]

Comprehensive Examples

All examples assume the corporation is a calendar year taxpayer

Example 9 (temporary difference). A corporation incurs an expenditure in 2010 and claims the entire

amount as a deduction on its 2010 return. On September 30, 2010, the corporation determines it is

uncertain whether the expenditure should instead be amortized over 5 years and records a reserve with

respect to the position taken in 2010. The corporation did not record a reserve for any of the positions

taken in tax years 2011 through 2014. The corporation has taken a tax position in each of the 5 tax years

because in each year’s tax return there would be an adjustment to a line item on that return if the position

taken in that year is not sustained. The tax position taken in the 2010 tax year must be reported on Part I

of Schedule UTP filed with the 2010 tax return because a reserve was recorded with respect to the tax

position more than 60 days before filing that return. None of the 2011 to 2014 tax positions must be

reported on Schedule UTP because the corporation did not record a reserve with respect to any of those

tax positions.

Example 10 (permanent differences). A corporation incurs an expenditure in 2010 and takes the position

that the expenditure may be amortized over 5 years beginning in its 2010 tax return. The corporation

determines it is uncertain whether any deduction or amortization of this expenditure is allowable. On

September 30 of each year beginning in 2010, the corporation records a reserve with respect to the

amortization deduction claimed in each tax year. The corporation has taken a tax position in each of the

5 tax years because in each year’s tax return there would be an adjustment to a line item on that return if

the position taken in that year is not sustained. Because the corporation recorded a reserve for the 2010

tax position more than 60 days before filing the 2010 tax return, the corporation must report the 2010 tax

position on Part I of Schedule UTP for the 2010 tax year. In addition, because the corporation recorded a

reserve more than 60 days before filing its tax returns for tax years 2011 through 2014, the tax position

taken in each of those tax years must be reported on Part I of the Schedule UTP filed with the tax return

for the respective tax year in which the tax position was taken.

Example 11 (transition rule). The facts are the same as in Example 10, except that the corporation

incurred the expenditure and recorded the reserve in 2009. The corporation has taken a tax position in

each of the 5 tax years (2009 through 2013) because in each year’s tax return there would be an

adjustment to a line item on that return if the position taken in that year is not sustained. However, the

corporation should not report the tax position taken in the 2009 tax year because it was taken in a tax

year beginning before December 15, 2009. Because the corporation recorded a reserve more than 60

days before filing its tax returns for tax years 2010 through 2013, the tax position taken in each of those

tax years must be reported on Part I of the Schedule UTP filed with the tax return for the respective tax

year in which the position was taken.

Instructions For Schedule Utp Draft - Uncertain Tax Positions Statement - 2010 Page 6