Schedule UTP: Views of a Former Tax Adviser and Administrator
J. Richard (Dick) Harvey
Villanova University School of Law and Graduate Tax Program
September 20, 2010
Tax Notes, p. 1259, September 20, 2010
Villanova Law/Public Policy Research Paper No. 2010-16
Since its announcement on January 26, 2010, Schedule UTP has been the subject of much discussion in corporate tax circles. If adopted, Schedule UTP will require corporations to disclose certain tax positions on their federal tax return. This article discusses (i) why Schedule UTP is necessary and reasonable; (ii) whether some taxpayers will try to avoid disclosure, and if so, how; and (iii) whether the IRS proposal can resolve the long-running dispute with taxpayers surrounding tax accrual workpapers (TAWs).
The author concludes the IRS (i) needs to minimize opportunities for corporations to avoid disclosure on Schedule UTP, and (ii) should offer a Grand Compromise to solve the TAW issue. In a Grand Compromise, the IRS would explicitly agree to forgo pursuit of a corporation’s tax reserves and tax opinions if the corporation’s tax issues are adequately disclosed on Schedule UTP. However, if the corporation is the subject of a criminal tax investigation, or does not adequately disclose issues on Schedule UTP, the IRS would be free to pursue specific tax reserve information and tax opinions. The author believes this is a fair and reasonable compromise to an admittedly difficult issue and thus should benefit both corporations and the IRS.
Number of Pages in PDF File: 5
Keywords: Schedule UTP, Tax Gap, Tax Accrual Workpapers, and Work-Product Doctrine
Date posted: September 20, 2010
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