Schedule UTP: An Insider's Summary of the Background, Key Concepts, and Major Issues
DePaul Business and Commercial Law Journal, Spring 2011
40 Pages Posted: 11 Mar 2011 Last revised: 8 Aug 2012
Date Written: March 1, 2011
A former IRS Commissioner has called Schedule UTP "the biggest change in tax administration in the last 50 years". Others have made less flattering comments, but most everyone working in the corporate tax community would admit it has been a big deal.
Based upon the author's perception as a senior IRS official, this article is intended to be a comprehensive discussion of three topics. First, it will summarize the author's perception of what led the IRS to require the filing of Schedule UTP. Second, it will discuss the key concepts, including why certain provisions were adopted (e.g., the much misunderstood "expect to litigate" provision). And finally, there will be a discussion of the major issues, including in some cases the author’s views on such issues.
The article is written for several audiences, including: (i) corporate tax professionals who already have a working knowledge of Schedule UTP and should be most interested in the discussion of major issues and possibly the theory behind the "expect to litigate" provision; (ii) students and academics who should be interested in the entire article; and finally (iii) government officials who should be interested in techniques corporations may use to avoid disclosure, the definition of "reserve", whether Schedule M-3 should be modified, and several other sections.
Keywords: Schedule UTP, transparency, privilege and work product, IFRS, tax reserves, and NOL carryforwards
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