In April, we published “What Offshore Businesses & Tax Practitioners Need to Know About IRS Draft Schedule UTP,” a post on the Proposed Schedule UTP (Uncertain Tax Positions), which is a schedule certain foreign businesses would be required to file with their Form 1120 to disclose uncertain tax positions when the business assets are at least $10 million and the business issues or is included in audited financial statements. On September 24, 2010, the IRS finalized this schedule and also released Announcement 2010-75 explaining the form. The final schedule and instructions make some changes to the draft from April. Here is an overview of the major changes:
- There is a five year phase-in of the reporting requirement for the UTP if the Corporation’s assets are under $100 million.
- There is no reporting of a maximum tax adjustment (the draft required this).
- There is no reporting of the rationale and nature of uncertainty in the concise description of the position (also required in draft form).
- There is no reporting of administrative practice tax positions.
Please consult an attorney for assistance in preparing this new form.