Posted tagged ‘schedule utp’
December 8, 2011
By Phil Karter
As reported earlier this week in the tax press, the recently completed initial filing season for Schedule UTP produced at least one major surprise in the eyes of IRS officials, who had anticipated a much greater number of items listed on the average Schedule UTP than actually materialized. In fact, the IRS’s predictions were off by a wide margin, with the number of disclosed positions of the 1,500 or so Schedule UTPs filed averaging only slightly more than three items per schedule for CIC taxpayers, and less than two items for non-CIC taxpayers. Pre-filing expectations of item disclosures had been many multiples higher, perhaps even reaching as high as 100 or more separately stated positions. Although such predictions may have been wildly optimistic from the IRS’s standpoint, one must now wonder whether the apparent failure of the first filing season to meet the Service’s anticipated disclosure bonanza will hasten efforts to extend the penalty regime to specifically target what are viewed as incomplete or inadequate disclosures on Schedule UTP. (more…)
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Categories: Administrative, Audit, Corporate
Tags: Audit, CIC, disclosure, IRS, IRS Audits, Penalties, Privilege, schedule utp, tax penalties, tax workpapers, Work Product
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December 7, 2011
By Jonathan Prokup
Peter Pappas at the Tax Lawyer’s Blog takes note of a recent report from TIGTA regarding audits of small corporations (those with less than $10 million in assets, according to the IRS). As Mr. Pappas says, language from the report suggests that Treasury may consider the closely held nature of many small businesses to be an indicator of a propensity to structure transactions to avoid taxes.
Many corporations in the United States are considered closely held because they are owned by one shareholder or a closely knit group of shareholders. As such, these shareholders typically have a significant amount of control over managing and directing the day-to-day operations of the corporation. This, in turn, provides opportunities to improperly structure transactions that reduce the amount of income taxes owed by the small corporation or its shareholders.
In effect, the report identifies a principle that the government has long applied to large companies as well: transactions among related parties that do not involve third parties deserve particularly close scrutiny. This principal is applied to taxpayers of all sizes in a variety of contexts, including transfer pricing and the economic substance doctrine. More relevant to Mr. Pappas’ primary point, though, this statement tends to confirm a trend within the Treasury Department towards targeting small and medium-sized businesses and their owners for examination. (more…)
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Categories: Administrative, Corporate, Individual
Tags: Audit, closely held business, Global High Wealth Industry Group, IRS, schedule utp, tax gap
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November 23, 2010
By Phil Karter and Jonathan Prokup
One of our readers recently emailed us with a question about the application of the new Schedule UTP to deferred tax assets. The question is straightforward enough: must uncertain positions involving deferred tax assets be reported on Schedule UTP and, if so, when must they be reported? The explanation, thanks to confusion created by several examples in the final Schedule UTP instructions, is anything but straightforward. Let’s start with a little background.
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Categories: Administrative, Appeal, Audit, Corporate, Litigation
Tags: 2010-75, Deferred Tax Assets, FIN 48, Financial Reporting, NOL, Reserve, schedule utp
Comments: 1 Comment
September 27, 2010
By Jonathan Prokup
The Internal Revenue Service on Friday released the final version of the much-anticipated Schedule UTP (and accompanying instructions) as well as additional guidance about changes that had been made the schedule. At the same time, the IRS also announced an expansion of the Compliance Assurance Program (CAP) as well as some other minor matters. In the face of much criticism of the draft Schedule UTP and instructions, the IRS made a numbers of significant adjustments; however, several issues remain unresolved.
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Categories: Administrative
Tags: Audit, compliance, disclosure, FIN 48, instructions, schedule utp, uncertain tax position, Work Product, workpapers
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September 21, 2010
Judging by the feedback we receive from our readers, the topic of workpapers and work product continues to be an area of major concern for many tax practitioners. For those who are interested in learning more about the topic, particularly in light of the D.C. Circuit’s recent decision in United States v. Deloitte LLP, I will be speaking on a webinar panel, U.S. v. Deloitte: Expansion of Work Product Doctrine in Tax Controversies, next Tuesday at 1pm (EDT). For prior TaxBlawg discussion of the Deloitte opinion, see here.
Together with Edward Froelich of Morrison & Foerster and Kevin Spencer of McDermott, Will & Emery, I will be discussing the implications of Deloitte for protecting tax documents, particularly in the context of responding to IRS summons and complying with the proposed Schedule UTP. It should be an interesting presentation, with a discussion of practical tips for navigating this constantly changing area.
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Categories: Uncategorized
Tags: Deloitte, schedule utp, Work Product, workpapers
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September 13, 2010
By Jonathan Prokup and Dustin Covello
Last week, the IRS issued a proposed regulation that would generally require corporations to attach Schedule UTP (Uncertain Tax Position Statement) to their returns. The regulation effectively would give the IRS authority to require that the schedule be filed; but the issuance of the regulation raises an interesting question: is the IRS setting the stage to argue that the requirement to file Schedule UTP should be permitted on the basis of deference to the IRS’s regulatory authority?
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Categories: Administrative
Tags: 6012, Chevron, deference, regulations, schedule utp
Comments: 1 Comment
June 30, 2010
By Jonathan Prokup
Just when the Department of Justice must have thought that it could do no wrong in pursuing the workpapers of taxpayers and their auditors, it ran smack into the formidable blockade that is the Court of Appeals for the District of Columbia Circuit. In United States v. Deloitte LLP et al., No. 09-5171 (D.C. Cir. Jun. 29, 2010), the D.C. Circuit seems to have fired a shot across the bow of both the Department of Justice and the IRS’s brand-new Schedule UTP. (You can find the opinion here.)
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Categories: Administrative, Corporate, Litigation
Tags: appeal, Deloitte, disclosure, IRS, schedule utp, Tax Litigation, waiver, Work Product, workpapers
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