Schedule UTP: New Changes And Old Concerns

On October 11, 2022, the IRS announced draft changes to Schedule UTP, Uncertain Tax Position Statement.¹ These are the first material changes to Schedule UTP since the IRS first published the schedule in 2010. An IRS official claimed the changes are necessary because "many taxpayer descriptions of uncertain tax positions are insufficient and unhelpful, with some providing just two words, such as 'accrued bonus.'"² But the changes may conflict with the IRS's internal policy of restraint on tax accrual workpapers and renew old concerns about waiver of privileges. This article summarizes the important takeaways from the changes.

Background

Schedule UTP is used by corporations to report uncertain tax positions on their annual tax returns.³An uncertain tax position includes any position for which reserves have been established and documented pursuant to FIN 48 (codified at ASC 740-10), as well as those positions for which no reserve was established, but where the