IRS Statement about Uncertain Tax Positions (UTP) Reporting

Updated December 22, 2022: Revised statement with revisions to instructions based on comments received.

Updated October 19, 2022: Added an email for submitting comments by November 18, 2022.

October 11, 2022

On October 11, 2022, the IRS announced draft changes to the Schedule UTP and the UTP Instructions for 2022 Tax Year (processing year 2023). The IRS invited comments from stakeholders on the draft forms. In response, the IRS received several helpful comments on the draft Schedule UTP and instructions. The comments informed several revisions to the instructions, including the following:

• Contrary Authorities in Column (c): For taxpayers who are using a Schedule UTP in lieu of a Form 8275 to disclose a tax position that they have identified as contrary to a rule, column (c) is the applicable column for disclosing that rule. The IRS routinely receives disclosures on Form 8275 citing the "authoritative sources" listed in the draft instructions. As such, the draft instructions for that section included citations for guidance not published in the Internal Revenue Bulletin (IRB). In response to comments, however, that section of the instructions has been revised to list only published IRB guidance and court decisions.
• Columns (i) to (k): The instructions have been revised to clarify that the request in these columns is not for the amount of the unrecognized tax benefit but rather for the amount of the line item on the taxpayer's return that includes the unrecognized tax benefit.

The instructions also make clarifications to the concise description section. The IRS policy of restraint as set forth in Announcement 2010-76 remains in effect. Finally, as noted in the Schedule UTP instructions and the Internal Revenue Manual, the IRS will treat a complete and accurate disclosure of a tax position on the appropriate year's Schedule UTP as if the corporation filed a Form 8275, Disclosure Statement, or Form 8275-R, Regulation Disclosure Statement, regarding the tax position for the accuracy related penalty due to disregard of rules or regulations or a substantial understatement of income tax.