Columbia Journal of Tax Law's Tax Matters: Schedule UTP

The Columbia Journal of Tax Law has published the third edition of its Tax Matters feature, with multiple short pieces responding to a specific cutting-edge tax law issue.  This issue's prompt is by Michael J. Graetz (Columbia):

IRS Announcement 2010-75 created a reporting requirement that certain corporations with audited financial statements file a Schedule UTP (Uncertain Tax Position) Form beginning with the 2010 tax year. In the Schedule UTP, a corporation must disclose all uncertain US tax positions taken in its tax return for which the corporation has recorded a tax reserve for financial accounting purposes. In addition, the corporation must rank the magnitude of the reserves reported on the form. A corporation must also disclose uncertain tax positions for which no reserve is recorded for financial reporting purposes if the corporation believes that it is more likely than not that it would need to litigate the position to sustain the benefit.

Furthermore, the First Circuit ruled in United States v. Textron (2009) that the work product doctrine does not protect tax accrual workpapers created for financial filings and auditing purposes from discovery requests by the IRS.

What effects, if any, have the UTP requirement and Textron decision had on how tax directors and clients evaluate tax planning and documentation of transactions? Although the IRS has announced a policy of restraint for both, how much have the UTP requirement and Textron decision expanded the IRS’s ability to obtain tax reserve information? Do you believe that other jurisdictions will attempt to implement similar reporting regimes, and if so, how would this development affect the management of global tax controversies?

• Ken Kuykendall (PricewaterhouseCoopers), Reflections on the True Impact of the IRS’ Schedule UTP Reporting Requirements, 3 Colum. J. Tax L. Tax Matters 10 (2012)
• Neil Traubenberg (Former Vice President of Tax, Sun Microsystems), Evolving Tax Risk Analysis and Disclosure, 3 Colum. J. Tax L. Tax Matters 14 (2012)
• Yuni Yan (Wachtell, Lipton, Rosen & Katz, New York), Minimizing Potential Privilege Implications Caused by the UTP Schedule, 3 Colum. J. Tax L. Tax Matters 17 (2012)

Previous issues of Tax Matters

• Marvin A. Chirelstein (Columbia), Codification of the Economic Substance Doctrine, 2 Colum. J. Tax L. Tax Matters 1-11 (2011)
• Paul L. Caron (Cincinnati), Tax Strategy Patents, 3 Colum. J. Tax L. Tax Matters 1-9 (2012)