June 1, 2010
The Honorable Douglas H. Shulman Commissioner Internal Revenue Service 1111 Constitution Avenue, N.W. 3000 IR Washington, D.C. 20224
Comments on Announcements 2010-9, 2010-17, and 2010-30 with Regard to Uncertain Tax Positions
Dear Commissioner Shulman:
The AICPA appreciates the opportunity to provide the attached comments on Announcements 2010-9, 2010-17, and 2010-30 with regard to uncertain tax positions. In general, the IRS has proposed that certain business taxpayers (with total assets in excess of $10 million) will be required to file the new Schedule UTP, Uncertain Tax Position Statement, if they have one or
more uncertain tax instructions, released Forms 1120, 1120-F,
positions (UTPs). The draft Schedule UTP and accompanying draft under Announcement 2010-30, indicate that initially only taxpayers filing 1120-L, or 1120-PC will be required to disclose uncertain tax positions.
As the national, professional association of certified public accountants comprised of 360,000 members, the AICPA is uniquely positioned to comment on the IRS proposal concerning increased reporting of UTPs. Our members advise clients on federal, state, and international tax matters and prepare income and other tax returns for millions of Americans and businesses. They provide services to individuals, not-for-profit organizations, small and medium-sized businesses, as well as America’s largest businesses. It is from this broad perspective that we offer our comments on the IRS proposal regarding UTPs.
The AICPA understands and supports the IRS objective of increasing the certainty, consistency and efficiency of the tax compliance process. We believe, however, that the procedures as outlined in Announcements 2010-9, 2010-17 and 2010-30 could significantly impede rather than enhance the goals articulated by the IRS. Our most significant concerns with the IRS proposal are that the proposed UTP disclosure regime:
Potentially undercuts the integrity of the financial statement process;
Imposes increased burden and cost on taxpayers which will be substantially disproportionate to any actual benefit to the IRS;
Creates new tension among and between taxpayers, tax advisors, and the IRS, and alters the current self-assessment system;
Produces complexity and results in distortions that will impede the stated IRS goals;