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One alternative is to collect information about uncertain tax positions on Schedule M-3. In this context, the taxpayer could identify information reported on Schedule M-3 that corresponds to an uncertain tax position, and the Schedule M-3 could be expanded to collect other requested information. Our suggestion about an expanded Schedule M-3 is conceptually similar to the premise posed by this Question 1 of Announcement 2010-17. Our response to Question 3 under Announcement 2010-9 suggests that taxpayers are already providing information that should be factored into the audit selection criteria (i.e., reportable transactions, substantial understatement and book tax differences detail); and thus, consideration should be given to aligning this information into one integrated request, again dovetailing with the premise of Question 1 of Announcement 2010-17.

For the reasons detailed above, we recommend that as a broad principle, pass-through entities and tax-exempt entities should not be subject to any uncertain tax position disclosure regime as such entities are generally not subject to federal income taxation. In this context, we believe the associated compliance burdens on these entities would outweigh the relative benefits of such potential disclosure.

This question is covered by our response to question 4 of Announcement 2010-9, as provided above.

We appreciate the opportunity to comment on the proposed new disclosure regime. As reflected in our comments above, we believe the proposal is misguided in several respects. We clearly support the overarching goals of certainty, consistency and efficiency, but believe this proposed

disclosure process has the very distinct potential of injecting a and uncertainty which will outweigh the projected benefits.

quotient of

burden,

complexity

Taxpayers

already

confront a

daunting challenge in the complexity of the tax code and the reporting and return preparation responsibilities. These proposed will fall heavily on a universe of taxpayers already challenged to demands of both the financial statement and tax return processes.

regulations that define their new disclosure requirements timely meet the far-reaching Any additional burden ought

to come only after the most respectfully encourage the IRS

careful analysis of to withdraw the UTP

benefits proposal

and burdens. To that end, in order to focus its attention

we and

resources on the disclosed information recast its proposal to affect fewer

it already possesses. At the very least, the Service should taxpayers while fundamentally re-thinking the most

burdensome and

onerous aspects

adjustment and

the requirement

of to

the current proposal, including the concept disclose positions the proposal identifies

of maximum tax as uncertainties

16

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