Corporate Tax Filing: Uncertain Tax Positions: Financial Accounting and Tax Reporting Requirements

This course covers the disclosure requirements for uncertain tax positions.  Under ASC 740-1 (formerly FASB interpretation #48 (FIN48)) a corporation must make a determination of the likelihood that one or more of its tax positions will be sustained upon review by the authorities and applies to both temporary and permanent differences.  A tax position taken on a current or previously filed federal tax return may also be subject to disclosure on Schedule UTP which is filed with the Form 1120, US Corporation Tax Return.  Disclosure is required when either the corporation or a related party has recorded a reserve with respect to that tax position for federal income tax in an audited financial statement.  Furthermore, if a reserve for that tax position was not recorded because the corporation expects to litigate its position, disclosure is also required.

This course covers the tax accrual process for an uncertain tax position when preparing the corporation’s financial statements and the requirements to adequately disclose an uncertain tax position on Schedule UTP.  Topics covered include:

• Determining what is an uncertain tax position for financial accounting purposes
  
  • Recognition and measurement issues
  • Required disclosure on financial statements
• Determining which uncertain tax positions must be disclosed on the tax return
  
  • Disclosure requirements of Schedule UTP
  • Overlap between Schedule M-3 and Schedule UTP disclosure requirements

    Note:  The tax accrual was covered in the first basic course, and Schedule M-3 reporting requirements were covered in the three intermediate courses.   

A comprehensive example of Schedule UTP and M-3 disclosures is provided to reinforce your knowledge of identifying and reporting uncertain tax positions for both financial accounting and tax accounting purposes.