A memorandum issued August 31, 2011 by Heather Maloy, Commissioner of the IRS’s Large Business & International Division to examination teams assigned to the Compliance Assurance Process (CAP) Program, addresses examiners’ use of Schedule UTP, Uncertain Tax Position Statement. The guidance is signifi cant in that it provides the fi rst specifi c indication of how the IRS will use the Schedule UTP during the course of an examination.
The memorandum demonstrates that the IRS will be engaging in a broad review of the forms to identify systemic issues that might then be addressed through guidance or changes to the IRS’s administrative procedures. The IRS contemplates that the candor and transparency essential to the CAP Program generally should present relatively few cases in which the taxpayer will not have already disclosed a position reported on Schedule UTP or that the schedule will be used to raise new issues. The directed approaches generally envision the examining agent consulting with the taxpayer to confi rm the taxpayer’s intent, and elevating the issue only if it was not disclosed, or if it is a new issue or involves new facts.