Form 1120 (Schedule UTP)

What Is Schedule UTP Form 1120

The IRS schedule UTP (uncertain tax position) is an integral part of form 1120, which corporations utilize. The schedule UTP form 1120 provides information about uncertain tax positions the corporation has or expects to take on its income tax return. This includes positions relating to the potential under-reporting of income, overstatement of deductions, or indecision about the successful treatment of an item of income, gain, loss, deduction, or credit upon IRS examination.

For example, corporation A might have taken a tax deduction for a significant business expense. However, there is some uncertainty about whether the IRS would agree with the corporation's characterization and taxing treatment of this deduction. Hence, corporation A must disclose this uncertain tax position on schedule UTP with its form 1120 filing.

How To Fill Out Schedule UTP Form 1120 Instruction

Step 1: Entity Information

Start by entering the name of your entity and the Employer Identification Number (EIN) as shown on page 1 of your tax return.

Step 2: Part I - Uncertain Tax Positions for the Current Tax Year

Assign a sequential number to each UTP, starting with 1. List the relevant Internal Revenue Code (IRC) sections and subsections associated with the UTP. Include relevant Revenue Rulings (RR), Revenue Procedures (RP), etc. Indicate if the UTP is permanent or temporary and cite the relevant regulation sections and subsections. Provide information on any pass-through entity involved, including its EIN. Rank the UTPs in order of significance and list the corresponding form, schedule, and line number. Enter the maximum amount of tax benefit for each UTP.

Additional Tips: Ensure each UTP has a unique number across all parts. Be thorough in your descriptions and references. Maintain consistency in numbering and references across all parts of the form. Keep detailed records and documents to support your entries on the form. Double-check all entries and refer to the IRS instructions for specific guidance on each form section.

How To File Form 1120 Schedule UTP

After completing the form, submit it to the IRS. The process of filing form 1120 schedule UTP is packaged with the filing of form 1120 itself. Corporations often file these forms electronically, which is typically faster and more secure. When filing, attach your completed Schedule UTP to your Form 1120.

Deadline For IRS Form 1120 Schedule UTP

The scheduled UTP follows the same deadline as the corporation’s income tax return (form 1120). It is typically due on the 15th day of the fourth month following the end of the corporation's tax year. For corporations operating on a calendar year, this deadline often falls on April 15th. However, if the deadline lands on a weekend or a public holiday, the due date is pushed forward to the next business day. Corporations can apply for a six-month extension, which moves the deadline to October 15th for calendar-year taxpayers. The IRS form 1120 schedule UTP is an essential tool the IRS utilizes to promote transparency and tax compliance among corporations.