What is an uncertain tax position? - John R. Dundon II, Enrolled Agent
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What is an uncertain tax position?

What is an uncertain tax position?

As set forth in the current drafts, an uncertain tax position includes a federal income tax position for which the taxpayer has recorded a reserve in an audited financial statement. It also includes a position where no reserve is reported either due to an asserted IRS administrative practice or because of an expectation to litigate the issue.

A tax position must be reported on a return only if the decision to record the reserve was made at least 60 days before filing the tax return. Decisions within 60 days are to be reported in the following year. Reporting requirements with respect to 2010 would not be required to include anything from the prior year.

The taxpayer must include as an uncertain tax position a position on which a related party has reported a reserve. A box is provided on the form to check if the taxpayer is unable to obtain the required information from the related party. A consolidated group would report uncertain tax positions for the whole group without any requirement to identify which member of the group reported the reserve

John R. Dundon, EA – 720-234-1177