Welcome to TaxBlawg, a blog resource from Chamberlain Hrdlicka for news and analysis of current legal issues facing tax practitioners. Although blawg.com identifies nearly 1,400 active “blawgs,” including 20+ blawgs related to taxation and estate planning, the needs of tax professionals have received surprisingly little attention.
The Wall Street Journal's Tax Blog gives “tips and advice for filers,” and Paul Caron’s legendary TaxProf Blog is an excellent clearinghouse for academic and policy-oriented news. Yet, tax practitioners still lack a dedicated resource to call their own. For those intrepid souls, we offer TaxBlawg, a forum of tax talk for tax pros.
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Last week, the IRS issued a proposed regulation that would generally require corporations to attach Schedule UTP (Uncertain Tax Position Statement) to their returns. The regulation effectively would give the IRS authority to require that the schedule be filed; but the issuance of the regulation raises an interesting question: is the IRS setting the stage to argue that the requirement to file Schedule UTP should be permitted on the basis of deference to the IRS’s regulatory authority?
As noted in a Tax Notes article last week (Jeremiah Coder, IRS Issues Proposed Regs to Implement UTP Reporting, Blunt Criticism, 2010 TNT 174-3 (Sep7. 9, 2010)), it is unusual for the IRS to issue a regulation supporting the use of a new schedule. Why, then, would the IRS have chosen to issue regulations in this instance?
The proposed regulation itself offers one possible answer. Just before the text of the new regulation, the document states,
The authority citation for part 1 is amended by adding an entry in numerical order to read as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.6012-2 is also issued under the authority of 26 U.S.C. 6011 and 6012.
In light of the ongoing battle over the scope of the work-product doctrine, the IRS may be contemplating that there is a question about whether the doctrine would preclude the disclosure of some or all of the information that will be sought by Schedule UTP. Is the IRS hoping to argue that, because the Schedule UTP is supported by a legislative regulation, courts should defer under so-called "Chevron deference" to the requirement that taxpayers file the Schedule? For the time being, we leave you with the question and will explore this and other questions surrounding the implementation of Schedule UTP in the coming weeks.