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Centralized Management of LB&I Returns with UTP Schedules

May 11, 2011

FROM: Heather C. Maloy
Commissioner, Large Business & International Division
SUBJECT: Centralized Management of LB&I Returns with UTP Schedules

As you know, LB&I is preparing to integrate Schedule UTP into our examination processes. During this first year of UTP implementation, we must assess and learn all we can from Schedule UTP. This learning is essential to the successful utilization of the information contained on the schedule, both to removing uncertainty from the tax system and to effectively inform return and issue selection in the examination process. We are currently in the process of establishing procedures for:

  • Screening and assessing the value of corporate UTP information.
  • Using UTP data to inform selection and exam processes.
  • Using UTP data to identify areas of legal uncertainty requiring guidance.
  • Providing guidance and delivering training on how UTP information can be used as part of the audit process.
  • Collecting feedback about how the UTP information has been used in planning our workload, the examination risk analysis process, and other examination processes.

In addition, we are going to centrally collect and hold all Tax Year 2010 returns with UTP schedules in our Planning, Analysis, Inventory and Research (PAIR) organization until the above procedures are fully in place. Thomas Brandt, the Director of PAIR, has designated Richard B. Bartlett as the UTP PSP Coordinator with responsibility for coordinating the handling of the UTP inventory.

Until further guidance is issued, and to make certain that our first year implementing the new Schedule UTP is successful, effective immediately we are putting in place the following procedures:

  • All Tax Year 2010 returns with Schedule UTP will be placed in the PAIR designated UTP exam group code for initial screening and review.
  • Official notification will be provided to the organization when returns with UTP schedules will begin to be released for examination activity.
  • LB&I revenue agents and managers are directed not to by-pass the UTP screening process because it is vital for LB&I to have a coordinated and consistent approach in place to how we will be handling and using the UTP schedules.
  • Examination teams should not be requesting or accepting copies of UTP Schedules outside of this centralized process, and should not be questioning taxpayers about UTP.
  • If a return with an attached UTP schedule is inadvertently delivered to the field prior to the official release of UTP inventory, the receiving manager/agent should immediately notify the PAIR UTP PSP coordinator.
  • The newly designated UTP PSP coordinator will be working with Industry PSPs to develop and communicate a more comprehensive set of procedures and processes for how the central holding of UTP inventory will be managed in relation to CIC, CAP, and IC inventory.
  • Further instructions will be provided as to how information on Schedules UTP will be used during examinations once returns with the UTP schedules are assigned to the field.

The implementation of the UTP reporting requirement is a significant milestone for the IRS. It is imperative that we ensure our implementation and use of this information is consistent with the expectations and framework set forth in the initial UTP notices and directives. I appreciate your continued support of our UTP efforts, and will continue to rely on your expertise, advice and assistance to successfully accomplish our UTP goals and objectives.

Additional information will be forthcoming as we move forward in developing and deploying our UTP procedures.

Page Last Reviewed or Updated: 10-Mar-2016