Rev. Proc. 2015-16: Updated “adequate disclosure” guidance

Updated “adequate disclosure” guidance

Internal Revenue Bulletin 2015-7 (dated February 17, 2015) includes Rev. Proc. 2015-16—guidance concerning the circumstances when disclosure on a tax return of an item or position is determined to be adequate to reduce the penalty under section 6662(d) relating to a substantial understatement for purposes of the accuracy-related penalty.

Related content

Rev. Proc. 2015-16 also applies for purposes of avoiding the return preparer penalty under section 6694(a).

Read text of Rev. Proc. 2015-16 included in IRB 2015-7 [PDF 187 KB]

Adequate disclosure

Rev. Proc. 2015-16 provides that if disclosure of an item or position is not addressed in the revenue procedure, disclosure is adequate only if made on a properly completed Form 8275, Disclosure Statement, Form 8275-R, Regulation Disclosure Statement, or on a completed Schedule UTP, Uncertain Tax Position Statement, as appropriate, attached to the return or to a qualified amended return within the meaning of Reg. section 1.6664-2(c)(3).

For these purposes, a qualified amended return is an amended return or a timely request for an administrative adjustment under section 6227, filed after the due date of the return for the tax period (determined without regard to extension) and generally before contact by the IRS regarding an examination.

No substantive changes

Rev. Proc. 2015-16 updates Rev. Proc. 2014-15, but reports: “No substantive changes have been made.”

A non-exclusive list of examples of other penalty provisions to which Rev. Proc. 2015-16 does not apply were reinserted into this year’s revenue procedure, following their deletion from Rev. Proc. 2014-15, intended to “increase clarity.”

Rev. Proc. 2015-16 applies for any income tax return filed on 2014 tax forms for a tax year beginning in 2014, and filed in 2015 for short tax years beginning in 2015.

© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Request for proposal

 

Submit

KPMG's new digital platform

KPMG International has created a state of the art digital platform that enhances your experience, optimized to discover new and related content.