Comments on Rev. Proc. 89-11: disclosure of return positions.

Comments on Rev. Proc. 89-11: disclosure of Return Positions

November 21, 1989

This letter is in response to your recent request for Tax Executives Institute's comments on the impending revision of Rev. Proc 89-11, 1989-6 I.R.B. 32 (Feb. 6, 1989). That revenue procedure, which is updated annually, and identifies the circumstances under which the disclosure on a taxpayer's return of an item or a position taken will be deemed "adequate" for purposes of section 6661 or the Internal Revenue Code.

The Institute continues to believe that items properly reported on government-prescribed forms or schedules should be deemed to be adquately disclosed for purposes of section 6661(b)(2)(B)(ii). (If the current forms do not render sufficient information, they should be revised.) In the absence of such a rule, however, we believe that certain modifications to Rev. Proc. 89-11 are warranted.

In Rev. Proc. 89-11, the IRS deleted the references to the Form 5471 and Form 5471, Schedule M, which had been contained in the 1988 version of the section 6661 disclosure procedure. See Rev. Proc. 89-11, [subsection] 2.04 and 2.05; Rev. Proc. 88-37, 1988-2 C.B. 560, [section] 4(e)(2). The deletion of the Schedule M may well have been inadvertent, since the Section 482 White Paper (which was issued within a few months of the...