Rev. Proc. 2010-5: IRS Updates Disclosure Procedures

In Rev. Proc. 2010-5, the IRS updated its guidelines identifying circumstances under which the disclosure on a taxpayer's return with respect to an item or position will be deemed adequate for purposes of reducing the Code Sec. 6662(d) accuracy-related penalty for substantial understatement of income tax and avoiding the Code Sec. 6694(a) preparer penalty for understatements attributable to the taking of unrealistic positions. This guidance applies to any return filed on 2009 tax forms for a tax year beginning in 2009, and to any return filed on 2009 tax forms in 2010 for short tax years beginning in 2009. This revenue procedure updates Rev. Proc. 2008-14.

Posted by Patrick Siegfried, Associate Editor, Wealth Strategies Journal.