TPD: Tax Position Disclosure (2024)
Minnesota · Minnesota DOR · Used for tax years 2024
Minnesota Form TPD, Tax Position Disclosure, discloses tax items or positions that are not otherwise adequately disclosed on a Minnesota tax return. It identifies the items, their amounts and locations on the return, and the relevant facts and legal issues affecting their tax tre
Who files this form
Form TPD is used by taxpayers and tax return preparers to disclose tax items or positions that are not otherwise adequately disclosed on a Minnesota tax return.
The instructions say it is filed by taxpayers responsible for taxes under Chapter 289A, except the general sales and use tax under Chapter 297A. It can apply to:
- Income tax
- Corporate franchise tax
- Estate tax
- Occupation tax
- Net proceeds tax on mining
- Unrelated business income tax
- Sales tax on motor vehicles
What you'll need
Have the following information ready:
- Your taxpayer name, identifying number, address, email address, and phone number.
- The name and complete description of each item or group of items you are disclosing.
- The form or schedule, line number, and amount for each item.
- The Minnesota law, statute, rule, Revenue Notice, or other Minnesota position, if your position is contrary to it.
- Relevant facts explaining the item's tax treatment and the controversy or potential controversy.
- The pass-through entity's FEIN or Minnesota ID, if you are an owner disclosing an item from that entity.
If you need more space, use continuation sheets and put your name and identifying number on each sheet.
How to file
File Form TPD with the Minnesota tax return on which you take the tax position for the first time. Keep a copy for your records.
- Enter your taxpayer and contact information.
- Complete Part I with the items being disclosed, their descriptions, their locations on the return, and their amounts. Identify any Minnesota position your treatment contradicts.
- Complete Part II with the relevant facts, including the item's identity, amount, and the nature of the controversy or potential controversy.
- Complete the authorized signature, title, date, and direct phone fields.
File a separate Form TPD for items reported by each pass-through entity. If you are an owner, include that entity's FEIN or Minnesota ID in Part II.
The supplied text does not give a mailing address or e-file procedure.
Common mistakes
- Leaving Parts I or II incomplete. The instructions remind you to supply all required information.
- Leaving identifying information off continuation sheets. Put your name and identifying number on each sheet.
- Combining items from different pass-through entities on one form. File a separate Form TPD for each entity and identify the items as coming from a pass-through entity.
- Omitting pass-through entity details in Part II. Owners must include the entity's FEIN or Minnesota ID. Contact the entity if you are missing necessary information.
- Treating a recurring item like a carryover. Recurring items, such as depreciation expense, require Form TPD for each tax year in which they occur.
Questions people ask
Does filing Form TPD automatically prevent an understatement penalty?
No. Filing may reduce the penalty if the return position has a reasonable basis. The instructions say adequate disclosure and a reasonable basis generally allow you to avoid the penalty, but they also describe situations where reductions do not apply.
What does “reasonable basis” mean?
It is a relatively high tax-reporting standard. A position that is merely arguable does not meet it.
Do I need to disclose a carryover every year?
No. Disclose the carryover item for the tax year in which it originated. You do not have to file another Form TPD for that item in the years when the carryover is taken into account.
Can I describe similar items as a group?
Yes. If you claim the same tax treatment for similar items in the same tax year, describe the group rather than describing each item separately.
How much is the understatement penalty?
Generally, it is 20% of the underpayment attributable to the understatement.