SECTION 1. PURPOSE

This revenue procedure updates Rev. Proc. 2008–14, 2008–1 C.B. 435, and identifies circumstances under which the disclosure on a taxpayer’s income tax return with respect to an item or a position is adequate for the purpose of reducing the understatement of income tax under section 6662(d) of the Internal Revenue Code (relating to the substantial understatement aspect of the accuracy-related penalty), and for the purpose of avoiding the tax return preparer penalty under section 6694(a) (relating to understatements due to unreasonable positions) with respect to income tax returns. This revenue procedure does not apply with respect to any other penalty provisions (including the disregard provisions of the section 6662(b)(1) accuracy-related penalty, which are subject to an exception for adequate disclosure). Also, under this revenue procedure, no disclosure on a return other than an income tax return will be adequate with respect to a tax return preparer penalty under section 6694(a).

This revenue procedure applies to any income tax return filed on 2009 tax forms for a taxable year beginning in 2009, and to any income tax return filed on 2009 tax forms in 2010 for short taxable years beginning in 2010.