In reacting to the latest tax shelter abuses, the IRS has decided to seek more transparency in corporate tax reporting. One of the first steps to ratchet up the data gathered from companies, especially on book-tax differences, is the creation of Schedule M-3, New Income (Loss) Reconciliation for Corporations with Total Assets of $10 Million or More. For example, Schedule M-1 separately identifies eight differences between book and taxable income. Parts II and III of Schedule M-3 require companies to disclose and reconcile the amounts of 67 specific components of book or taxable income. In TAXES Magazine, authors John H. Ledbetter and Lucinda L. Van Alst walk practitioners through the preparation of Schedule M-3 with specific, detailed examples.
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This story is from the CCH’s monthly Focus on Tax newsletter, which provides advise and guidance on federal and state tax issues for tax and accounting professionals.
Read this article from CCH’s Journal of Taxation of Financial Products.