IRS seeks audit targets, strategies through Schedule M-3

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.

AUTHOR

Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax and Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

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