AICPA Recommends Ways IRS Could Reduce Schedule M-3 Burdens

In a minute to Heather Maloy, commissioner of a IRS’ Large Business and International Division, Patricia Thompson, chair of a AICPA’s Tax Executive Committee, speedy a IRS to combine with outmost stakeholders in reworking Schedule M-3, Net Income (Loss) Reconciliation, and suggested some revisions to revoke taxpayers’ correspondence burdens.

The IRS introduced Schedule M-3 as an hearing apparatus for corporations, to boost clarity and order a stating of book-tax differences. In her letter, Thompson asked a IRS to explain how it is now regulating a information it gets from Schedule M-3 filings. She remarkable that, in a knowledge of AICPA members, there has been small change in a approach a IRS examines taxpayers outward a Compliance Assurance Program, “with examiners still requesting finish book to taxation fact for all ubiquitous bill accounts.”

Thompson also remarkable that taxpayers are spending poignant amounts of time scrupulously stating equipment on Schedule M-3, including time spent mapping ubiquitous bill income/expense accounts to mainstay (a), reconciling particular line equipment to news taxable income totals in mainstay (d), and providing ancillary information for cost of products sole on Form 8916-A, Supplemental Attachment to Schedule M-3.

As a outcome of these and other increasing taxpayer burdens, a AICPA recommends in partial a following changes:

  • Eliminating compulsory execution of columns (a) and (d) of Parts II and III of Schedule M-3;
  • Eliminating Form 8916-A;
  • Eliminating and reworking certain lines on Parts II and III of Schedule M-3, or otherwise replacing them with an stretched Schedule M-1 that would be used by all business taxpayers; and,
  • Expanding a use of Schedule B (Form 1120) and Schedule C (Form 1065) for risk comment in lieu of adding new lines and requesting additional ancillary fact on Schedule M-3.

About Emil Estafanous, CPA
Certified Public Accountant (CPA) Tax Professional committed in representing taxpayers and resolving their tax problems.

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