Daily Tax Update - April 26, 2005

IRS AND TAX GROUPS PARTNER TO ANSWER SCHEDULE M-3 QUESTIONS:
Today, the IRS announced that it has formed a partnership with several tax and accounting-related organizations to help respond to frequently asked questions on the Schedule M-3 form. Schedule M-3, "Net Income (Loss) Reconciliation for Corporations with Total Assets of $10 Million or More" is filed by affected corporations to reconcile financial accounting income to taxable income. The IRS estimates that approximately 50,000 large and mid-size corporations are now required to use the schedule. Corporate taxpayers that are required to file the new Schedule M-3 with their Form 1120 can submit questions on an anonymous basis to the partnership organizations, which will then forward them to the IRS for response. Organizations participating include the American Bar Association, the American Institute of Certified Public Accountants, the American Taxation Association, and the Tax Executives Institute.

  • Deborah   Nolan , Commissioner of the IRS Large and Midsize Business Division, said, "Schedule M-3 is a very significant change for taxpayers and the IRS. It will provide important tax accounting information at time of filing that previously required extensive time to develop during a tax examination. We sought corporate taxpayer input in the scope and design of the Schedule M-3 and we’re continuing that collaboration to ensure understanding of the requirements of the new form."
  • Additional information can be accessed here.     

TAX BILL INTRODUCED APRIL 25:

  • S. 897 sponsored by Sen. Orrin Hatch (R-UT) would clarify the calculation of the reserve allowance for medical benefits of plans sponsored by bona fide associations.

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE:
As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

STEPTOE & JOHNSON LLP - TAX PRACTICE
Steptoe & Johnson LLP has one of the largest and most diverse law firm tax practices in the country. The practice covers the entire spectrum of federal taxation, including representation of businesses before the Congress, Treasury and the national office of the IRS; transactional planning for domestic and multinational corporations; complex audit and controversy work for corporations and other business interests contesting IRS adjustments; litigation before the Tax Court, Court of Federal Claims, district courts, courts of appeals and the Supreme Court. The firm's tax practice also encompasses all aspects of employee benefits (ERISA), executive compensation, tax-exempt organizations and charitable giving.  Steptoe has an extensive state and local tax practice, representing an array of business clients on complex sales and use tax, corporate income tax and property tax matters, both advising those clients and handling audits, administrative appeals, and litigation for them.  Read  more information on Steptoe's tax practice