Daily Tax Update - December 13, 2005

IRS RELEASES SCHEDULE M-3 FOR INSURANCE AND S CORPORATIONS:
Today, the IRS released draft Schedules M-3 and instructions for corporations that file Forms 1120PC, 1120L and 1120S.  When finalized, these Schedules M-3 will be used by property and casualty insurance corporations, life insurance corporations, and S corporations that have total assets of $10 million or more, beginning with tax years ending on or after December 31, 2006.  The IRS is seeking comments regarding these new draft Schedules M-3.  Comments should be submitted by February 10, 2006.

  • Deborah Nolan, IRS Large and Mid-Size Business Division Commissioner, said, "The increased disclosure provided by Schedule M-3 enables IRS to more readily distinguish returns with potentially higher compliance risk from those with lower compliance risk.  The ability to select or de-select returns for examination more quickly and with more visibility to potential compliance risk will lead to reduced examination cycle time and increased currency.  Ultimately that translates to reduced taxpayer burden and improved tax compliance."
  • Additional information can be accessed here.   

SENATE MAJORITY LEADER DOUBTFUL TAX CONFERENCE CAN BE COMPLETED THIS YEAR:
Senate Majority Leader Bill Frist (R-TN) said yesterday that although he hoped that the tax conferees could meet before adjournment, he was doubtful that the tax conference could be completed this year. Frist said, "I hope that . . . both the House and the Senate will go to conference and possibly get it done before we go, but in all likelihood it will be soon after we get back in late January or February."

  • Today, Acting House Majority Leader Roy Blunt (R-MO) commented on the outlook for the tax reconciliation conference. Blunt said, "Whatever we can get done this year, we should try to get it done in the next few days. Whatever we don't get done now will still be there in late January." Blunt added that he expects that the House will be able to conclude its business "by the end of the week or at least by the end of the weekend."
  • Today, Senate Majority Leader Bill Frist (R-TN) commented on the AMT relief bill. Frist said, "In all likelihood, we will not be able to finish that before we go out." Frist was more optimistic on the outlook for hurricane relief legislation. Frist said, "Everything's under negotiation. We will not leave here without a substantive Katrina tax package and a substantive relief package."

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