Daily Tax Update - June 23, 2005

TREASURY AND IRS ISSUE DRAFT VERSION OF 2005 SCHEDULE M-3 AND INSTRUCTIONS FOR CORPORATE TAX RETURNS:
Today, the Treasury Department and Internal Revenue Service released a draft version of the 2005 Schedule M-3, Net Income (Loss) Reconciliation for  Corporations with Total Assets of $10 Million or More, and related instructions for use by certain corporate taxpayers filing Form 1120, U.S. Corporation Income Tax Return.  The 2005 Form 1120 Schedule M-3 is for use with Form 1120 returns filed for calendar year 2005,  fiscal years that  begin  in 2005 and end in 2006, and  tax years of less than twelve months that begin and end in 2006.

  • The draft 2005 Schedule M-3 includes two new line items - one line for the new domestic production activities deduction and another line for interest expense.  The draft 2005 Schedule M-3 also reflects other minor modifications to the 2004 Schedule M-3 that are described in the "What's New" section of the draft 2005 Schedule M-3 instructions.  The Treasury Department and IRS do not anticipate any further changes to the draft 2005 Schedule M-3 and instructions and expect that the final version of the form and instructions will be available this fall and posted here
  • Additional information can be accessed here and here.

TAX REFORM PANEL LIKELY TO HOLD MEETING IN JULY:
According to Jeffrey Kupfer, Executive Director of the President’s Advisory Panel on Federal Tax Reform, the commission will likely meet publicly in July to review the information the commission’s subgroups have been examining since May.

  • Kupfer said, "There is a pretty good chance we will have a meeting in July to publicly review the work" the subgroups have been doing. Kupfer also said that the two-month extension would allow for a more thorough report. Kuper said, "At the end of the day I think we'll have a better product as a result."

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