The Internal Revenue Service has released updated draft instructions for the new Schedule M-3, filed by large and midsized corporations, and which should be rolled out for the 2006 tax year.

The new schedule requires much more detail than the present Schedule M-1, which it will replace for large corporations. The agency hopes that the change will result in greater transparency in regard to differences between taxable income and financial accounting income -- the difference to users is that taxpayers will be required to provide far more information that the government can use to determine in whether or not to pursue an audit.

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