The Internal Revenue Service released final drafts of Schedules M-3 and Form 8916 for the 2006 tax year, as well as a new Form 8916-A, "Reconciliation of Cost of Goods Sold Reported on Schedule M-3."
Among the changes incorporated after drafts were issued in April:
- The new Form 8916-A provides a uniform and consistent manner for taxpayers to reconcile cost of goods sold.
- Form 8916, "Reconciliation of Schedule M-3 Taxable Income with Tax Return Taxable Income for Mixed Groups," has a new line for dual consolidated losses disallowed.
- The first date for reportable entity partners to report to the partnership has been changed to Sept. 15, 2006, from June 30, 2006.
- Cooperative associations filing the new, previously announced Form 1120-C will file Schedule M-3 for Form 1120 if they report total assets of $10 million or more. The instructions for Form 1120 Schedule M-3 provide details.
"Schedule M-3 will enable the IRS to focus more quickly on high risk issues and taxpayers requiring our attention, and reduce our time spent with compliant taxpayers," said IRS Large and Mid-Size Business Division Commissioner Deborah M. Nolan, in a statement.Schedule M-3 is filed by corporations and partnerships that have $10 million or more in assets, and certain other partnerships. Filers of Forms 1120-PC, 1120-L, 1120S and 1065 will begin filing Schedule M-3 with their 2006 tax returns. Form 1120 corporate filers started filing Schedule M-3 with their 2004 returns.
The final drafts of Schedules M-3, Form 8916 and Form 8916-A, and instructions can be found at www.irs.gov. The site also offers taxpayers a subscription to the Schedule M-3 e-mail news service.
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