Washington -- To encourage transparency in corporate tax return filing, the Internal Revenue Service and the Treasury Department unveiled a proposed draft form of Schedule M-3.
The form -- which expands the current Schedule M-1 -- would require corporate taxpayers filing Form 1120 to disclose additional information including sources of financial information, a reconciliation of the filer’s net income and reconciliation of the net income.
Both agencies said they expect the Schedule M-3 to increase transparency while minimizing the overall taxpayer burden.
"The proposed Schedule M-3 will make differences between financial accounting net income and taxable income more transparent,” said assistant Treasury secretary for tax policy Pam Olson. “This will help agents determine from the return whether the return should be audited and identify the differences that matter most in the audit of the return.”
The Schedule M-3 would only affect the filings of corporate taxpayers reporting gross assets of $10 million or more on Schedule L on Form 1120.
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