Inside the New Federal Schedule M-3 for Accounting Firms

In the interest of speeding up audits and improving transparency of corporate financials, the IRS in recent months finalized significant changes to Schedule M-3, the detailed income/loss reconciliation statement.

Your firm must get its tax clients ready to adjust their tax compliance and documentation processes and data gathering, in time to file the new Schedule M-3 for the 2006 tax year.

Schedule M-3 demands more than 60 lines of financial information from C corporations with assets of $10 million or more. Starting with the 2006 tax year, partnerships, S corporations and insurance companies meeting that $10 million threshold must file the report, too. Each affiliated business entity must file its own Schedule M-3.

Among the IRS-approved revisions are a new Form 8916-A (reconciliation of cost of goods sold) and more information about dual consolidated losses disallowed.

Accounting firms must understand the latest changes, be confident their clients can produce all of the accurate data for Schedule M-3, and be prepared to answer tough questions about the new Schedule M-3 rules from your key clients.

Listen as our panel of IRS representatives and veteran tax advisors helps to demystify Schedule M-3 in time to help clients prepare 2006 tax year returns.

After listening to the teleconference on CD, you’ll be well-briefed on Schedule M-3 and the latest changes and ready to:

• Evaluate clients’ current federal tax compliance processes and whether they’re comprehensive enough to deliver the new Schedule M-3.
• Assess whether clients are gathering enough of and the right kind of data.
• Prepare clients for possible required, major tax compliance software changes.

Our panel includes:

Judy McNamara is a member of the IRS’ pre-filing and technical guidance team as the senior program analyst for Schedule M-3. She’s been heavily involved with all aspects of Schedule M-3 since January 2005, including working with a team on developing all associated forms and coordinating the schedule’s FAQ Web site.

George Manousos is a Washington-based partner in the national tax practice of PricewaterhouseCoopers. In that job, he serves as a national resource for advising clients on complex federal tax issues. George previously was a taxation specialist in the U.S. Treasury Department’s office of tax policy.

Kelly Hodgson is the product manager for InSource income tax products at Thomson/RIA, where she’s worked for six years. She’s also worked as a direct representative and lead business systems analyst on InSource products. Earlier in her career, Kelly was a senior tax accountant for Sammons Corp. and also worked at Deloitte & Touche.

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TELECONFERENCE CD
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