Inside the New Federal Schedule M-3 for Accounting Firms

Handling the Government’s Demands for More Data from Your Clients

Recording of a 100-minute CPE webinar with Q&A

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Conducted on Wednesday, March 14, 2007

Course Materials


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 – including Judy McNamara, an IRS senior program analyst and its IRS staffer on Schedule M-3, and George Manousos of PricewaterhouseCoopers – helps to demystify Schedule M-3 in time to help clients prepare 2006 tax year returns.



You’ll leave the teleconference 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.


Judy McNamara
Judy McNamara
Member, Pre-Filing and Technical Guidance Team

She’s been heavily involved with all aspects of Schedule M-3 since January 2005, including working with a team on...  |  Read More

George Manousos
George Manousos

He works in the national tax practice and serves as a national resource for advising clients on complex federal tax...  |  Read More

Kelly Hodgson
Kelly Hodgson
Product Manager

She is assigned to InSource income tax products for this major tax software company.

 |  Read More