Mastering the Revised Federal Schedule M-3

Identifying and Reporting Data for Full Compliance

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

Conducted on Wednesday, July 22, 2009

Course Materials

This seminar will demystify the latest version of Schedule M-3 to guide tax staff in overcoming the challenges presented, and developing strategies to streamline and fine tune tax compliance.


Many corporate taxpayers will wrestle this summer and early fall with the latest overhaul of federal Schedule M-3 for the 2008 tax year. In recent years, companies with $10 million or more in assets have faced two major IRS reworkings of Schedule M-3.

As tax staff gather data to complete 2008 returns, they must produce new schedules listing deductions tied to effectively connected income, allocated interest expense, and foreign partner interest in partnerships. There is also a new reporting format and newly separated schedules M-1 and M-2.

The compliance mission for producing this intricate income/loss reconciliation statement has become even tougher for corporate federal income tax professionals, demanding more time in the last months before extended 2008 tax year filings.

Listen as our panel of veteran tax advisors breaks down the latest version of Schedule M-3 and outlines how tax staff can streamline and fine-tune corporate tax compliance.



  1. Historical perspective
    1. Review of 2006 year-end revisions to Schedule M-3
  2. New forms, schedules, issues for Form 1120-F filers
    1. Three new schedules, tied to:
      1. Effectively connected income
      2. Allocated interest expense
      3. Foreign partner interest in partnerships
    2. Newly separated schedules M1 and M2
    3. Requirements to file Schedule M-3
    4. Requirements for more information from foreign companies
  3. Changes in Form 8916A
    1. Additions for parts 2 and 3 on uncommon interest and expense
    2. Break-outs for detailed items regarding those lines
  4. Partnership issues
    1. Retention of reportable entity partner notification by entity partner and partnership
    2. Specific hierarchy for financial statements
    3. Special rules for Schedule L for Schedule M-3 filers
  5. Data-gathering and reconciliation issues
    1. How items are reported, what to do with the information
    2. Expensing transaction costs
    3. Problematic entries such as inter-company dividends


The panel will brief your company's tax staff on how to handle these and other challenges with the new Schedule M-3:

  • Gathering and reporting the data to prepare the three new schedules and segregated schedules M-1 and M-2.
  • Adjusting to the new format of Schedule M-3.
  • Staying ahead of reconciling book-to-taxable income differences, differences in GAAP and statutory accounting, and other revisions from the last Schedule M-3 overhaul in late 2006.


John P. Bennecke
John P. Bennecke

Managing Director
True Partners Consulting

He offers consulting on tax compliance issues to a variety of large and mid-sized multinational corporate entities,...  |  Read More

Tim Ross
Tim Ross
Partner and Firmwide Leader for Large and Midsized
Clifton Gunderson

He is responsible for helping clients in all areas of business tax, ranging from tax co-sourcing and outsourcing to...  |  Read More

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Strafford will process CLE credit for one person on each recording. CPE credit is not available on recordings. All formats include course handouts.

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