A First Look at 2005 Schedule M-3 Corporate Reporting

Charles E. Boynton is a program manager and senior program analyst with the IRS Large and Midsize Business Division Office of Research and Workload Identification. From September 2000 through May 2006, he was a Surrey Senior Research Fellow for the Treasury Office of Tax Analysis. He has been a member of the joint Treasury-IRS Schedule M-3 team from its formation in 2003.Portia DeFilippes is a financial economist in the Treasury's Office of Tax Analysis Economic Modeling and Computer Application Division. She and Boynton have explored comparisons of corporate financial statement and tax return data, book income and tax income differences, and tax return consolidation anomalies as part of their research.Ellen J. Legel is a senior staff economist and management official with the IRS Statistics of Income Division's Corporation Tax Branch. She has been a lead analyst for the Corporation Tax Program, and is the senior analyst for Schedule M-1, Schedule M-2, Schedule M-3, the 1120-RIC, and the 1120-REIT.Boynton, DeFilippes, and Legel have previously published two papers analyzing Schedule M-1 data for the period 1990-2003 (the 14 years immediately before the introduction of Schedule M-3 for large corporations) and a third paper analyzing initial 2004 Schedule M-3 data using advanced file data available in spring 2006.The authors thank the Statistics of Income Division for making data from the 2004 and 2005 SOI final corporate file available for this research. The authors thank the managements of their respective agencies for the support of their current and past research into Schedule M-1 and Schedule M-3 book income and tax income data: LMSB Office of Research and Workload Identification; Treasury Office of Tax Analysis; and the IRS Statistics of Income Division. The authors also thank Robert Adams, Petro Lisowsky, Bunn Martin, Don McPartland, and Kenneth Szeflinski for comments, suggestions, and review assistance. All errors and omissions are solely those of the authors.The opinions expressed are those of the authors and do not necessarily represent positions of Treasury or the IRS.The full 2004 and 2005 data sets for this study are available in an Excel format by e-mail. Table names containing an asterisk (*) have been excluded from this publication (but are available by request). To request the data set, e-mail charles.e.boynton@irs.gov. Please indicate in the e-mail how the data set will be used