Post by Sapphire Capital on Aug 7, 2008 1:39:10 GMT 4
IRS changes corporation income tax return form
source: Catherine Snowdon, New York
On July 30 2008 the Internal Revenue Service (IRS) released for public comment draft revisions to form 1120, US corporation income tax return and form 1065, US return of partnership income. These forms will be for use for tax years ending on or after December 31 2008.
The draft forms reflect changes suggested in comments received from the initial drafts released in August 2007.
"The draft revisions and new forms will increase transparency about the ownership and relationships between entities that make up complex enterprise business structures," said Frank Ng, commissioner of the Large and Mid-Size Business Division of IRS. "This will enable IRS to better assess compliance risk."
The major change to form 1120 is to schedule K and involves reporting direct and indirect ownership. When ownership meets certain percentage thresholds, it must be reported on schedule K. Certain questions on schedule K have been revised for this reporting.
The new schedule B (form 1120) is required of corporations that file form 1120 schedule M-3. Schedule B (form 1120) will provide IRS information about allocations, transfers of interest, cost sharing arrangements, and changes in methods of accounting.
"The changes represent a continued focus of the IRS on related party transactions, as the IRS is seeking greater disclosure with respect to certain items such as cost sharing arrangements and also greater disclosure regarding common ownership between related parties, said Marc Gerson of Miller & Chevalier in Washington DC.
source: Catherine Snowdon, New York
On July 30 2008 the Internal Revenue Service (IRS) released for public comment draft revisions to form 1120, US corporation income tax return and form 1065, US return of partnership income. These forms will be for use for tax years ending on or after December 31 2008.
The draft forms reflect changes suggested in comments received from the initial drafts released in August 2007.
"The draft revisions and new forms will increase transparency about the ownership and relationships between entities that make up complex enterprise business structures," said Frank Ng, commissioner of the Large and Mid-Size Business Division of IRS. "This will enable IRS to better assess compliance risk."
The major change to form 1120 is to schedule K and involves reporting direct and indirect ownership. When ownership meets certain percentage thresholds, it must be reported on schedule K. Certain questions on schedule K have been revised for this reporting.
The new schedule B (form 1120) is required of corporations that file form 1120 schedule M-3. Schedule B (form 1120) will provide IRS information about allocations, transfers of interest, cost sharing arrangements, and changes in methods of accounting.
"The changes represent a continued focus of the IRS on related party transactions, as the IRS is seeking greater disclosure with respect to certain items such as cost sharing arrangements and also greater disclosure regarding common ownership between related parties, said Marc Gerson of Miller & Chevalier in Washington DC.