The M-3 doesn't provide additional protection, but it does reconcile financial statements and:
- Gives the IRS additional information about tax return calculations and the differences between book income numbers and taxable income numbers
- Contains 3 main sections: (the detail requested must be present for book and financial statements and tax)
- Financial statement reconciliation (Part I)
- Detail of income/loss items and (Part II)
- Detail of expenses/deductions (Part III)
- The M-3 requires companies to expose the types of adjustments they are making to book numbers to derive at taxable income.
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