Corporations (1120 & 1120’S’)

The IRS Large and Mid-Size Business Division will assist taxpayers in resolving uncertain tax positions prior to taxpayer adoption of the new FASB Interpretation 48. Existing issue resolution processes will result in expedited resolution of qualifying issues where the taxpayer provides complete disclosure and transparency.

Certain large and mid-size corporations are required to electronically file their Forms 1120 and 1120S. Other corporations may do so voluntarily.

Schedule M-3 is used by certain corporations and partnerships to reconcile financial accounting net income and taxable income. Affected corporations and partnerships are those with assets of $10 million or more that file Form 1120, 1120-PC, 1120-L, 1120S, or 1065 Certain other partnerships filing Form 1065 are also required to use the Schedule M-3.

The Internal Revenue Service has a comprehensive strategy in place to combat abusive tax shelters and transactions. This strategy includes guidance on abusive transactions, regulations governing tax shelters, a hotline for taxpayers to use to report abusive technical transactions, and enforcement activity against abusive tax shelter promoters and investors.

The Industry Issue Resolution (IIR) Program resolves frequently disputed or burdensome tax issues. IRS solicits suggestions for issues for the program from taxpayers, representatives and associations.

The LMSB / Appeals Fast Track Settlement program is a joint effort between the Large and Mid-Size Business (LMSB) Division and Appeals to use the mediation skills and delegated settlement authority of Appeals to resolve issues while still under LMSB jurisdiction.

The Pre-Filing Agreement Program is expected to reduce taxpayer burden and make more effective use of IRS resources by resolving or eliminating tax controversy earlier in the examination process.

The IRS Large and Mid-Size Business (LMSB) Division is implementing a new streamlined examination process.

The Internal Revenue Service is taking steps to improve tax compliance by corporations and their executive employees. One area of emphasis is executive compensation, for which audit technique guides have been developed for use by agents in examining tax returns filed by corporations and executives.

Coordinated issue papers, industry director guidance, audit technique guides and other documents provide technical information and guidance on complex tax law and administrative issues affecting the LMSB division and LMSB taxpayers.

An eligible domestic corporation can avoid double taxation (once to the shareholders and again to the corporation) by electing to be treated as an S corporation.

This division serves businesses with less than $10 million in assets.

The Appeals Office resolves tax controversies, without litigation, on a basis that is fair and impartial to both the Government and the taxpayer.