Bridging the Reporting Gap: A Proposal for More Informative Reconciling of Book and Tax Income
Author(s)
Plesko, George; Mills, Lillian
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In this paper we review the history and purpose of the corporation income tax return's
Schedule M-1 in light of recent attention to corporate reporting issues. Although the
traditional role for the schedule has been to assist the audit process, the reconciliation of
book to tax accounting numbers also provides information that is useful to tax analysts. We
find the existing tax return Schedule M-1, largely unchanged since its introduction in 1963,
provides insufficient detail for complex reconciliation issues. We propose a modified M-
1 to achieve better reconciliation, and discuss the advantages, and disadvantages, of public
disclosure of such data
Date issued
2003-03-14Series/Report no.
MIT Sloan School of Management Working Paper;4289-03