Washington copes with Cicadas while TEI buzzes with technical activities: schedule M-3, U.S. tax legislation on FSC/ETI repeal, OECD permanent establishment rules, LMSB's IDR process changes, and Form 8858 keep TEI humming with activity.

• Position: Recent Activities

This spring has been noteworthy because Magicicada Brood X--popularly known as the periodical cicada--emerged after waiting underground for seventeen years. Cicadas are large, flying insects best known for their prodigous numbers and their unrelenting acoustic "songs." Not to be outdone, TEI generated conspicuous signals of its own during the past couple of months on several important tax issues. (We don't mean to be a pest, but we are persistent.)

Proposed Schedule M

For the past several months, a working group of TEI members has interacted with the Treasury Department and the IRS's Large and Mid-Size Business Division on the design of a new tax return schedule relating to book-tax differences and the government's desire to enhance "transparency." New Form Schedule M-3, Net Income (Loss) Reconciliation for Corporations with Total Assets of $10 Million or More, would expand the current Schedule M-1 and increase the transparency of corporate tax return filings. In comments filed with LMSB on June 7, TEI commended LMSB for its efforts to achieve currency in audits and focus on those issues of most concern to the government reducing taxpayer burden. Following on comments made during several meetings, however, the Institute cautioned that the design and implementation of proposed Schedule M-3 must take into account a number of issues before it is adopted. One of TEI's major recommendations is to delay the effective date of at least portions of the new schedule. TEI explained that deferring the implementation of the new form was necessary because taxpayers would otherwise have insufficient time to complete the necessary systems changes and, further, because current year data are already being processed in existing systems. TEI also provided specific member comments and questions on draft Schedule M-3, as well as the draft instructions.

TEI's efforts on Schedule M-3 were coordinated by Nell Traubenberg of Storage Technology Corporation, chair of TEI's Federal Tax Committee. The Institute's letter appears in this issue beginning on page 258.

Pending U.S. Legislation

On June 3, TEI followed up on earlier comments about pending tax legislation by submitting comments to members of the House Ways and Means Committee. Filed before Committee Chair Bill Thomas released the latest version of the House bill, the Institute's submission identified both provisions of S. 1637, the Jumpstart Our Business Strength (JOBS) Act, that should be enacted and...