SEC. 2. CHANGES FROM REV. PROC.

2003–77

.01 Section 4.01(1) clarifies that if a taxpayer discloses an item on a line of a form or schedule that does not have a preprinted description identifying that item, then the taxpayer must enter the description on that line.

.02 Section 4.01(3) concerning Form 1120, Schedule M–1, Reconciliation of In- come (Loss) per Books With Income per Return, is expanded by adding a reference to the new Schedule M–3, Net In- come (Loss) Reconciliation For Corpora- tions With Total Assets of $10 Million or More, with regard to its Column (b), Tem- porary Difference, and Column (c), Per- manent Differences, in Parts II and III. The treatment of the Schedule M–1 is also clarified by removing the reference to “netting” and describing the extent of the protection provided by an entry on the schedule. A conforming clarification is made at section 4.01.

.03 Editorial changes have been made in updating Rev. Proc. 2003–77.