Trends in the Sources of Permanent and Temporary Book-Tax Differences During the Schedule M-3 Era

We use aggregate Schedule M-3 tax return data from Subchapter C corporations to provide descriptive evidence on book-tax differences from 2004 to 2013. Across the sample period, our primaryfrndings are: (1) total book-tax differences increase, (2) a substantial amount of book-tax differences are explained by firms' operations and financing, as well as economic incentives, (3) firms report a substantial but decreasing amount of book-tax differences in the "other" categories, (4) the frequency and magnitude of reportable transactions decreases significantly, and (5) foreign earnings and repatriations increase. However; the relative amount of foreign earnings repatriated decreases substantially after 2009.