IIR Guidance Issued
Capitalization of Retail and Restaurant Assets
Revenue Procedure 2015-56 provides a safe harbor method of accounting for amounts to remodel or fresh qualified retail and restaurant buildings.
FAQs: Rev. Proc. 2015-56 provide assistance to taxpayers on the implementation of the remodel-refresh safe harbor and provide direction to IRS agents in the examination of taxpayers changing to and using the safe harbor method of accounting.
Capitalization of Cable Assets
Revenue Procedure 2015-2 provides several safe harbor methods of accounting for certain property costs paid or incurred by cable system operators.
Directive LB&I 04-0415-003, Examination of Taxpayers Using the Safe Harbor Methods of Accounting for Cable Network Assets, provides direction to the field in the examination of taxpayers using the safe harbor methods of accounting for cable network assets.
Deductions for Eligible Debt and Eligible Debt Securities
- LB&I Directive 04-1014-008 provides guidance regarding bad debt deductions claimed under §166 by a bank. In addition, it clarifies that LB&I examiners will not challenge the inclusion of certain estimated selling costs in a bank’s bad debt deduction.
Hedging of Variable Annuity Guaranteed Minimum Benefits by Insurance Companies
- LB&I Directive 04-0514-0050 provides that LB&I examiners should not challenge the eligibility of an insurance company’s guaranteed minimum benefit (“GMxB”) Hedges and to provide a uniform method of accounting for certain GMxB Hedge income, deductions, gains and losses, which allows LB&I and taxpayers to more efficiently manage their audit resources.
Capitalization of Power Generation Assets
Revenue Procedure 2013-24 provides definitions of units of property and major components taxpayers may use to determine whether expenditures to maintain, replace, or improve steam or electric power generation property must be capitalized under § 263(a) of the Internal Revenue Code.
Directive LB&I 04-0713-005 provides direction to the field in the examination of a taxpayer eligible to change to the method of accounting provided in Rev. Proc. 2013-24 for steam or electric generation property.
Partial Worthlessness Deduction for Eligible Securities Reported by Insurance Companies
- LB&I Directive advises that examiners should not challenge an insurance company’s partial worthlessness deduction under §166(a)(2) for the amount of the Statement of Statutory Accounting Principle (SSAP) 43R credit-related impairment charge-offs of eligible securities as reported on its Annual Statement.
Capitalization of Electric Transmission and Distribution Property
- Revenue Procedure 2011-42 provides taxpayers with guidance regarding the use and evaluation of statistical samples and sampling estimates.
- Revenue Procedure 2011-43 provides a safe harbor method of accounting that taxpayers may use to determine whether expenditures to maintain, replace, or improve electric transmission and distribution property must be capitalized under § 263(a) of the Internal Revenue Code. The revenue procedure also provides procedures for obtaining automatic consent to change to the safe harbor method of accounting.
Capitalization and depreciation of network assets in the telecommunications industry
- Revenue Procedure 2011-22 that provides a safe-harbor method for determining the recovery period for depreciation of certain tangible assets used by wireless telecommunications carriers.
- Revenue Procedure 2011-27 that provides similar safe harbors for ‘wireline’ telecom carriers, firms with ‘landline’ networks.
- Revenue Procedure 2011-28 for the wireless telecom sector providing two alternative safe-harbor methods for determining the amount of network asset repair and replacement expenditures that must be capitalized.
Field Directive on Treatment of Sales-Based Vendor Allowances (“SBVA”) and Margin Protection Payments (“MPP”) under § 471
- Field Directive advises the field to treat a SBVA and a MPP as a purchase price adjustment and not as an income adjustment for purposes of § 471 of the Internal Revenue Code. Additionally, this Directive advises the field to continue to rely on Treas. Reg. §1.471-8 to arrive at ending inventory value under the retail inventory method of accounting (RIM).
Publicly-Traded Partnerships that Experience a Technical Termination
- Industry Director Communication - This guidance provides notice and field direction relating to a publicly-traded partnership that has experienced a technical termination under section 708 of the Internal Revenue Code.
LIFO Pooling for Resellers of Cars, Light-Duty Trucks
- Revenue Procedure 2008-23 provides, for tax years ending on or after December 31, 2007, a safe harbor pooling method, the Vehicle-Pool Method, for resellers of cars and light-duty trucks.
Work Opportunity and Welfare-to-Work Tax Credits
- Announcement 2006-49 in which IRS and Treasury have concluded that the states largely applied the family-member requirements in a manner consistent with the holding of Rev. Rul. 2003-112. Therefore, no Internal Revenue Service administrative resolution is necessary or appropriate.
Heavy Equipment Dealers' Parts Inventory
- Revenue Procedure 2006-14 provides a safe harbor to heavy equipment dealers for use of replacement costs of parts.
Facsimile Signatures on Employment Tax Returns
- Revenue Procedure 2005-39 provides circumstances when facsimile signatures can be used to sign employment tax forms.
Truck Sale Excise Tax
- Revenue Procedure 2005-19 provides guidance for truck dealers in determining whether a truck body is subject to federal excise tax.
Reporting Employment Taxes in Context of Mergers, Consolidations, etc.
- Revenue Procedure 2004-53 provides guidance on the new Schedule D (Form 941). It also explains both the standard procedure and an alternate procedure for preparing and filing Form W-2, Wage and Tax Statement; form 941, Employer's Quarterly Federal Tax Return; Form W-4, Employee's Withholding Allowance Certificate; and Form W-5, Earned Income Credit Advance Payment Certificate, in certain acquisitions. This revenue procedure supersedes Rev. Proc. 96-60, 1996-2 C.B. 399. This revenue procedure also amplifies Rev. Rul. 62-60, 1962-1 C.B. 186.
Health Care Provider Incentive Payments
- Rev. Proc. 2004-41 sets forth circumstances under which an insurance company that makes incentive payments to health care providers will be permitted to include those payments in discounted unpaid losses without regard to § 404 of the Internal Revenue Code. The revenue procedure also provides procedures under which a taxpayer may obtain automatic consent of the Commissioner to change its method of accounting for such payments.
Truck or Highway Tractor for Purposes of the Retail Excise Tax
- Revenue Ruling 2004-80 applies the primarily designed test in section 145.4051-1(e)(1) and (2) of the Temporary Excise Tax Regulations Under the Highway Revenue Act of 1982 (Pub. L. 97-424) for purposes of determining whether a vehicle is a truck or a highway tractor.
- IR-2004-73 provides that film producers and others in the motion picture industry can rely on new guidance from the IRS on the treatment of costs to acquire and develop scripts and other creative properties.
- Revenue Ruling 2004-58 - May a taxpayer deduct the cost of acquiring and developing creative property as a loss under § 165(a) of the Internal Revenue Code in certain situations?
- Revenue Procedure 2004-36 provides a safe harbor method of accounting under which a taxpayer within the scope of this revenue procedure may amortize creative property costs (as defined) ratably over a 15-year period. This revenue procedure also provides procedures for taxpayers to obtain the automatic consent of the Commissioner of Internal Revenue to change to the safe harbor method of accounting provided in this revenue procedure.
Recoverable Oil and Gas Reserves
- July 30, 2004 Field Directive on Cost Depletion - Determination of Recoverable Reserves
- Revenue Procedure 2004-19 provides an elective safe harbor that the owner of an oil and gas property may use in determining the property’s recoverable reserves for purposes of computing cost depletion under § 611 of the Internal Revenue Code.
Safe Harbor Method For Treating Fiber Optic Cable
- Revenue Procedure 2003-63 provides a safe harbor method under which the Internal Revenue Service will treat a node and fiber optic cable used in a cable television distribution system providing one-way and two-way communication services as the unit of property for computing depreciation under sections 167 and 168 of the Internal Revenue Code.
Depreciation of Gasoline Station Pump Canopies and Supporting Concrete Footings
- Revenue Ruling 2003-54 provides that gasoline pump canopies are not inherently permanent structures, and are classified as tangible personal property. Depending on depreciation system used, cost of canopies can be recovered over either 5 or 9 years. Also, the supporting concrete footings to anchor the canopies are considered to be inherently permanent structures classified as land improvements. Depending on depreciation system used, cost of concrete footings is recoverable over either 15 or 20 years.
Standard Rates for Meals Provided by Family Day Care Providers
- Revenue Procedure 2003-22 provides family day care providers with the option to use standard meal and snack rates, in lieu of actual cost, in computing the deductible cost of food provided to eligible children under their care.
Child and Adult Care Food Program (CACFP) Reimbursement Rates : For purposes of Rev. Proc. 2003-22, family day care providers may use the Tier 1 rates in effect on December 31st preceding the beginning of their taxable year.
Inventory Valuation Method for Re-Buildable Motor Vehicle Cores.
- Revenue Procedure 2003-20 provides a safe harbor method of accounting (the "Core Alternative Valuation" (CAV) method) for remanufacturers and rebuilders of motor vehicle parts ("remanufacturers") and resellers of remanufactured and rebuilt motor vehicle parts ("resellers") that use the lower of cost or market (LCM) inventory valuation method to value their inventory of cores held for remanufacturing or sale.
Reporting of Payments to Employees Who Owned Heavy Equipment Used by Their Employers
- Revenue Procedure 2002-41 provides that payments by pipeline construction employers to employees, who are required to use their own welding or mechanics rigs as a condition of employment, to reimburse them for rig-related expenses under an accountable plan are considered substantiated at up to $13 an hour.
- Revenue Ruling 2002-35 clarifies that payments to employees for equipment they are required to provide as a condition of employment are wages for federal employment tax purposes unless such amounts are paid under an accountable plan; revoked Revenue Ruling 68-624.
Treatment of Restaurant Smallwares Packages
- Revenue Procedure 2002-12 provides taxpayers in the trade or business of operating a restaurant or tavern with a safe harbor method of accounting for the cost of “smallwares.”
Local Impact Fees Associated with Low Income Housing Tax Credit Property and the Treatment with Respect to Eligible Basis
- Revenue Ruling 2002-9 concludes that impact fees incurred in connection with the construction of a new residential rental building are capitalized costs of the building.
Demonstrator Vehicles Provided for Use by Employees
- Revenue Procedure 2001-56 provides simplified methods auto dealerships can use to determine the dollar amount to be included in, or excluded from, the income of employees provided with vehicles by the dealerships.
Conformity Election by Banks for Bad Debts
- Revenue Ruling 2001-59 clarifies the necessary steps to record a loan as a "loss asset" under the bad debt conformity method of accounting for banks. Also, released December 12, 2001 Industry Directive to IRS examiners on the Conformity Election for Bank Bad Debts.
Certain Costs of Golf Course Construction
- Revenue Ruling 2001-60 allows certain golf course land improvement costs to be depreciated. Also, released February 7, 2002 Industry Directive to examiners on Depreciable Golf Course Land Improvements and the Impact of Rev. Rul. 2001-60. Additionally, February 25, 2002 Industry Directive on Audit Procedures for Golf Course Land Improvements - Change In Accounting Method was issued.