Industry Issue Resolution Program to Address Two New Issues


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IRS News Release
Media Relations Office
Washington, DC

Media Contact: 202-622-4000
Public Contact: 800-829-1040

IR-2005-81, Aug. 8, 2005

WASHINGTON — The Internal Revenue Service and the Treasury Department today announced the Industry Issue Resolution (IIR) Program will address concerns relating to “member of a family receiving assistance” requirements for the Work Opportunity and Welfare to Work Tax Credits and the definition of home construction contracts.

Revenue Ruling 2003-112 provides guidance on when an individual meets the “member of a family receiving assistance” requirements. The National Employment Opportunities Network submitted a request for guidance to resolve the issues arising from the States’ interpretation of the requirements prior to the issuance of the revenue ruling.

The Construction Financial Management Association and Associate Builders and Contractors Inc. submitted a request to clarify the definition of home construction contracts, as outlined in IRC 460(e)(6)(A), primarily relating to income derived from residential real estate development that qualifies for the completed contract method of accounting.

"The IIR program provides clarity and consistency to complex tax issues, while reducing burden for taxpayers," said Large and Midsize Business Commissioner Deborah M. Nolan.  "These are issues that can be resolved for groups of affected taxpayers so that they do not become contested issues during tax examinations."

Since its inception in 2000, the IIR program has resulted in resolution of many different tax issues cumulatively affecting thousands of taxpayers in many different lines of business. For each issue selected, a multi-functional team gathers and analyzes the relevant facts and recommends guidance.

At any time, business associations and taxpayers may submit tax issues that they believe could be resolved through the IIR program. IIR project selection criteria and submission procedures are outlined in Revenue Procedure 2003-36, which is available on the IRS Web site at The IRS reviews submissions at least semi-annually with the next review to be completed by August 31, 2005.

Attached is detailed information regarding the issues the IRS considered during its latest review of IIR submissions.



Cross   Industry

Issue Description:  Clarification of Eligibility for Work Credit and Welfare to Work Credit

IRS Contact:   

Henry Singleton
Industry Director, Retail,  Food, Pharmaceutical and HealthCare

Phone #   630-493-5900

Submitted by:
Dewey Ballantine on behalf of the National Employment Opportunities Network




Construction Industry

Issue Description:  Definition of a Home Construction Contract

IRS Contact:

Paul Cordova
Director, Field Operations, Natural Resources and Construction Industry

Phone # 213-576-3604

Submitted by: 
Carbis Walker LLP on behalf of CFMA

Associate Builders and Contractors Inc.




Motor Vehicle Industry


Issue Description: Standardized Method for Interdepartmental Profit

Submitted by:
Crowe Chizek and Co.


Issue Description:  Alternative LIFO Method for Used Vehicles Not in Official Used Vehicle Guides

Submitted by:
Crowe Chizek and Co.


Issue Description:  Inventory Price Index Computation (IPIC) LIFO Method for Parts Inventory

Submitted by:
Crowe Chizek and Co.


Issue Description: Dealer Provided Fuel under Rev Proc 2001-56

Submitted by:
Crowe Chizek and Co.


Cross Industry


Issue Description:   Equipment Rental (Diving Gear)

Submitted by:
Deloitte Tax LLP


Issue Description:  Stand-alone amendments to Form 941 and 945

Submitted by:
National Payroll Reporting Consortium


Issue Description:  Form 1099 (MISC) for Medical Payment

Submitted by:
Society of Professional Benefit Administrators


Issue Description:   Tax Treatment of Elders Who Invest in Fraudulent Scams

Submitted by:
Bob Evans & Associates