There are good reasons why small taxpayers may want to comply.The IRS released Revenue Procedure 2015-20 on February 13, 2015.
This new Revenue Procedure provides small taxpayers an exemption to comply with the new Tangible Property Regulations for 2014. Small taxpayers are defined as those with total assets of less than $10 million (as of January 1, 2014) or having average annual gross receipts of $10 million or less for the prior three taxable years. It is important to note, however, that small businesses must still implement the regulations and therefore it may still be in their best interest to comply and file the necessary forms unless they have immaterial fixed assets. Filing the forms may protect small companies and provide them with an opportunity to still qualify for the related deductions.
- The final Tangible Property Regulations (TPR) have not changed
- Revenue Procedure 2015-20 only addresses the issues associated with the implementation of the TPRs and only for taxpayers that qualify under the new Revenue Procedure.
- Taxpayers should still comply with the TPRs and file the necessary forms unless they have immaterial fixed assets and TPR issues.
- If you are a small taxpayer and elect not to file the appropriate Forms 3115s for Revenue Procedure 2015-20, it is likely that your tax preparer may ask for a statement of indemnification.
- The indemnification document will likely cover the facts and consequences of not filing and your clear choice that you chose not to file nonetheless.