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IRS Increases De Minimis Safe Harbor to $2,500
Posted by Bob Smith on Wed, Dec 2, 2015 @ 09:35 AM

The final tangible property regulations issued in 2013 provide a safe harbor election that allows qualifying businesses to immediately deduct purchases of tangible property below certain dollar thresholds. For taxpayers that do not have an applicable financial statement (typically an audited financial statement) (“AFS”), the dollar threshold was $500.The IRS received many comments suggesting that the $500 threshold was too low to effectively reduce the administrative burden of complying with the capitalization requirement for small businesses. After consideration of these comments, the IRS recently announced that the de minimis safe harbor threshold would be increased to $2,500 beginning with 2016 tax years. The dollar threshold for taxpayers with an AFS remains at $5,000.

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Topics: Tangible Property Regulations, IRS Updates, Bob Smith

Small Taxpayers Get Exemption from Tangible Property Regulation Compliance, but ...
Posted by Bob Smith on Fri, Mar 13, 2015 @ 09:24 AM

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.
 
Important:
  • 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.
Bottom Line:
  • 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.
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Topics: Tangible Property Regulations, compliance, Bob Smith, revenue procedure 2015-20

Tangible Property Regulations Compliance and Tax Savings Checklist
Posted by Bob Smith on Tue, Mar 10, 2015 @ 09:12 AM

Do You Know About the Combination of Tax Savings and Compliance Costs?

The new Tangible Property Regulations are very complex and consist of a number of intricate accounting rules and changes that taxpayers will face during this tax season and beyond.

We’re pleased to offer this checklist that will provide you with points for discussion with your accountant in order to prepare your 2014 tax return in a manner that will get you into compliance as well as for identifying cost savings opportunities:

Tangible Property Regulations Checklist

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Topics: Tangible Property Regulations, compliance, tax savings, Bob Smith

Opportunities and Obligations under the Tangible Property Regulations
Posted by Carl Giardino on Thu, Sep 11, 2014 @ 08:11 AM

Time is running out for taxpayers to implement the new tangible property regulations. The new rules must be followed beginning in 2014. All taxpayers with tangible business and investment property will need to analyze current accounting practices and potentially institute changes to conform to the new rules. Many taxpayers can leverage the final regulations to increase and accelerate tax deductions. Others may have to defer or recapture deductions as a result of the new rules. And given that many of these rules simply didn't exist a couple of years ago, virtually all taxpayers with tangible property will need to request one or more accounting method changes on their 2014 tax returns to become compliant.

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Topics: Tangible Property Regulations, tax planning, tax, Carl Giardino

New Tangible Property Guidance Allows Late Partial Disposition Elections
Posted by Kristen Shepley on Fri, Jun 13, 2014 @ 09:31 AM

On February 28, the IRS issued new guidance that allows taxpayers to claim a loss on structural components of buildings retired in prior years. Rev. Proc. 2014-17 provides updated automatic consent procedures for accounting method changes, which allows taxpayers to make a late partial disposition election accounting method change. The guidance also allows taxpayers to revoke any general asset account elections made under the temporary regulations. Rev. Proc. 2014-17 supersedes Rev. Proc. 2012-20.

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Topics: Tangible Property Regulations, Partial Dispositions, IRS

IRS Issues Implementation Guidance on Tangible Property Regulations
Posted by Carl Giardino on Wed, Mar 26, 2014 @ 09:14 AM

On January 24, the IRS issued Rev. Proc. 2014-16 clarifying the automatic consent procedures for accounting method changes required or permitted by the temporary and final tangible property regulations issued last September (see our Federal Tax Alert, Updated Tangible Property Rules Expand Safe Harbors, Disposition Rules). Please note that Rev. Proc. 2014-16 modifies Rev. Proc. 2012-19 and rev. Proc. 2011-14.

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Topics: Tangible Property Regulations, IRS, IRS Updates, Carl Giardino

Latest Guidance on Tax Issues
Posted by Kristen Shepley on Mon, Apr 23, 2012 @ 10:00 AM

Foreign Account Compliance, Tangible Property Regulations, and Amazon Laws

The CBIZ Tofias Tax Team is pleased to present this summary of recent developments in tax planning and compliance.

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Topics: Tangible Property Regulations, Foreign Account Compliance, FATCA, Sales Tax, sales tax compliance, Amazon Laws

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