BACKGROUND
The IRS recently released an Audit Techniques Guide titled “Capitalization of Tangible Property”. Audit Techniques Guides (ATGs) help IRS examiners during audits by providing insight into issues unique to specific industries. While designed to provide guidance for IRS employees, these guides are useful to business owners and tax professionals as they are more reader-friendly than the code and regulations, and they often discuss the implications of case law as well as other relevant authorities.
WHAT THIS MEANS TO TAXPAYERS
The Capitalization of Tangible Property ATG deals primarily with issues related to the Tangible Property Regulations (TPRs). In March of 2012, the IRS issued a directive that suspended current field examinations on the repair vs. capitalization issues to permit taxpayers to file accounting method changes under recently issued temporary regulations and revenue procedures. The IRS has since been lenient on examination of TPR issues to allow taxpayers time to adopt the new rules. The new ATG shows that the IRS has renewed interest in auditing TPR issues to ensure proper compliance.
HOW CAN ICS TAX HELP?
ICS Tax has nationally-renowned experts in the Tangible Property Regulations that can assist with compliance-related issues as well as take advantage of several new, taxpayer-friendly provisions. For more information, please contact an ICS Tax representative.
Click below to view the full Audit Techniques Guide
About the author
Alexander Bagne
President · JD, CPA, MBA, CCSP
Alex is the President of ICS Tax, LLC (ICS). His expertise includes fixed asset reviews, cost segregation, the 179D and 45L energy efficiency incentives, accounting methods, research tax credits, and IC-DISC export incentives. Prior to ICS, Alex worked for a decade with several Big Four firms, including Ernst & Young, Deloitte Tax, and PricewaterhouseCoopers. His specialized planning ideas have saved his clients millions in tax dollars. He has given Continuing Professional Education on a variety of tax planning ideas throughout the country. He is published in the AICPA's Tax Adviser magazine and Accounting Today.
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