Proposed regulations would allocate sales-based royalties and vendor allowances to property sold during the tax year. The preamble indicates that the intention of the proposed regulations is that neither sales-based royalties nor sales-based vendor allowances should adjust the value of ending inventories.
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Tax Accounting
IRS Issues Guidance on Treatment of Gift Cards
This item provides background information on the tax and accounting treatment of gift card income and discusses two revenue procedures that address these issues.
Could Forgetting to Include the Effect of UNICAP Put Accounting Method Changes at Risk?
Taxpayers making automatic accounting method changes that affect capitalizable costs should consider the uniform capitalization rules of Sec. 263A and the related regulations (UNICAP rules).
100% Bonus Depreciation Guidance Issued
In Rev. Proc. 2011-26, the IRS has issued guidance on how taxpayers can deduct 100% of the cost of qualified business property placed in service in 2011 under rules enacted last year .
Tax Court Rejects Taxpayer’s Argument That Denial of Accounting Method Change Was Arbitrary
The Tax Court held that the IRS’ rejection of a taxpayer’s accounting method change request was not the result of an “automatic rejection policy” and that the IRS acted within its proper discretion in denying the request.
Changes in Book Recognition of Advance Payments May Require Changes in Tax Accounting Method
Rev. Proc. 2011-14 recently introduced a new automatic consent method change for taxpayers wishing to use the new book method of recognizing advance payments in revenues for purposes of determining the extent to which advance payments are included in gross income.
Updated Procedures for Changing Accounting Methods and New Automatic Method Changes
The IRS released Rev. Proc. 2011-14, which provides the exclusive procedures for taxpayers to obtain automatic consent for a change in method of accounting.
Favorable Guidance Issued on Deferral of Gift Card Sales and Gift Cards Issued for Returned Goods
The IRS issued two taxpayer-favorable revenue procedures addressing the treatment of payments received for gift cards.
IRS Releases 2011 Automobile Depreciation Limits
The IRS has issued the 2011 inflation adjustments to the depreciation limitations and lease inclusion amounts for certain automobiles. This year, the IRS has provided the limitation amounts for vehicles placed in service in 2011 for which bonus depreciation applies and for those to which it does not apply.
AICPA Recommends Ways IRS Could Reduce Schedule M-3 Burdens
The AICPA encouraged the IRS to collaborate with external stakeholders in revising Schedule M-3, Net Income (Loss) Reconciliation, and suggested some revisions to reduce taxpayers’ compliance burdens.
Reporting Uncertain Tax Positions
This item explores the differences between financial statement reporting and federal income tax return disclosure in preparing for disclosure of uncertain tax positions on the Schedule UTP,
Prop. Regs. on Sales-Based Royalties and Vendor Allowances
The IRS issued much-anticipated proposed regulations on the capitalization and allocation of sales-based royalties and on adjustments to the cost of merchandise inventory for sales-based vendor allowances.
Disclosure of Nonincome Tax Contingencies Under ASC 450 for Not-for-Profit Entities
This item focuses on the importance of properly accounting for and considering the impact of nonincome taxes as they apply to not-for-profit (NFP) entitles.
Guidance Issued on 100% Bonus Depreciation Rules
The IRS issued guidance on how taxpayers can deduct 100% of the cost of qualified business property placed in service in 2011 under rules enacted last year.
Automatic Method Change Procedures Have Increased in Complexity and Level of Required Detail
Rev. Proc. 2011-14, governing automatic change of accounting method procedures was issued by the IRS on January 10, 2011, and is effective for applications filed on or after January 10, 2011, for a year of change ending on or after April 30, 2010. It contains over 137 automatic changes.
2011 Automobile Depreciation Limits Released
The IRS issued the 2011 inflation adjustments to the depreciation limitations and lease inclusion amounts for certain automobiles under Sec. 280F.
IRS Provides Safe-Harbor Methods for Auto Dealers Using UNICAP
Rev. Proc. 2010-44 resolves some of the issues raised by TAM 200736026 involving UNICAP issues affecting automobile dealerships; specifically, whether the installation of parts on customer-owned vehicles, and on taxpayer-owned vehicles, constitutes “production” for purposes of the UNICAP regulations.
Automatic Procedures for Changing Accounting Methods Updated, Expanded
The IRS released updated procedures under which taxpayers can receive automatic consent to change their accounting methods.
Changing Corporations’ Accounting Methods
A corporation that has adopted an accounting method cannot change that method simply by amending prior-year income tax returns; IRS permission is required to change methods.
Unrealized Built-in Gains and Losses Under Sec. 382 and the Tax Accounting Rules
Do not forget to consider the tax accounting method rules (for accrued income or expense items) when dealing with Sec. 382.
TAX PRACTICE MANAGEMENT
2025 tax software survey
AICPA members in tax practice assess how their return preparation software performed during tax season and offer insights into their procedures.
