The IRS posted an updated directive for field examinations on the repair vs. capitalization issue that extends the suspension of examinations.
Expenses & Deductions
The IRS issued technical amendments to address the effective date for the temporary regulations that apply to amounts paid to acquire, produce, or improve tangible property.
The IRS announced it is delaying the effective date of the temporary regulations it issued in Dec. 2011 governing whether tangible property expenses could be deducted or had to be capitalized.
The IRS issued an update and new guidance for use of a federal per diem rate to substantiate the amount of ordinary and necessary expenses for lodging, meals and incidental costs paid or incurred for business-related travel away from home.
The IRS announced that it is discontinuing the high-low method for substantiating lodging, meal and incidental expenses incurred in traveling away from home.
The IRS issued revised inflation-adjusted numbers to reflect the extension of the increased Sec. 179 expensing amount for 2010.
The Sec. 199 deduction has garnered increased attention in IRS exams over the past two years.
The IRS has issued a follow-up directive on the Sec. 199 domestic production deduction (DPD) (LMSB-04-0707-049).
An IRS examination memorandum provides guidelines to examiners auditing excess per-diem payments in light of Rev. Rul. 2006-56. The issue involves taxpayers who pay reimbursement allowances to employees for travel expenses in an amount exceeding the Federal per-diem rate, without treating such excess amounts as wages for employment tax purposes.
The Service has released a new “Industry Director Directive” on the Sec. 199 domestic production activities deduction (DPAD). The directive, along with an associated document entitled “Minimum Checks for Section 199; Law and Explanation,” details the minimum audit checks IRS examiners are expected to complete when scrutinizing a corporation’s Sec.