An accrual-method taxpayer could reduce gross receipts by the estimated future cost of fuel reward redemptions in the tax year that the customer earns those rewards.
A taxpayer’s long-term construction contracts requiring grading and soil compaction qualify for the completed-contract method of accounting.
The IRS is permitting some taxpayers to use a safe-harbor method of accounting for determining whether expenditures paid or incurred to remodel are deductible or must be capitalized.
A new safe harbor allows retail and restaurant taxpayers to deduct 75% of qualifying expenditures for remodeling qualified buildings and capitalize just 25%.
The IRS issued Rev. Proc. 2015-12 to provide guidance and several safe-harbor methods of accounting for cable system operators that provide video, high-speed internet, and voice-over-internet-protocol (VoIP) phone services through a "cable network."
In determining whether a contract qualifies as a home construction contract, taxpayers may include costs attributable to common improvements and development of infrastructure in the estimated costs. However, the IRS and taxpayers have long disagreed as to whether these costs are included in the tests for determining the date a contract is complete.