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Update Regarding the Tangible Property Regulations

Update: The IRS issued Revenue Procedure 2015-20 0n Friday, February 13, effective for tax years beginning on or after January 1, 2014, that provide a “small business exception” for taxpayers to adopt the tangible property regulations without the filing of Form 3115, (Application for Change in Accounting Method), if a set of conditions are met.

Each separate and distinct trade or business (the most important requirement is that the activity maintains a complete and separable set of books and records, meaning the activity qualifies for its own methods of accounting on their own), qualifies for the small business exception if at least one of the following conditions is met:

The activity has total assets of less than $10 million as of, or after January 1, 2014.
Average annual gross receipts of $10 million or less for the prior three taxable years.

Taxpayers who use the small business exception will forfeit certain benefits that are only available to those who file Form 3115 for their first tax year beginning on or after January 1, 2014. Before your 2014 income tax return is filed, you must decide whether to apply the small business exception or file Form 3115 . […]

By Linkenheimer LLP|2020-09-03T20:05:31+00:00February 24th, 2015|Tangible Property Regulations|0 Comments

Beware: IRS Scams in Full Swing

Does the above email look familiar? Hope not, because what might look like a legit email from the IRS is nothing more than another phishing attempt by people looking to collect personal information, credit cards and more. The emails contain what may appear to be an IRS email address, along with their logo (easily found online), but the fact is, you will never receive an email like this. The IRS isn’t in the business of sending emails. In the past, some people have also received phone calls from “the IRS” saying they owe back taxes and if they don’t provide a credit card or wire transfer, the police will be called to seize property. These fraudulent “IRS agents” tend to have heavy accents, blocked numbers and attempt to instill fear in those they speak to, in exchange for credit cards, bank account numbers and other information. Once again, that isn’t how the IRS operates. And should you ever receive an email or a call like that, disregard. If you are convinced it’s legit, call your Linkenheimer CPA and we will work with you to resolve any confusion.

By Linkenheimer LLP|2020-09-03T20:05:32+00:00February 17th, 2015|fraud, irs|0 Comments

Tangible Property Regulations That Will Effect Every Business and Property Owner

Deducting and capitalizing business expenses under final regs

An important development this year will affect every business, including yours. The IRS has issued long-awaited regs on the tax treatment of amounts paid to acquire, produce, or improve tangible property. The regs explain when those payments can be deducted, which confers an immediate tax benefit, and when they must be capitalized.

These final regs retain many provisions of the temporary regs that were issued in 2011. However, the final regs refine and simplify the temporary regs and add new safe harbor provisions that will help you to nail down expense deductions.

The regs must be followed for tax years that begin after Dec. 31, 2013 – whether a calendar year or a fiscal year, such as a fiscal year beginning July 1, 2014. Taxpayers have the option of applying the final regs retroactively to the 2012 and 2013 tax years. There’s also a third option to apply the temporary regs to the 2012 and 2013 tax years.

The regs are lengthy and complex. The summary below is intended to give an overview of how they treat issues of deduction and capitalization. We would be happy to […]

By Linkenheimer LLP|2020-09-03T20:05:32+00:00February 12th, 2015|Tangible Property Regulations|0 Comments

Avoiding the 6-year Statute of Limitation

Many taxpayers are unaware that the normal statute of limitation that generally requires the IRS to assess tax within three years after taxpayers file their returns can be extended to six years if an item omitted from a tax return is more than 25% of gross income. For more information or questions, contact your Linkenheimer CPA.

By Linkenheimer LLP|2015-02-04T19:00:38+00:00February 4th, 2015|irs|0 Comments

Fewer IRS Audits Predicted for 2015

In an email to employees, IRS Commissioner John Koskinen said the IRS will not be able to close as many audits in 2015 due to the agency’s budget cuts. With a reduction in enforcement personnel (they announced a hiring freeze in December), he indicated that there will likely be at least 46,000 fewer individual and business audit closures and more than 280,000 fewer collections from automated notices or field revenue agents. Additionally, two furlough days for IRS employees in 2015 may be planned. Furthermore, aging information technology systems will not be replaced, which could delay new taxpayer protections against identity theft. This announcement comes on the heels of a budget reduction for the agency of $346 million during the remaining nine months of the fiscal year ending 9/30/15, which, according to the Commissioner, is the lowest funding since 2008.

By Linkenheimer LLP|2020-09-03T20:05:33+00:00January 29th, 2015|audit, irs|0 Comments