It might not be a resounding victory for the profession, but it’s better than a resounding defeat.
For weeks now, tax preparers and their clients have raised their voices with the AICPA, the MACPA, and other state CPA societies in a deafening and unmistakable message to the IRS: Revamp the onerous and confusing tangible property regulations. In Maryland alone, the MACPA’s federal tax listserv has been swamped with messages from CPAs seeking answers to a seemingly unending series of frustrating questions.
The IRS apparently was listening.
IRS officials have released a new revenue procedure that eases the tangible property compliance burden for small businesses.
Specifically, the IRS document “allows small businesses to change a method of accounting under the final tangible property regulations on a prospective basis for the first taxable year beginning on or after Jan. 1, 2014,” the IRS states.
More important, the IRS is also “waiving the requirement to complete and file a Form 3115 for small business taxpayers that choose to use this simplified procedure for 2014.”
According to the Journal of Accountancy, the revenue procedure defines a small business “as one with total assets of less than $10 million on the first day of the tax year for which the accounting method change is effective or average annual gross receipts of $10 million or less for the prior three tax years.
“We are pleased to be able to offer this relief to small business owners and their tax preparers in time for them to take advantage of it on their 2014 return,” IRS Commissioner John Koskinen stated. “We carefully reviewed the comments we received and especially appreciate the valuable feedback provided by the professional tax community on this issue.”
The announcement was praised by the profession.
“The AICPA and the state CPA societies have made numerous requests on behalf of our members and their small business clients for this relief over several months,” AICPA President and CEO Barry Melancon said. “We appreciate that the IRS understood how burdensome the regulations are for small business and acted to provide relief for 2014 and future year tax returns.”
Will this do the trick? Time will tell. The announcement generated even more questions on the MACPA’s listserv, so all is not yet crystal clear.
But it’s a first step … and I believe in first steps.
More tangible property resources:
- Repair regulation relief: What does it really mean? (Not as much as you think)
- Opportunity or relief? A Rev. Proc. 2015-20 analysis
- AICPA resources: Tax treatment of expenditures related to tangible property
- FAQ: Forms 3115 and the new tangible property regulations
- IRS Rev. Proc. 2015-13
- IRS Rev. Proc. 2015-14
- The five actions for IRS tangible property ‘repair’ regulations
- It’s not too late to save tax via IRS tangible property regs
- IRS Form 3115: A sin and a travesty (from CPA Trendlines)