Rules for getting consent to change methods eased
Article Abstract:
The IRS has recently released two Procedures containing guidelines for taxpayers who wish to receive the Service's approval for their adoption of a different accounting method. Taxpayers with inventories should follow the steps specified in Revenue Procedure 92-74, IRB 1992-38, 16, while all other taxpayers should follow Rev Proc 92-75, IRB 1992-38, 22. Application for IRS consent to change methods under either procedures must be accompanied by the submission of Form 3115, Application for Change in Accounting Method, as well as written agreements to the conditions of the procedure used and to make the adjustments required by Section 481. Neither of the two Procedures, however, can be used by certain taxpayers, including financially troubled companies and taxpayers under criminal investigation.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1992
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Changes in individual retirement account rules made by TRA '86 amplified by IRS
Article Abstract:
According to the Tax Reform Act of 1986 and IRS Notice 87-16, an employee's gross income and status as an active participant in a qualified benefit plan must be taken into account when determining deductible IRA (individual retirement account) contributions. An individual can make a deductible contribution to an IRA of $2,000 or 100 percent of compensation (whichever is less), only if the individual is not an active participant in a retirement arrangement. The plans included under 'retirement arrangements' include: 401(a) qualified plans, 403(a) annuity plans; government plans, except for 457 deferred compensation plans; 403(b) annuity contracts; 408(k) simplified employee pensions; and 501(c)(18) trusts which meet creation date and vesting restrictions.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1987
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How the special rules for amortizing start-up expenses interact with other Code provisions
Article Abstract:
While Section 195 of the Internal Revenue Code may have been intended to clarify the treatment of start-up expenses through amortizing (or deducting) such expenses subject to capitalization, it appears that this section of the Code does not simplify such treatments without an added understanding of the elements included. An analysis of the appropriateness of losses deductible as investigatory expenses is provided. Section 195 eligibility requirements and expenses are described, trade or businesses defined, and the interaction of Sections 212 and 195 with the production of income expenses is discussed. Section 195 and Senate Committee Reports do not clarify or resolve the abandonment issue, nor do they distinguish between types of abandonment.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1986
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