The new separate line of business regulations

Article Abstract:

The Tax Reform Act of 1986 made rules governing qualified pension plans stricter while allowing employers to declare separate lines of business where appropriate. The new rules define separate lines of business very specifically to prevent abuse of the system and discrimination against pensioned employees, but employers with similar products but different end-users may be unfairly limited. The IRS will have to determine over time whether the rules are too strict or too lax in preventing abuse of the pension tax system.

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The separate line of business regulations revisited

Article Abstract:

The separate line of business rules for qualified benefit plans as revised by IRC section 414(r) give businesses more flexibility but still require extensive record keeping. A separate line of business must have a separate management and workforce, keep its own financial records and must be organized as a separate unit. An upstream business is only considered separate if it has competition and sells at least 25% of its products directly to customers.

United States

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Revenue procedure 92-20: the stick replaces the carrot

Article Abstract:

The IRS issued revenue procedure 92-20 on Mar 3, 1992, to establish its new methods of approving accounting change requests and the penalities involved. This procedure is important because many taxpayers have not yet changed from accounting methods disallowed in the Tax Reform Act of 1986. However, the procedure is long and complicated, and implements a fee charge for approving the requests which may be exceeding IRS authority.

Tax accounting

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