|
November 3, 2006
Re: In Depth Coverage of Tax Issues Discussed in the
“Update from the IRS” at
AICPA Dealership Conference in Phoenix
Dear Attendee:
In the “Update from the IRS”
session in Phoenix last week, Ms. Terri Harris, the IRS Motor Vehicle
Technical Advisor, had a very limited amount of time to talk about
several important tax audit issues and hot topics.
In her one-hour
presentation, Ms. Harris could only touch on the “highlights” of the
following areas.
· IRS Audit Activity -
Examinations, etc.
· Electronic Records
Retention Obligations
· Service Technicians’
Tool Programs
· Section 263A
Inventory Cost Capitalization Rules, with special emphasis on whether
auto dealerships should be treated as “retailers” or as “producers”
· Changes in the Form of
IRS Guidance … GLAMs, TAMs, etc.
Although Ms. Harris did spend a little
time discussing the alternative motor vehicle credit, she did not have
time during her presentation to get into any depth on the two important
the tax cases she mentioned … Tysinger Motors (a case involving
Form 8300 non-compliance penalties) and Dow Huffman (a case
involving the IRS questioning a dealership’s LIFO calculations and
requiring a change in accounting method under Section 481(a)).
Also, one of the questions that arose in
the brief Q & A session involved whether or not the improper handling of
trade discounts might jeopardize the LIFO election for an auto
dealership.
All of these areas are topics that have
been covered in significant detail in recent issues of our publications,
the Dealer Tax Watch and/or the LIFO Lookout. If you want
to have more technical background and explanation of the topics she
mentioned, this 150-page compilation of articles is available for $175
per copy.
The Table
of Contents for this Compilation is attached along with an
order form.
Sincerely,
Willard J. De Filipps, CPA
|
Contact Information