rfassett

This was posted on the PICPA list serv this morning: FYI AICPA Addresses Primary Concerns Surrounding Implementation of Tangible Property "Repair" Regulations We are reaching out to members to address issues and concerns with the tangible property "repair" regulations. Over the last few weeks, we have heard from an unprecedented number of members with questions, concerns and requests for resources. The two biggest questions we are hearing are: Will the IRS be issuing guidance or relief? What should we do right now? What is the Status of IRS Guidance or Relief? We understand that the IRS and Treasury are considering our recommendations to provide relief from the reporting requirements related to the repair regulations. We are hopeful they will release some form of relief for small businesses in the next couple of weeks. We understand that time is of the essence. If any relief is granted or if the IRS releases additional information, we will notify members immediately. Our advocacy efforts on this issue date back to the release of the proposed regulations. Since that time, the AICPA Tax Executive Committee and the Tax Methods and Periods Technical Resource Panel have continued to provide comments and feedback to Treasury and the IRS to express our concerns about the administrative burdens associated with the regulations and request relief on behalf of members and small businesses. We have asked for the following forms of relief: • Make Form 3115, as well as the section 481 adjustment, optional. • Allow for the adoption of a “cut-off method” and apply the rules prospectively. • Accept a statement in lieu of Form 3115 to acknowledge compliance with the regulations. • Raise the de minimis safe harbor from $500 to $2,500. What Should We Do Right Now? We find ourselves in a challenging predicament. On the one hand, we are hopeful that the IRS will issue relief which would ease the burden for small businesses. On the other hand, there is no guarantee that relief will come in time (if at all). As we move further into tax season, tensions continue to mount as rumors spread regarding what the IRS may or may not provide in terms of guidance, relief, support or enforcement. We have heard that many practitioners are deferring the preparation of Form 3115 in anticipation of possible relief. For members struggling with the question of what to do right now, there are only two options to consider: • Option 1: Continue under current rules and adapt if/when the IRS issues relief. The risk with this option is that work performed today may need to be revised or may prove obsolete. So, members who choose this option should consider their capacity to perform work that ultimately may not be necessary and potentially not billable. • Option 2: Temporarily suspend all related work in hopes of near-term the IRS relief. The risk with this option is that the IRS may not issue relief at all. So, members who choose this option should consider their broader workload and that certain returns may need to be extended. We cannot formally advise members to disregard existing law and regulations and simply not comply. Ultimately, firms must make an informed decision based on their unique circumstances, client mix, and resources. Please visit our Tangible Property Resources page for the latest information and resources. We recommend you bookmark this page and visit it often, as we will continue to update this page as new information and resources become available. Members have asked for a sample Form 3115, however the applicability of the regulations vary so widely that a single illustrative example would offer limited value. We are working to compile a list of resources available online from a variety of sources, both for free and for sale, to provide members with a one-stop resource for guidance, tools, and practice aids related to understanding and complying with the repair regulations. Related articles from the Journal of Accountancy and the Tax Adviser: Final Guidance Related to Tangible Property Regulations Provides Time-Limited Opportunities (02/01/2015) Taxpayers will want to determine how the new rules provided in the regulations may affect their current methods of grouping assets and recovery of basis upon disposition of property and then determine which changes require a Form 3115 under the revenue procedure or an election.

Yep - that was the line. The song is named "Bullets" - written and performed by Bob Schneider. Maybe we could contract him to write one called...............................................well, none of those words have the same kind of zing as "Bullets". Again - how lame is that? :)

Yep - been using it for several years. Quality product at a fair price. We do about 30 live payrolls; another 50 to 60 after the fact payrolls; and about 100 monthly and quarterly write-ups with the package. I will be happy to answer any of your questions.

He can do that. That activity code is for the activity for the business being reported on that year's return. Beyond changing the code on the return, no further IRS permission or notification is necessary.

And throw in some "ordinary and necessary" and we can have a party! How lame is that?

The hour is getting late but my forward brain is telling me that the $200 is for materials and supplies; whereas the $500 is for repairs and improvements, assuming applicable financial statements are not in play. If they are, then that number is $5,000. And for the record, that should be where our angst is anchored. What's fair about that? A company gets a bump of $4,500 on the safe harbor front simply because its has audited financial statements? (Note: there are other applicable financial statements such as those prepared to satisfy a government requirement; and others.) I have quite a few client's that could stand to have the higher threshold - but they are punished because they do not need audited statements? When did the IRS start basing regs on the form of book reporting? Oh wait, I know. With these stupid regs. Enough of that! Good night!

I have been ignored at far lesser folks!

Operate word here is "may". Conversely, may not - depending on the circumstances.

Lion - I appreciate your insight. But as to the hefty user fee - that is one of the scare tactics being floated around. Agreed, this is A year where there will be no fee for the scope involved; however, there is no guarantee that the fee will be imposed next year. Q. I have heard about a $7,000 user fee. What is that? A. The $7,000 user fee applies to a taxpayer seeking non-automatic consent for an accounting method change. The 3115’s required to comply with the TPRs generally receive automatic consent without a user fee, BUT after 2014 there will be cases where an automatic method change may not be available because of “scope limitations.” Through 2014, the IRS has waived all normal scope limitations to accommodate compliance with the TPRs. For example, one scope limitation allows for only one accounting method change every five years. In another case, scope limitations limit certain taxpayers with Section 263A (self-constructed assets) method changes to non-automatic consent. Through 2014, all taxpayers will be given automatic consent in spite of these limitations. After 2014, these scope limitations will again be applicable, and changing method of accounting may require a $7,000 fee. So if my client has not requested a change of accounting methods in the last five years, and needs to make one next year, assuming all other scope issues are met, the user fee would not apply. At least that is my reading. And by the same token, the thought just occurred to me, if I rush to file unnecessary 3115s this year, what happens next year or the next when my client needs to make a real change in accounting methods. Am I subjecting him to that $7,000 user fee because we filed a 3115 in 2014 and he is filing one again within the five year scope limitation? I don't know the answer to that. But I think it needs to be considered. Margaret - this will teach you to forget to attach an election. Look at the can of worms you have opened.

Sorry for the confusion Margaret. I know you had no 3115 issue. I should have used that quote thingie because my response was mostly to another post or two on this thread. The tag I hung on my post about you stands. I do not think you even need to be concerned with the election. To the extent that your guy basically uses up most all of his "supplies" on a per job basis, those are just cost of goods sold and he falls way, way below the criteria that would throw him into the 263A unicap rules. I just do not see a need to file the election. My point is, I think you are fine without it. That said, there is no harm in filing it, I guess. But I would not lose any sleep over missing the filing of this one.

OK - first there are no easy answers to most of the questions and no easy summary. However, being a KISS type of guy, I always, always try to bring things down to their simplest element. MY understanding - none of this applies to COGS. Section 263 deals with capitalizing all kinds of things IF your client fits the criteria to have to abide by those rules. Just a WAG, most of us do not have many clients in that boat. So what is this all about and when is a 3115 required and what is the trigger point. It, according to my understanding, and you all can feel free to correct my understanding, is required when the taxpayer has not been in compliance with the regs as they are stated now going back retroactively to when the proposed regs were issued, or something like that. So if your client should have reported depreciation in one manner but did not, to become compliant, a change in accounting method is required, and consequently, a Form 3115. As I am thinking this through, ALL of my write-up clients, because we make the decisions (with their approval) , have been and continue to be compliant and we will not be filing 3115s for any of those. All of our other clients with depreciable assets will have to be analyzed on an individual basis to determine if the decisions they have made over the years has them in compliance with the regs. The elections that are being talked about are "safe-harbor" elections about prospective activity. By definition, safe-harbor means that if you do what you are suppose to in that harbor, no further questions will be made. By making the elections, your client is stating that he is going to remain in compliance with the rules inside of that harbor. Should he venture outside of the harbor, he does so at his own risk. I know this sounds simplistic, and these rules are anything but simple, but those are the basic rules as I understand them. In the words of one much greater than myself, we have nothing to fear but fear itself. Margaret, I do not think you need to do anything with your present situation. Matter of fact, you may already be guilty of over-kill.

Reminds me of a scholarship credit that was floated here in PA a few years back for Corporate entities making scholarship contributions. S-Corps squawked that they wanted some of the pie too and now we have the Individual Tax department at the State involved. They did not have a clue. I had two S-Corps that got involved. After the first year I told them that if they did that again, they would have someone else doing their work. I spent countless hours on the phone trying to educate the Individual Tax Department. The credit carried over for five years. It was not until the fourth year that any mention of the credit appeared on the PA40. It was an absolute disaster. And I do not know how you fared, but my entire efforts, beyond the prep fee, were gratis. How do you bill the client for the State's ineptness?

OK - new day, new attitude and clarification. I may have misled when I stated that 75 - 80% of my clients have a 3115 issue. I should have made it more clear that those all need to be analyzed and elections filed. I am NOT filing 3115s for all of them. Some probably, most NO. Still - extra time is needed for the analysis, etc. Enough of that. I completed two returns at home last night - and this is a brand new day. To work, to work. Aaaannndddddd, I whistle while I work, do, do, do, do, do, do, do...................................... Goal for today: 7 completed!

We had a two hour delay today - ice all around But I have learned to take a minimum of 20 hours of work home with me every night - just in case you, Catherine, would move into my area and bring all of your snow with you. (We only have about 34 inches on the ground right now.) But at the pace I am moving, even if I spent 3 hours working at home at night, I seem to still bring 19 hours of work back to the office every morning. Something just is not clicking.

I just did a head count and I have 70 returns in house waiting for me to start. And they are coming in at an average pace of 10 -12 per day. So far today, I have finished two. I need to find another gear here somewhere. I am thinking I must be clinically depressed because about 75 - 80% of my returns will have a 3115 issue. Extending is not an option because I sure the heck do not want to be messing with those all summer long. Yeah - clinically depressed - that's my problem. I think I will go dodge some traffic and try to get the mail. Hey! Maybe there will be some more returns in the mail. Hahahahahahahaha!!!!!!!!!!!!!!!!!!!!!

http://www.parkerbrosmemorial.com/book-of-memories/2032473/Mohan-June/obituary.php

The distribution only affects the basis - inside and outside. (Partners can and usually do have both an inside and an outside basis. The $500 distribution would reduce his basis. It would not flow to anywhere on the 1040. Since the partnership is dissolved you will need to calculate gain or loss of the partnership interest.

The one that I have done so far, the client owed $5 back. I doubt you can get much closer that that.

Naveen reported on another thread in response to an inquiry from Tom that his (Naveen) wife passed away on January 21st. Naveen - you will continue to be in my prayers. I cry for and with you in this, your hour of need. Know that we, in this community, feel your pain. May the God of all creation, continue to hold you in the palm of His hand - and may you sense His love in every breath that you take and every step that you make every step of the way! God bless, my friend!

In addition to the spot on answer above, I would simply ask if the monies were spent personally; or did he have an entity set up that the money was being funded through? It would make a difference in the answer.

Right on - ROLLOVE!!! That's what I'm talking about!

The 1099G worksheet - box 1 "Unemployment compensation"; box 1a "Amount repaid". I believe the fact that it was prior year benefit being repaid is irrelevant. If it shows on the 2014 1099G it was repaid in 2014.

According to another article, HRB did not respond to an email seeking comment. Very wise - recognizing that it could happen to any company in this day and age.

Yep http://www.usatoday.com/story/money/personalfinance/2015/02/06/turbotax-state-filings-halted/22979519/ Oh, boo hoo........

http://www.startribune.com/politics/statelocal/291008561.html The issue is not just limited to Minnesota.