On June 9th, the Internal Revenue Service (hereinafter the “Service”) issued a revised Audit Technique Guide to assist examining agents in evaluating the validity of cost segregation studies submitted by taxpayers to substantiate accelerated depreciation deductions. These far reaching updates were needed due to the vast changes in the tax laws over recent years in connection to the Protecting Americans from Tax Hikes Act of 2015; the Tax Cuts and Jobs Act of 2017; the Coronavirus Aid, Relief, and Economic Security Act of 2020; the Consolidated Appropriations Act of 2020; and of course revised guidance based upon examining agents observations from recent cost segregation examinations on what is deemed acceptable qualitative and quantitative procedures in order to get to a tax return filing position per Circular 230. Just some of the many sweeping updates are in connection to I.R.C. § 263A, Change of Accounting Method, I.R.C. § 179 Deduction, I.R.C. § 179D Deduction, Bonus Depreciation, and Qualified Improvement Property.
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