The IRS Streamlines The Methodology For Small Businesses To Comply With The Tangible Property Regulations

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Written by Peter J. Scalise | Posted in IRS • Small Business

On February 13 of 2015, The Internal Revenue Service (hereinafter the “Service”) streamlined the methodology for small business owners to comply with the Final Treasury Regulations (hereinafter the “regulations”) governing Tangible Property with newly released administrative authority.

Revenue Procedure 2015-20 permits small businesses to change a method of accounting under the regulations on a prospective basis for the first taxable year beginning on or after January 1 of 2014. Moreover, the Service is waiving the arduous requirement to file a Form 3115 entitled “Application for Change in Accounting Method” for small business taxpayers that choose to use this simplified procedure for 2014. Consequently, many small business taxpayers can now waive the filing of Form 3115 and adopt the regulations on a prospective basis. However, as a caveat, the Service indicated that taxpayers will not receive audit protection for prior open statute years.

As set forth under Revenue Procedure 2015-20, the new simplified procedure is generally available to small businesses, including sole proprietors, with assets totaling less than $10 million or average annual gross receipts totaling $10 million or less. For complete details, please consult Revenue Procedure 2015-20 which can be located and referenced at http://www.irs.gov/pub/irs-drop/rp-15-20.pdf

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Peter J. Scalise

Peter J. Scalise serves as the Federal Tax Credits & Incentives Practice Leader for Prager Metis CPAs, LLC a member of The Prager Metis International Group. Peter is a highly distinguished BIG 4 Alumni Tax Practice Leader and has approximately twenty years of progressive public accounting experience developing, managing and leading multi-million dollar tax advisory practices on both a regional and national level.

Peter is a highly acclaimed thought leader in the fields of accounting and taxation with deep subject matter expertise in connection to designing, implementing and defending sustainable methodologies for specialty tax incentives including, but not limited to, research tax incentives; orphan drug credits; therapeutic discovery credits; accounting methods and periods; energy tax incentives in connection to green building envelope efficiency and benchmarking, solar energy, bio energies, fuel cells, wind turbines, micro turbines, and geothermal systems; and comprehensive fixed asset analysis incorporating principles of construction tax planning, cost segregation analysis and the final treasury regulations governing tangible property.

Peter is a renowned keynote speaker and an extensively published author on specialty tax incentives, tax controversy matters, and legislative updates from Capitol Hill for NAREIT, AGRION, USGBC, AICPA, ASTP, NATP, ABA, AIA, and TEI. Peter serves as a member of the Tax Faculty for CPAacademy, iShade and TaxConnections University (“TCU”). Peter serves on both the Board of Directors and Board of Editors for The American Society of Tax Professionals (“ASTP”) and is the Founding President and Chairman of The Northeastern Region Tax Roundtable.