IRS Issues New Industry Guidelines
The IRS has announced tax guidance on three issues affecting auto dealerships, banks, and golf courses. The guidance on these issues marks the first use of a new Industry Issue Resolution Program (IIR) aimed at establishing consistent IRS positions on complicated or controversial tax issues.
- Revenue Procedure 2001-56 provides optional simplified methods for determining the value of the use of demonstration automobiles provided to employees by automobile dealerships.
- Revenue Ruling 2001-59 provides clarification of the necessary steps to record a loan as a "loan asset" under the bad debt conformity method of accounting for banks.
- Revenue Ruling 2001-60 allows certain golf course land improvement costs to be depreciated.
The resolutions to the three issues covered in these pronouncements were developed by teams of IRS, Chief Counsel, Appeals, and Treasury Department representatives with input from taxpayer groups.
"This milestone in the IIR process represents a significant step toward providing timely published guidance on issues affecting a large number of taxpayers," said Larry Langdon, Commissioner of the IRS's Large and Mid-Size Business Operating Division.
It is anticipated that the IIR program will help reduce costs and other burdens for both taxpayers and the IRS by eliminating uncertainties involving tax treatment of certain issues.