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Mike DiSabatino CPA

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IRS Eases Tangible Property Regs!

IRS Eases Tangible Property Regs!

IRS Announces Change In Implementation Of Tangible Property Regs For Small Businesses

The IRS has reacted to the complaints of the small business community and today issued Revenue Procedure 2015-20 outlining a simplified procedure for small businesses to comply with the final tangible property regulations. The simplified procedure is available beginning with the 2014 return taxpayers are filling out this tax season.

The new procedure:

  • allows small businesses to change a method of accounting under the final tangible property regulations on a prospective basis for the first taxable year beginning on or after Jan. 1, 2014; and
  • waives the requirement to complete and file a Form 3115 for small business taxpayers that choose to use this simplified procedure for 2014.

 “We are pleased to be able to offer this relief to small business owners and their tax preparers in time for them to take advantage of it on their 2014 return,” said IRS Commissioner John Koskinen. “We carefully reviewed the comments we received and especially appreciate the valuable feedback provided by the professional tax community on this issue.”

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.  A copy of Revenue Procedure 2015-20 is PDF is available HERE.

Please note:  the revenue procedure also requests comments on whether the $500 safe-harbor threshold should be raised for businesses that choose to deduct, rather than capitalize, certain capital expenses. We will continue to monitor this process.

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