AICPA: Tangible Property Rules Too Complex, Unfair for Smaller Taxpayer

For over 50 years, Bloomberg BNA’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...

IRS's new rules on the capitalization of tangible property rely too heavily on a “facts and circumstances” approach and contain too few bright-line tests to aid taxpayers in a complex area, the American Institute of Certified Public Accountants tells the agency in a letter. In addition, the group says, IRS's approach to a de minimis rule discriminates against smaller taxpayers. The comments come as IRS continues to field concerns on the comprehensive proposed and temporary rules the agency unveiled in December. The guidance addresses whether taxpayers must capitalize their tangible property costs under tax code Section 263(a) or can deduct them under Section 162(a).