Tangible Property Accounting Rules Too Burdensome, Witnesses Tell IRS

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Proposed and temporary regulations (REG-168745-03, T.D. 9564) on accounting for tangible property are too burdensome and will make compliance difficult for both large and small businesses, witnesses tell IRS at a hearing. The hearing comes as IRS continues to field concerns on the guidance the agency unveiled in December. The rules address whether taxpayers must capitalize their tangible property costs under tax code Section 263(a) or can deduct them under Section 162(a). Testimony at the hearing focuses on several difficulties in the regulations, with the most prominent area of concern being a de minimis rule.

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