For a lessor, the general rules for defining a unit of property for purposes of applying the tangible property regulations are applied to leased property Any past amounts incurred and capitalized for tenant improvements should be analyzed for incorrect accounting methods
or possible recharacterization as a repair.
Further, since taxpayers adopt accounting methods
on a trade or business basis (see Regs.
See Chapter 10 for a discussion of permitted accounting methods
2008-52 relating to the automatic consent procedures by which taxpayers may obtain the IRS Commissioner's consent to make changes in accounting methods
that are described in the revenue procedure's appendix.
Thus, debt contracts give borrowers an incentive to change accounting methods
only if the voluntary accounting method
changes affect contract calculations.
The new accounting method
allows the limited partnership -- and by extension, Life Partners -- to record the life settlements at their cost.
The revenue procedures generally set rules for obtaining automatic consent to change to those accounting methods
provided in the repair regulations.
These revenue procedures encourage taxpayers to adopt permissible accounting methods
and correct impermissible methods.
NYSE:BBW), an interactive, entertainment retailer of customized stuffed animals, announced that it is reviewing its lease related accounting methods
That is, accounting methods
generally result from temporary (not permanent) differences to lifetime income, and these differences reverse in the succeeding tax year or years.
The taxpayers disagreed with this adjustment and asked the Tax Court for relief, arguing that they had not changed accounting methods
but instead had made a mathematical error.
On May 15, 1998, the Internal Revenue Service released Notice 9831, which contains a draft of a proposed revenue procedure that, when promulgated, will govern changes in accounting methods
initiated by the IRS under the authority of section 446(b) of the Internal Revenue Code.
Fannie Mae (1) applied accounting methods
and practices that do not comply with GAAP in accounting for the enterprise's derivatives transactions and hedging activities, (2) employed an improper 'cookie jar' reserve in accounting for amortization of deferred price adjustments under GAAP, (3) tolerated related internal control deficiencies, (4) in at least one instance deferred expenses apparently to achieve bonus compensation targets, and (5) maintained a corporate culture that emphasized stable earnings at the expense of accurate financial disclosures.
A taxpayer's accounting methods
determine the time for reporting income and expenses.
Likewise, the court ignored the company's change in accounting methods
since the new revenue ruling had mandated it.