Friday, May 6, 2016

IRS Issues Guidance on Automatic Accounting Method Changes

The IRS has issued a series of automatic changes in accounting methods and accounting periods affecting a broad number of industries.
In Revenue Procedure 2016-29, released on May 5, the IRS provided an updated, consolidated list of the types of changes in methods of accounting for which taxpayers can get automatic consent.
Under the list of automatic changes, the agency addressed a number of areas including gross income under tax code Section 61, trade or business expenses under Section 162 and research and development expenditures under Section 174.
In the area of depreciation or amortization, the list included accounting for:
  • Sale, lease, or financing transactions
  • Tenant construction allowances;
  • Depreciation of leasehold improvements; and
  • Dispositions of tangible depreciable assets.
The revenue procedure is scheduled to be published May 23 in Internal Revenue Bulletin 2016-21.

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