IR-2007-39, Feb. 22, 2007
WASHINGTON —   The Internal Revenue Service and the Treasury Department today announced that they will work to publish guidance for automobile wholesalers, manufacturers and dealers regarding the proper treatment of the dollar-value, last-in, first out (LIFO) inventory method for pooling purposes of crossover vehicles, which have characteristics of trucks and cars.
“The accounting issue confronting the automobile industry has been selected for the Industry Issue Resolution (IIR) Program, which provides guidance to help clarify complex tax issues. This program can provide a greater level of certainty for taxpayers, which is important in today's environment," said Large and Midsize Business Commissioner Deborah M. Nolan. "By following the guidance in the IIR, taxpayers can avoid time consuming audits on this issue."
Federal courts in the 1980’s ruled that the LIFO pooling rules require taxpayers to account for cars and trucks in different pools. Since these rulings were handed down, the line between trucks and cars offered for sale has blurred.
Crossover vehicles include sport-utility vehicles, minivans, and pick-up trucks used as substitutes for cars, and it is not clear how they should be treated for LIFO purposes. A request for guidance was submitted by the law firm of Miller & Chevalier Chartered and the National Automobile Dealers Assn. (NADA) on behalf of the automotive industry to resolve the issue arising from vehicles that do not fit clearly into either a car or a truck pool.
Since its inception in 2000, the IIR program has resulted in resolution of many different tax issues cumulatively affecting thousands of taxpayers in many different lines of business. For each issue selected, a multi-functional team gathers and analyzes the relevant facts and recommends guidance.
At any time, business associations and taxpayers may submit tax issues that they believe could be resolved through the IIR program. IIR project selection criteria and submission procedures are outlined in Revenue Procedure 2003-36, which is available on the IRS Web site at IRS.gov. The IRS reviews submissions at least semi-annually with the next review to be completed by March 31, 2007
Attached is detailed information regarding the issues the IRS considered during its latest review of IIR submissions.
 

ISSUES SUBMISSIONS FOR THE IIR PROGRAM REVIEWED - SELECTED AS A 2006 IIR PROJECT


Motor Vehicle Industry
			 


Issue Description:  Clarification of LIFO Pools for Automotive Wholesalers, Manufacturers, and Dealers
 
IRS Contact:
David Horton
			Director of Field Operations, HMT West
			Heavy Manufacturing and Transportation
 
Phone #   313-234-1340


Submitted by: Miller & Chevalier Chartered and NADA on behlf of the automotive industry.
 
 

 
 

ISSUES SUBMISSIONS FOR THE IIR PROGRAM REVIEWED - NOT SELECTED AS A 2006 IIR PROJECT


 


Motor Vehicle Industry


 


 


Issue Description: Application of IRC 263A for Franchised Automobile and Truck Dealers


Submitted by:  Crowe, Chizak & Co., LLC,  on behalf of NADA


 


Trucking Industry


 


 


Issue Description: Taxable Gross Weight of Truck


Submitted by:  Penske Truck Leasing Co., LP


 


Cross Industry


 


 


Issue Description: Electronically Filed W-2 Deadline


Submitted by:  National Payroll Consortium, Inc.


 


Issue Description:  Medical Insurance Paid by S-Corp for Greater than 2% Shareholder


Submitted by:  Christine Zinkand, self


 


Issue Description:  Separate Tax Identification from SSN


Submitted by: Luis A. Marhado, self


 


Issue Description: Business Reporting of Payments Made to Service Providers


Submitted by: Terry Hamilton, self


 


Issue Description: Royalty Payments and IRC 263A


Submitted by: Freed, Maxick, and Battaglia, PC


 

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