A consistent mistake on a tax return for more than two years may require an accounting method change to correct. The IRS has procedures for making these elections, which generally require a timely filed tax return. But what if you miss the filing deadline–are you out of luck? Private Letter Ruling (“PLR”) 201850013 provides the…
Category: Accounting Method
Accounting Method
Get help with selecting an accounting method for your business that aligns with your business goals and complies with IRS regulations. Give us a call to see how we can help, (713) 909-4906.
IRS Audit Adjustments That Change Accounting Methods
Given the potential for the adjustments to trigger extremely large tax liabilities, accounting method changes made by the IRS on audit can be doomsday scenarios for unwary taxpayers. In Nebeker v. Commissioner, T.C. Memo. 2016-155, the court addressed a common situation where the IRS makes an adjustment on audit that is an accounting method, but…
Income Tax Consequences for Gift Cards
Gift cards remain a popular offering, with sales exceeding $200 billion annually. But when must retailers recognize income from gift card sales for tax purposes? Can related deductions be taken immediately, or only as gift cards are redeemed over time? Get it wrong, and businesses face cash flow headaches or penalties. The IRS Office of…
Late Section 475(f) Election and Section 9100 Relief
Those who are traders in securities or commodities can make a mark-to-market election. This election can allow the trader to immediately deduct losses each year and avoid the wash sale rules. But many traders do not know about this election and only learn of it after it is too late to benefit from it. Even…