There is a big controversy in the tax preparation world right now concerning anybody who runs a business or has property for rent (which is a lot of people). IRS has changed the rules about how repairs should be deducted. Anybody who owns business property is required to comply with the new rules going forward - which includes folks with rentals or business vehicles, and also corporations with desks and equipment. The point is that these new rules apply to a TON of people and businesses, and they ALL have to comply.
But here is the controversy: Since the rules are new, complying with the them means a change in the way we account for these costs, known as a 'CHANGE OF ACCOUNTING METHOD' and that it requires PERMISSION. The permission will be granted automatically, but it still has to be requested by filing a complicated Form 3115 - Change of Accounting Method. If all this holds up, this will mean a huge number of hours for tax preparers, and thus a significant increase the fees charged to their clients.
So (a) we have to comply, but (b) we have to ask permission to comply. This is so obviously absurd that it shouldn't even be taken seriously, right? But the frightening thing is that all the bright CPAs and tax lawyers AND the bright lights at IRS seem to be agreeing this is exactly what we have to do. Or they are saying that they aren't quite sure, but that we had better file the forms just to protect our clients from potential penalties and ourselves from malpractice claims.
I'll keep you posted.
Sheesh!
Randy
But here is the controversy: Since the rules are new, complying with the them means a change in the way we account for these costs, known as a 'CHANGE OF ACCOUNTING METHOD' and that it requires PERMISSION. The permission will be granted automatically, but it still has to be requested by filing a complicated Form 3115 - Change of Accounting Method. If all this holds up, this will mean a huge number of hours for tax preparers, and thus a significant increase the fees charged to their clients.
So (a) we have to comply, but (b) we have to ask permission to comply. This is so obviously absurd that it shouldn't even be taken seriously, right? But the frightening thing is that all the bright CPAs and tax lawyers AND the bright lights at IRS seem to be agreeing this is exactly what we have to do. Or they are saying that they aren't quite sure, but that we had better file the forms just to protect our clients from potential penalties and ourselves from malpractice claims.
I'll keep you posted.
Sheesh!
Randy
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