Washington (Aug. 2, 2004) —Tax issues confronting the banking and heavy equipment distributor industries have been selected for the Internal Revenue Service’s Industry Issue Resolution Program, which reviews complex business tax issues to provide consistency and clarity for affected taxpayers.
The banking industry issue involves how lending institutions should determine interest income on “non-performing” loans. There are different book and tax accounting standards for when a loan becomes “non-performing” for purposes of determining interest accruals.
The heavy equipment distributor industry issue involves the valuation of parts inventory. Inventory valuation is a factor that determines the cost of goods sold. The IRS and the industry will seek to determine a valuation method that reduces burden and provides certainty and consistency for affected taxpayers.
"The IIR program provides clarity and consistency to complex tax issues, while reducing the burden for taxpayers,” said Large and Midsize Business Division commissioner Deborah M. Nolan. “These are issues that can be resolved up front for all affected taxpayers so that they do not become contested issues downstream during tax audits on a case-by-case basis.”
— WebCPA staff
