The Internal Revenue Service and the Treasury Department announced that they will work on creating detailed LIFO guidance for automobile wholesalers, manufacturers and dealers.The accounting issue confronting the automobile industry -- which involves the proper treatment of the dollar-value, last-in, first out inventory method for pooling purposes of “crossover vehicles,” which have characteristics of both trucks and cars -- was selected for the Industry Issue Resolution Program, which provides guidance to help clarify complex tax issues
In the 1980s, federal courts 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.
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