The IRS Dismantles its Tiered Directive Program

The IRS Dismantles its Tiered Directive Program

From the “Dean of Taxation’s Lecture Hall” – for breaking tax news and updates from the Hill.

The IRS recently ended its tiered directive program (IRS – Tiered Issues Memorandum) which included several popular incentives aimed at bolstering the US economy including the R&D Tax Credit and the

Manufacturing Deduction. The Service will now turn over review of previously listed issues to the newly organized Issue Practice Groups (IPGs) and International Practice Networks (IPNs).

The new IPGs and IPNs are focused on building internal knowledge management that can deliver more decentralized technical advice to exam teams. The intentional integration of collaborative information sharing into the groups’ design is meant to ”balance the need for consistency with the recognition that there is no ‘one size fits all’ approach,” according to the directive. To that end, the directive says, all prior directives referencing tiered issues “are withdrawn and should no longer be consulted or followed,” and other internal guidance addressing the program (such as Internal Revenue Manual references) “are no longer valid.”

In effect, official guidance from the Tech Advisors issued in conjunction with the prior Tier I topics are not to be followed going forward. It remains unclear whether advise rendered on existing cases will be followed in resolving current exams, such as guidance on the R&D credit in the form of position papers and mandatory IDRs.

About the Author

Peter J. Scalise serves as the National Partner-in-Charge and the Federal Tax Practice Leader for Engineered Tax Services. Peter is also a highly distinguished and long standing member of both the Board of Directors and Board of Editors for The American Society of Tax Professionals and is the Founding President and Chairman of The Northeastern Region Tax Roundtable, an Operating Division of ASTP. Peter is a frequent keynote speaker for the AICPA, ABA, TEI & AIA on specialty tax incentives and legislative updates from the Hill.

How Recent Tax Extenders are Helping Real Estate Investors

How Recent Tax Extenders are Helping Real Estate Investors

C P A P R O S P E C T A C Q U I R E D $6 , 400  ,000 O F F I C E B U I L D I N G.

The owner did $800,000 in renovations, some which were energy efficient.

The tax benefit in additional one-year tax deductions for CPA’s newest client were:

Cost Segregation: $1,435,000
179D/Energy: $68,000
162 Retirement: $87,555
263a Repair & Maintenance: $288,127

For a total of benefit of: $1,878,682.00

The power of combining all the favorable tax incentives is powerful for property owners