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Industry Issue Resolution (IIR)

Industry Issue Resolution (IIR). Cheryl P Claybough Director PFTG May 2012. IIR Program - Rev Proc 2003-36. The program goals are to: Address frequently disputed or burdensome business tax issues that affect a significant number of taxpayers.

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Industry Issue Resolution (IIR)

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  1. Industry Issue Resolution (IIR) Cheryl P ClayboughDirector PFTG May 2012

  2. IIR Program - Rev Proc 2003-36 The program goals are to: • Address frequently disputed or burdensome business tax issues that affect a significant number of taxpayers. • Provide clear guidance to reduce the time and resources associated with resolving issues during tax examinations. The IIR process includes the following: • Issue Submission and Selection, • Planning, Analysis and Development, and • Resolution and Guidance.

  3. IIR Submission Taxpayers, associations, and others can submit an issue anytime: • Not required to be in a particular format. • Should include: - Issue statement and description of why the issue is appropriate for the Program, - Explanation of the need for guidance and estimated number of taxpayers affected, and - Name and telephone number of a person to contact if additional information is needed. • May include a recommendation as to how the issue could be resolved.

  4. Issues Appropriate for IIR Issue should have two or more of the following attributes: • Uncertain tax treatment of common factual situation, • Uncertainty results in frequent, repetitive exam of the same issue, • Uncertainty results in taxpayer burden, • Significant and impacts a large number of taxpayers, or • Extensive factual development, understanding of industry practices and views would assist the Service in determining the proper tax treatment.

  5. Issues Not Appropriate for IIR Generally, issues not appropriate for the IIR program include: • Issues unique to one or a small number of taxpayers. • Issues primarily under the jurisdiction of the Operating Divisions of the Service other than the LB&I and SB/SE Divisions. • Issues that involve transactions that lack a bona fide business purpose, or transactions with a significant purpose of improperly reducing or avoiding federal taxes. • Issues involving transfer pricing or international tax treaties.

  6. Recently Completed IIRs IIRs recently submitted and completed include: • Telecom Class Life for Wireless Assets- submitted Aug 2009 for clarification of class life for wireless telecom assets resulted in issuance of Rev. Proc. 2011-22 and Rev. Proc. 2011-28. • Telecom Network Assets- submitted Feb 2010 for clarification of telecom network assets to be capitalized vs. expensed resulted in issuance of Rev. Proc. 2011-27. • Unit of Property – Utility Transmission & Distribution- submitted Apr 2010 for clarification of utility transmission and distribution assets to be capitalized vs. expensed resulted in issuance of Rev. Proc. 2011-42 and Rev. Proc. 2011-43.

  7. IIRs in Process • Unit of Property – Electric Power Generation Determination of power generation assets to be capitalized under section 263 vs. expensed under section 162. • Unit of Property – Cable Determination of cable industry network assets to be capitalized under section 263 vs. expensed under section 162. • The Life Insurance Variable Rate Annuities Hedging Application of regulation 1.446-4 to hedging of guarantees under variable products. • Conclusive Presumption of WorthlessnessWhether Reg. 1.166-2(d) applies to insurance companies as “other regulated corporations”. • Unit of Property – Natural Gas Determination of distribution pipeline assets to be capitalized under section 263 vs. expensed under section 162.

  8. IIR Questions? • All guidance is posted on IRS.gov • Refer to Rev. Proc. 2003-36 for IIR application process • Refer to IIR page on IRS.gov • Melanie Perrin, Senior Program Analyst (202-283-8408) • Maria Dolan, Program Manager (813-367-8475)

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