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Industry Issue Resolution (IIR) Cheryl P Claybough Director PFTG May 2012 May 2012.

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Presentation on theme: "Industry Issue Resolution (IIR) Cheryl P Claybough Director PFTG May 2012 May 2012."— Presentation transcript:

1 Industry Issue Resolution (IIR) Cheryl P Claybough Director PFTG May 2012 May 2012

2 2 IIR Program - Rev Proc 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 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 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 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 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 and Rev. Proc  Telecom Network Assets- submitted Feb 2010 for clarification of telecom network assets to be capitalized vs. expensed resulted in issuance of Rev. Proc  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 and Rev. Proc

7 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 to hedging of guarantees under variable products.  Conclusive Presumption of Worthlessness Whether Reg (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 8 IIR Questions?  All guidance is posted on IRS.gov  Refer to Rev. Proc for IIR application process  Refer to IIR page on IRS.gov  Melanie Perrin, Senior Program Analyst ( )  Maria Dolan, Program Manager ( )


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