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IRS issues temporary regulations regarding tangible property

The Internal Revenue Service and Treasury Department recently published temporary regulations which provide guidance to Miami taxpayers on the treatment of tangible property. Tangible property is generally defined as physical property as opposed to incorporeal property such as patents and copyrights. The IRS issues regulations to provide legislative guidance regarding Internal Revenue Code provisions or to address issues that arise from the tax code. The release of new regulations is significant because taxpayers who may ignore newly released regulations run the risk of becoming embroiled in a civil tax controversy.

A Miami tax attorney can help individuals and businesses avoid audits and other tax issues by advising taxpayers of the impact of new regulations and how to best incorporate regulation changes into a comprehensive tax savings plan.

The temporary regulations released last week apply to expenditures made in 2012. The regulations specifically deal with the treatment of funds used to acquire, produce or improve tangible property. The regulations also deal with property that is subject to depreciation and how to account for such property and its disposition.

Additional guidance will be issued regarding how taxpayers can obtain automatic consent to change to the method of accounting described in the regulations. Automatic consent requests can be sent in starting with 2012 returns, but cannot be used for 2011 returns.

Individuals can also comment on the new temporary regulations, which serve as a notice of proposed rulemaking. A public hearing on the regulations will take place in April and written comments are due by Mar. 26, 2012.

Source: IRS, "IRS and Treasury Department Publish Temporary Regulations on Treatment of Tangible Property," IR-2011-126, Dec. 27, 2011

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