Overview
IRS Issues Final Regulations on Cost Allocations: Today, the Treasury Department and the IRS published final regulations on allocating costs to certain property produced or acquired for resale by a taxpayer under section 263A. The regulations provide a new consistency requirement for taxpayers that can include negative adjustments in additional section 263A costs to remove section 471 costs. The regulations finalize, with changes, proposed regulations published in 2012. An accompanying revenue procedure, Revenue Procedure 2018-56, provides the procedures by which a taxpayer may obtain automatic consent to change to the methods of accounting described in these regulations.
TIGTA Finds IRS Did Not Always Take Action to Protect Taxpayers Subject to Data Breaches: Today, the Treasury Inspector General for Tax Administration (TIGTA) issued a report finding that the IRS did not always take action to prevent fraudulent returns from being filed with social security numbers stolen in external security breaches. TIGTA recommended that the IRS always add social security numbers associated with data breaches to a tracking list to allow detection of potential identity theft returns filed using those numbers.
IRS Reminds Taxpayers Like-Kind Exchanges Are Now Limited to Real Property: Today, the IRS issued a reminder to taxpayers that like-kind exchanges are generally now limited to exchanges of real property held for use in a trade or business or investment. As a result of changes from the Tax Cuts and Jobs Act, exchanges of personal or intangible property such as machinery, equipment, vehicles, artwork, collectibles, patents, and other intellectual property no longer qualify for like-kind exchange treatment as of the beginning of this year. However, certain exchanges of mutual ditch, reservoir, or irrigation stock are still eligible.
OECD and Argentina Work to Tackle Tax Crime: Last week, the inaugural “VAT/GST Fraud Investigations” course was held at the OECD Latin America Academy for Tax and Financial Crime Investigation in Buenos Aires. The course explored the threats and risk assessment around various types of VAT/GST fraud, investigative techniques and their challenges and best practices, asset seizures and the money laundering issues associated with VAT/GST fraud, as well as prosecution challenges and best practices.