IRS Issues LIFO Guidance following Miller & Chevalier IIR Request


In response to an Industry Issue Resolution (IIR) request submitted by Patricia Sweeney and Dwight Mersereau of Miller Chevalier Chartered and the National Auto Dealership Association (NADA), The Treasury Department and the Internal Revenue Service issued guidance today regarding the proper last-in, first-out (LIFO) inventory accounting treatment of automobiles, light-duty trucks, and crossover vehicles which have characteristics of both trucks and cars.
The guidance, published as Revenue Procedure 2008-23, recognized that the distinctions between cars and light-duty trucks have diminished significantly since the issue was last addressed in IRS guidance and by the Courts.  The IIR program was created by the IRS to resolve frequently disputed or burdensome tax issues that affect a significant number of business taxpayers through the issuance of guidance on those issues.   These new procedures provide a favorable simplified LIFO pooling method that will greatly reduce the tax accounting burden for distributors and retailers of new and used vehicles.

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