By Patrick Temple-West

WASHINGTON (Reuters) - In a win for companies ranging from energy utilities to casinos, the U. S. Internal Revenue Service on Friday released new rules that broaden the kinds of business expenditures that can be treated as deductible asset repairs.

The difference between a deductible repair and a non-deductible improvement to "tangible property" has historically been a point of frequent dispute between the IRS and companies.

In more than 220 pages, the IRS has now finalized rules effective January 1, 2014, making more costs deductible, including for instance, new laptop computers worth less than $5,000.

"Safe harbors have been expanded and clarified giving taxpayers that meet those safe harbors significant relief," said Brandon Carlton, an accountant with Big Four firm Ernst & Young.

Some corporate tax audits involving disputes with the IRS over the tax-deductibility of repairs have been in limbo pending the final rules. Now some audits can be resumed with the rules finalized, said Eric Lucas, a principal at KPMG LLP and a former Treasury Department tax counsel.

Companies including Alliant Energy Corp, Boyd Gaming Corp, Hyatt Hotels Corp and NiSource Inc earlier this year said their tax bills could change as a result of the final rules, according to their annual U. S. Securities and Exchange Commission filings.

"There has been a lot of controversy on this issue," Lucas said.

A spokesman for Alliant said on Friday the company is evaluating the final rules.

In 2005, FedEx Corp successfully challenged the IRS over deducting the cost removing aircraft engines for repairs. The U. S. Court of Appeals for the Sixth Circuit affirmed that FedEx could deduct the engine repair costs and the package-delivery company was awarded a $66.5 million tax refund.

In addition to Friday's rules, the IRS has said it is separately working on repair rules for three specific industry sectors: cable networks, natural gas firms and retailers.

The IRS on Friday re-proposed some tangible property rules for further comment and set a public hearing for December 19.

(Editing by Kevin Drawbaugh and Bob Burgdorfer)

About News.net

Publishing Services International Limited (PSIL) is the publisher and operator of a worldwide network of online news sites dedicated to delivering fair, accurate and relevant reporting from a variety of the world’s most trusted sources – from the biggest cities to the smallest towns.

We deliver positive and powerful messages to our readers, providing up‑to‑the‑second news that matters to the individual.

Our promise is to serve communities and individuals worldwide, delivering information that hasn’t always been available to them. We will give them back a voice – a voice that’s empowering because it is theirs – and provide a platform to communicate between themselves and the world.

We believe people are not just generic demographics; they are individuals with their own preferences and curiosities. We are about understanding these individuals, listening to them, and serving them.

We are the new pioneering spirit of news – we’re not talking to everyone, we’re talking with every one.

If you want your news, your voice, your way, on your time – we’ve got news for you.

 

FAQs

Email

If you have any questions or concerns please email us on support@news.net

Phone

  • Australia, Toll Free 1-800-983-421
  • Hong Kong, Toll Free 800-906-187
  • Singapore, Toll Free 800-852-3871
  • USA/Canada, Toll Free 1-800-830-4132

Advertise With Us

Interested in being awesome?
Contact us by email or phone.

Cancel