Member Poll - Tangible Property Regulations - Safe Harbor
Safe Harbor for Small Businesses
Many practitioners have voiced concerns that the $500 de minimis safe harbor threshold (TD 9636) for immediate deduction of tangible property is too low for small business taxpayers.
However, the regulations provide a higher threshold ($5,000) for taxpayers with an audited financial statement if they have an accounting policy (a written accounting policy for the $5,000 threshold) which allows such expensing.
The IRS established the lower threshold for unaudited taxpayers because it does not have sufficient assurance that they are following the required accounting polices and “accordingly, that the taxpayer is using a reasonable, consistent methodology that clearly reflects its income.”
The AICPA is gathering information from members to achieve a solution that can ease taxpayer compliance and address the IRS’ concerns. We would greatly appreciate your help by answering the following questions: