IRS Provides Repair Regulation Relief for Small Businesses

Repair Regulation ReliefThe AICPA Tax Advocacy Team proudly announced to us about an hour ago that the IRS has released Rev. Proc. 2015-20, which permits small businesses to:

  • Change a method of accounting under the final tangible property regulations on a prospective basis, and
  • Avoid completing and filing a Form 3115.

The new simplified procedure is generally available to small businesses, including sole proprietors and real estate investors, with assets totaling less than $10 million or average annual gross receipts totaling $10 million or less.

The AICPA has unwaveringly advocated for this relief and commended the IRS and Treasury for providing welcomed simplification for small businesses.  This will substantially reduce the administrative burden and compliance costs for the majority of my clients this year.

I want to be clear that I continue to be concerned about compliance initiatives in this area.  Prospective means you must be in compliance with the regulations effective January 1, 2014.  The de minimis threshold remains at $500 ($5000 if you have audited financial statements) and elections will need to be made on your return in lieu of filing the Form 3115.

That being said, this was a big win for the AICPA and for taxpayers.  I am proud to be a member of the AICPA and to help support this organization.


Benjamin R. Podraza, CPA, MST, CGMA
February 13, 2015

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