Classification of expenditures: IRS seeks to clarify INDOPCO
Article Abstract:
The IRS is analyzing practitioner comments on INDOPCO, Inc. v. Commissioner and capitalization of expenditures issues and is expected to release additional guidance in the near future. The regulations under IRC section 263 provide some guidance, but many taxpayers are still unsure whether expenses that involve some future benefit must be capitalized. Knowing whether tax treatment is influenced by whether the business is new or expanding would also be valuable. Some commentators are encouraging the IRS to provide safe harbors for certain types of expenses.
Publication Name: Taxes: The Tax Magazine
Subject: Business
ISSN: 0040-0181
Year: 1996
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Educational assistance programs need to be reexamined
Article Abstract:
IRC section 127's tax-favored treatment of employer-funded education assistance to employees was reinstated by the Small Business Job Protection Act of 1996, but limitations placed on the section will have implications for graduate study and tuition waiver programs. Employers and employees will only receive favorable tax treatment for graduate programs begun after June 1996 if the program is job-related. Tuition reduction or waiver programs offered by colleges and universities will also be affected by these limitations.
Publication Name: Taxes: The Tax Magazine
Subject: Business
ISSN: 0040-0181
Year: 1996
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Employer educational assistance programs: can the frustration of lapses in statutory authority be avoided?
Article Abstract:
Employers frustrated with the sporadic history of IRC section 127 but interested in providing educational benefits to employees may wish to structure their educational assistance program so that expenses qualify under other types of deductions and exclusions as well. Section 127 expired in 1995 and has yet to be reinstated as of April 1996, though it does have political support. Educational expenditures may also qualify as business expenses under section 162 or as scholarship expenses under section 117.
Publication Name: Taxes: The Tax Magazine
Subject: Business
ISSN: 0040-0181
Year: 1996
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