Permission to change method revoked on audit of return

Article Abstract:

The IRS has reversed a previous decision permitting a company to change its accounting method to allow certain materials to be classified as supplies and incidental materials. The National Office of the IRS ruled that the company had erred when it claimed the cost of durable assets as incidental expenses since this went beyond the scope of the change of accounting method earlier approved. Interpreting Reg 1.162-3, the National Office rejected the company's argument that it could not return to its former method of accounting for the supplies.

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Stock sales to employees did not have to be reported

Article Abstract:

Corporations sponsoring an employee stock purchase plan (ESPP) are exempted from the filing requirements of Section 6039 when the share price of options bought under the ESPP is the same as the price of shares when the options were granted. The IRS has ruled that the sponsoring corporation is not bound to report ESPP stock sales to plan participants in such a case. This exception to the Section 6039 requirements was confirmed in Ltr Rul 9201031.

Taxation, Employee stock ownership plans

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