Tax News

CCH (cch.taxgroup.com) reports:

The Last-In, First-Out (LIFO) Inventory Valuation Method continues to be used effectively by many businesses of all sizes --from small, closely held operations to large, publicly held enterprises. CCH Tax and Accounting has scheduled a two-hour audio seminar, LIFO: Concepts, Applications and Opportunities (PART 1) , that will focus on background and perspective for the use of LIFO and the requirements that taxpayers must satisfy in order to use LIFO. Presented by leading LIFO expert, Willard J. De Filipps, CPA, this seminar will be held on Thursday, July 26 beginning at 1 p.m. Eastern; noon Central. The seminar is Part 1 of a comprehensive three-part LIFO series.
Mr. De Filipps will provide a practical review of LIFO fundamentals, including eligibility requirements, financial statement conformity, consent requirements, documentation and recordkeeping, and much more. Professionals in public practice and in industry will benefit from this presentation and will gain a solid understanding of the basics of the LIFO inventory valuation method. The presentation time will include an opportunity to present questions to Mr. De Filipps.
Program topics include:
Background and Perspective
--LIFO overview: The basics in plain English;
--What is LIFO and what makes the LIFO method attractive;
--All you need to know about LIFO... On one page;
--Basic considerations in electing LIFO;
--Eligibility requirements vs. computational alternatives;
--Practicality: assumptions, risks and costs; and
--Coordinating LIFO with business agreements, bonuses, other documents, etc.
Cost Eligibility Requirement
--Inventory on LIFO must be at cost;
--Adjusting opening inventories where inventory has not been carried at cost;
--Form 970 questions highlighting cost requirement;
--What about parts inventories using replacement cost; and
--Other special situations.
Financial Statement Conformity Requirement
--Code and regulations prescribe conformity for tax purposes;
--GAAP and its interplay with the technical "conformity" requirements;
--Interim Financial Statements;
--Application of conformity requirement to unusual situations;
--Issuing financial statements before the LIFO computations can be completed; and
--Form 970 questions highlighting the conformity requirement.
Consent Requirement
--Just what is being "consented to";
--Form 970 must be filed for initial LIFO election year; and
--What if Form 970 is not filed or not filed on time.
Form 970: Proper Completion of the LIFO Election Form
--Attachments to Form 970 to complete disclosures, and
--A "pro forma" filing package for the first year.
Books and Records
--What "books and records" must be maintained to support a LIFO election;
--Rev. Proc. 98-25: IRS requirements for electronic recordkeeping;
--Audit issues when the taxpayer does not have adequate books and records; and
--The LIFO User's Bill of Rights: Rev. Proc. 79-23.
The learning objectives for this seminar are:
--Gain a comprehensive awareness of what LIFO is and the potential advantages it offers businesses;
--Understand the eligibility, cost and consent requirements for LIFO and how to properly complete the LIFO Election Form 970; and
--Know what books and records must be maintained to support a LIFO election.
About the Three-Part LIFO Series:
--Part 1 (scheduled for July 26, 2007) will focus on background and perspective for the use of LIFO and the requirements that taxpayers must satisfy in order to use LIFO.
--Part 2 (scheduled for September 13, 2007) will address the various methods available to taxpayers to choose from in setting out how they will approach their LIFO calculations. These methods will be discussed in detail and practical suggestions will be provided concerning which methods are relatively more attractive in certain situations and which methods should be avoided at all cost.
--Part 3 (scheduled for October 18, 2007) will address other areas not covered in Parts 1 and 2. These will include a discussion of the importance of understanding, reconciling and projecting LIFO reserve changes, typical IRS LIFO inventory audit issues, terminations of LIFO elections and other situations where LIFO reserves may be recaptured.
Registration can be completed online at https://www.krm.com/cch or by calling 1-800-775-7654. Participants can receive two hours of CPE credit. Each site that registers for this seminar will also receive an issue of CCH's Taxes: The Tax Magazine .