What Form 4797 Tangible 2024-2025

Good morning and welcome to the middle of tax season. This tax season is unique, and not in a good way. Nina Olson, the National Taxpayer Advocate, stated that this would be the worst tax season in 30 years. She pointed out issues like foreign reporting, the implementation of the ACA, and the repair regulations. However, on Friday the 13th, the IRS provided relief from the repair regulations through a revenue procedure. Immediately, half of all practitioners were happy, while the other half were upset. The former were happy because they no longer had to file numerous 3115 forms for small businesses that didn't understand why they were being filed. The latter group had spent a significant amount of time researching the repair regulations and the 3115 form, expecting to bill clients for the additional work. It seems like both sides may have overreacted a bit. So, what really happened? In 2014, new repair regulations were implemented, changing the way taxpayers treat expenditures and materials and supplies. Additionally, regulations were introduced regarding dispositions of fixed assets. Surprisingly, the IRS allowed for partial dispositions, which had never been seen before. More recently, the IRS issued guidance on implementing these regulations, causing a panic among taxpayers and practitioners. The regulations were retroactive, meaning taxpayers would have to file a 3115 form for any depreciable assets, repair expenses, or materials and supplies. Many commentators stated that all businesses, regardless of size, would need to file a 3115 form. However, on Friday the 13th, the IRS issued Revenue Procedure 2015-20, which provided relief to small businesses. The new guidance allowed small businesses to make the changes on a prospective basis, without retroactive adjustments or the need for a 3115 form. However, the definition of a small business is important. It includes businesses with less...