IRS Extends UNICAP Audit Suspension Period

The Internal Revenue Service has issued a field directive that states:

(i) the IRS Office of Chief Counsel is currently considering publishing additional guidance on dealership uniform capitalization (UNICAP) issues, and

(ii) the IRS will extend the current audit suspension period on new UNICAP audits (which was scheduled to expire on December 31, 2010) until the date the pending guidance is published in the Internal Revenue Bulletin.

This announcement follows several recent meetings between NADA and senior IRS and Treasury officials in which NADA has urged the IRS to reconsider its application of the complex UNICAP rules to franchised car and truck dealers. The announcement ensures that dealers will have the opportunity to review any forthcoming UNICAP guidance from the IRS before having to decide whether and how to change their inventory methods of accounting.

The IRS announcement is available here.

GCADA will continue to update its members with new information as it becomes available. If you have any questions, please call us at 440.746.1500.