Auto Dealerships - Audit Technique Guide - Uncle Fed's Tax*Board
Auto Dealerships - Audit Technique Guide - Uncle Fed's Tax*Board Auto Dealerships - Audit Technique Guide - Uncle Fed's Tax*Board
18. If so, does the agreement state how he discount rate was determined? 19. Does the discount rate approximate the actual loss experience? 20. Are the finance contracts non-recourse? 21. Does the RFC handle repossessions? 22. Does the dealership sell any finance contracts to unrelated finance companies? 23. Does the RFC report income on a pro-rata basis? 24. Did the profit reported on the initial sale of the vehicle exceed the loss on the sale of the finance contract? 25. Does the RFC have a business purpose? 26. Did the RFC investigate items such as the borrower’s credit history, length of the note, age of the vehicle, and payment history prior to determining FMV of the note? Conclusion An adjustment is appropriate where the note is not discounted at fair market value to a "controlled financier" or where the Related Finance Company arrangement is an economic sham. If such is the case, then adjustments should be made to assign income to the proper year it was incurred in connection with the rules aforementioned. See MSSP Used Car Audit Techniques Guide (ATG) for additional discussion of Related Finance Company Issues. 16-5
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- Page 87 and 88: Step # 3 For each item category, ad
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- Page 99 and 100: 2. Principal/Obligor A principal is
- Page 101 and 102: Rev. Proc. 97-38 provided for an al
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- Page 105 and 106: Rev. Proc. 97-27 provides the admin
- Page 107 and 108: The Court ruled that when the deale
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- Page 113 and 114: insurance contract reinsured throug
- Page 115 and 116: (1979). The Service’s position is
- Page 117 and 118: While not all captive situations in
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- Page 121 and 122: section, seemingly compliant arrang
- Page 123 and 124: 2. By owner A dealer may own dealer
- Page 125 and 126: Rules and Regulations Many rules re
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- Page 129 and 130: One of the assets specifically iden
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- Page 135 and 136: 1. Spread income over a number of y
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- Page 145 and 146: Technicalities Under the provisions
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- Page 149 and 150: Cash 300 Accounts Receivable 300 2.
- Page 151 and 152: The dealer sells the note to a fina
- Page 153 and 154: For purposes of this rule, an "empl
- Page 155 and 156: 10) relationship of stockholder-off
- Page 157 and 158: purely for services. See Treas. Reg
- Page 159 and 160: Howard Sole, Inc. v. Commissioner,
- Page 161 and 162: Milford Motor Co. v. United States,
- Page 163 and 164: new pool for additional, subsequent
- Page 165 and 166: 6. The finance company is entitled
- Page 167 and 168: when the back-end distributions are
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- Page 171 and 172: Report as a Loan or an Assignment
- Page 173 and 174: Reported as a Sale… (How it Shoul
- Page 175 and 176: Other Sources of Information IRC se
- Page 177 and 178: Part 4 Appendices Appendix A Initia
- Page 179 and 180: 2) Adjusting Journal Entries 3) Tax
- Page 181 and 182: k. Do you receive rebates from anyo
- Page 183 and 184: f. Employee Benefits 1) Form 5500?
- Page 185 and 186: Appendix B Balance Sheet Section -
- Page 187 and 188: . Dealership financing If the deale
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