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
c. Amount of liquid assets and retained earnings. 9. Conclusion A balance sheet audit is valuable and necessary as it not only provides information for many possible issues, but also familiarizes the agent with the structure and nature of the taxpayer’s books and records which although somewhat standardized in the auto industry, always tends to differ from one taxpayer to the next. Reconciliation and scrutinization of large, unusual or questionable items is the key to an effective and efficient balance sheet audit. B-12
Appendix C Definition of an Item Coordinated Issue INDUSTRY SPECIALIZATION PROGRAM MOTOR VEHICLE INDUSTRY COORDINATED ISSUE July, 1989 DOLLAR-VALUE LIFO DEFINITION OF AN ITEM ISSUE Whether an item, for purposes of calculating the value of the taxpayer’s inventory under the dollar-value LIFO method as authorized by Treas. Reg. section 1.472-8, is defined by reference to a particular vehicle as to make, year, model, body style, standard equipment, options and other factors. FACTS Motor vehicles are manufactured with a wide variety of makes, models, body styles, colors and options. These factors are specified on the order prepared for each vehicle by a consumer, a dealer, a distributor, or the manufacturer. Additionally, each vehicle is designated as to its model year. Manufacturers have traditionally made annual changes to vehicles to enhance their marketability and to meet Federal and State requirements. These include interior and exterior trim, minor exterior body parts, major structural design and styling, drive train, and body family, or platform as it is called in the industry. These changes may or may not be directly reflected in the price of the vehicle. Trim changes usually occur every year and include the interior trim, exterior bumpers, paint, and front and rear styling. Minor changes to exterior body parts occur every 2 to 3 years and include fenders, hood, and trunk lid, but, not to any body structural part. A major change to structural design and styling may occur every 4 years and includes distinctive changes to exterior body parts which may change the dimensions of the vehicle, but not the drivetrain. Changes to the drivetrain occur every 2 to 3 years and include engine displacement, type of engine, transmission, and drive wheels. The change to the body family or platform occurs when an entirely new vehicle is designed and involves a design of most of the parts of a vehicle. The new vehicle may take over the name of a previous model or be given a new name. For 1988, there were 42 body families for domestic passenger cars, that included 254 different models. There were also 337 models of import passenger cars sold in the U.S.A. C-1
- 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
- Page 169 and 170: The transfer of the installment con
- 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
- Page 189 and 190: f. Dealer Reserve Holdbacks 3. Inve
- Page 191 and 192: Once the existence of a shareholder
- Page 193 and 194: Despite the fact the computation ma
- Page 195: corporate minutes if material. d. L
- Page 199 and 200: two cars of the same model can vary
- Page 201 and 202: Appendix D An Analysis of the Wrigh
- Page 203 and 204: (D) also moved (DLRS) income to be
- Page 205 and 206: The court did not allow (D)’s cla
- Page 207 and 208: Appendix E Glossary The following t
- Page 209 and 210: FIFO: An inventory cost flow assump
- Page 211: PLATFORM: A vehicle platform is the
c. Amount of liquid assets and retained earnings.<br />
9. Conclusion<br />
A balance sheet audit is valuable and necessary as it not only provides information for many<br />
possible issues, but also familiarizes the agent with the structure and nature of the taxpayer’s<br />
books and records which although somewhat standardized in the auto industry, always tends<br />
to differ from one taxpayer to the next. Reconciliation and scrutinization of large, unusual or<br />
questionable items is the key to an effective and efficient balance sheet audit.<br />
B-12
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