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
commission percentage. The dealership may also receive income through retrospective agreements and/or reinsurance arrangements. Retrospective arrangements are "back ended" and are programs designed to allow the dealer to participate in the profitability of the insurance business. Reinsurance programs are alternatives to commission caps imposed and regulated by many states. Reinsurance is the transfer of risk from the primary insurance company to the reinsurance company that may be established by the dealer. Reinsurance arrangements were first used by dealerships for their sales of Credit Life and Disability Insurance as a way to increase their commissions above the state cap. However, reinsurance arrangements are frequently used now in connection with VSCs. 10-3
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- Page 45 and 46: dealerships use specific identifica
- Page 47 and 48: Chapter 7 LIFO Background Overview
- Page 49 and 50: A Short History of LIFO Application
- Page 51 and 52: improper inflation through unwarran
- Page 53 and 54: Introduction Chapter 8 Computing LI
- Page 55 and 56: The double extension index formula
- Page 57 and 58: as one item, there would probably n
- Page 59 and 60: (existing items) and non-comparable
- Page 61 and 62: The current-year costs that can be
- Page 63 and 64: Assuming the dealership elects LIFO
- Page 65 and 66: matching of revenues and costs. Thu
- Page 67 and 68: section 1.471-9. Both of these regu
- Page 69 and 70: providing to the credit subsidiary
- Page 71 and 72: Under elections made prior to Decem
- Page 73 and 74: Base Year Cost 9112 $224,000 You ha
- Page 75 and 76: BLS Sanity Check A simpler means to
- Page 77 and 78: CYC = Current Year Cost. This is th
- Page 79 and 80: Computation of 1993 Increment and R
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- Page 83 and 84: Specific Identification Increment M
- Page 85 and 86: which may be identified by a unique
- Page 87 and 88: Step # 3 For each item category, ad
- Page 89 and 90: Step # 10 Compute the total cost of
- Page 91 and 92: 1991 Inventory Value at Current Yea
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- Page 95: Dealers may offer the contracts as
- Page 99 and 100: 2. Principal/Obligor A principal is
- Page 101 and 102: Rev. Proc. 97-38 provided for an al
- Page 103 and 104: Contract Construction Generally, a
- Page 105 and 106: Rev. Proc. 97-27 provides the admin
- Page 107 and 108: The Court ruled that when the deale
- Page 109 and 110: Considerations for Forming a Produc
- Page 111 and 112: The Reinsurance Transaction To illu
- 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
- Page 119 and 120: 3. IRC section 845 tax avoidance 4.
- 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
- Page 131 and 132: Where a covenant may be enforced it
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- Page 135 and 136: 1. Spread income over a number of y
- Page 137 and 138: RELATED FINANCE COMPANY CHECKSHEET
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- Page 141 and 142: 3. Question the taxpayer directly w
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- Page 145 and 146: Technicalities Under the provisions
commission percentage. The dealership may also receive income through retrospective<br />
agreements and/or reinsurance arrangements.<br />
Retrospective arrangements are "back ended" and are programs designed to allow the dealer to<br />
participate in the profitability of the insurance business. Reinsurance programs are alternatives to<br />
commission caps imposed and regulated by many states. Reinsurance is the transfer of risk from<br />
the primary insurance company to the reinsurance company that may be established by the dealer.<br />
Reinsurance arrangements were first used by dealerships for their sales of Credit Life and<br />
Disability Insurance as a way to increase their commissions above the state cap. However,<br />
reinsurance arrangements are frequently used now in connection with VSCs.<br />
10-3
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