LIFO-PRO LIFO Training Materials
The primary reasons LIFO errors are so common:
- Errors resulting from the use of spreadsheets
- Lack of understanding of LIFO IRS Regulations and basic LIFO principles.
One of the reasons for the latter is the lack of adequate LIFO training and reference materials especially as it relates to the IPIC method. LIFO-PRO, Inc. has authored several LIFO training and reference guides to help companies and CPAs understand the existing LIFO Regulations. The LIFO guides include the benefit of our practical LIFO experience that is the by-product of our years of experience helping companies solve their LIFO challenges.
The LIFO guides written by LIFO-PRO, Inc. include
- Guide for Planning & Implementation of the IPIC LIFO Method -The advantages and disadvantages of this method are discussed. The cryptic IRS IPIC method Regs. including those for the 10% method are explained including illustrations of examples of calculations. This Guide describes ways in which companies have dealt with the challenges of sorting inventory balances by the required PPI or CPI category breakdowns and other planning ideas that we have seen in practice over the years. In addition to a generic guide, we also have written guides specifically for these retailers which address the unique challenges companies in these industries face with the IPIC method:
- Supermarket chains
- Department and discount store chains
- Convenience store chains
- LIFO Internal Control Guide -This was written to address the biggest concern companies have with the advent of Sarbanes Oxley requirements. This guide includes definition of LIFO terms and method alternatives and shows the steps required to calculate IPIC and non-IPIC pool indexes, LIFO reserves and LIFO layer histories. Many examples of LIFO calculation math and documentation are included.
- LIFO Resource Guide for CPAs -This was written for CPAs in public accounting to describe ways they can help their clients best address their LIFO needs including whether their clients would benefit from a different LIFO method and whether they have clients not using LIFO that could reduce their taxes by adopting LIFO.
These guides are provided to our clients at no charge and may be purchased by companies that are not clients.
In addition to the LIFO guides written by LIFO-PRO, Inc., there is a good general LIFO training guide authored by John Purtill entitled LIFO Inventory:Tax and Accounting Issues. The coverage of the IPIC method in this book is very brief but this covers non-IPIC LIFO issues in greater detail than the LIFO-PRO, Inc. guides. Information on this book is available at www.purtill.com.
Another book is The Income Taxation of Inventories under the Last-in, First-out Method by Charles Davenport and W. Eugene Seago. This book is quite lengthy and includes a lot of LIFO history and numerous citations of IRS Regs., Rev. Procs., Rev. Rulings, etc. Although this book includes more about the IPIC method than the Purtill book, the book was written before the new IPIC LIFO Regs. were published in 2002. This book is published by Mellen Press.
Federal Income Taxation of Inventories is a 3 volume, looseleaf treatise published by LexisNexis and authored by Leslie Schneider. This definitive work analyzes every aspect of inventory taxation, including valuation of goods, UNICAP rules and, LIFO inventories.
LIFO LOOKOUT is a quarterly publication that provides a comprehensive look at how current IRS rulings, audit developments and court decisions affect LIFO elections, computations and practices. Every issue contains a summary of the quarter's major developments. Detailed articles often include at a glance summaries, strategic planning observations and/or practice guides that can be readily applied. This is authored by Willard DeFilipps, the nations leading auto dealer expert.
A new book (as of July 2006) is the Tax Accounting Workbook entitled Inventory Tax Accounting and Uniform Capitalization which is part of the Tax Practice Series published by Thomson West and authored by W. Eugene Seago.