Dollar-Value LIFO Regulations: Inventory Price Index Computation (IPIC) Method Pools, 85450-85455 [2016-28375]
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Federal Register / Vol. 81, No. 228 / Monday, November 28, 2016 / Proposed Rules
with the Accomplishment Instructions of
Boeing Alert Service Bulletin B787–81205–
SB290031–00, Issue 001, dated March 25,
2016. If any cracking is found, before further
flight, replace the RAT forward support
fitting with a new fitting, in accordance with
the Accomplishment Instructions of Boeing
Alert Service Bulletin B787–81205–
SB290031–00, Issue 001, dated March 25,
2016.
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(h) Credit for Previous Actions
This paragraph provides credit for the
actions specified in paragraph (g) of this AD,
if those actions were performed before the
effective date of this AD using the service
information specified in paragraphs (h)(1),
(h)(2), (h)(3), or (h)(4) of this AD.
(1) Boeing Message TBC–ANA–15–0272–
01B, dated September 22, 2015.
(2) Boeing Message TBC–ANZ–15–0016–
06B, dated October 14, 2015.
(3) Boeing Message TBC–CAL–15–0089–
01B, dated September 22, 2015.
(4) Boeing Message TBC–VAA–15–0089–
01B dated September 22, 2015.
(i) Alternative Methods of Compliance
(AMOCs)
(1) The Manager, Seattle Aircraft
Certification Office (ACO), FAA, has the
authority to approve AMOCs for this AD, if
requested using the procedures found in 14
CFR 39.19. In accordance with 14 CFR 39.19,
send your request to your principal inspector
or local Flight Standards District Office, as
appropriate. If sending information directly
to the manager of the ACO, send it to the
attention of the person identified in
paragraph (j)(1) of this AD. Information may
be emailed to: 9-ANM-Seattle-ACO-AMOCRequests@faa.gov.
(2) Before using any approved AMOC,
notify your appropriate principal inspector,
or lacking a principal inspector, the manager
of the local flight standards district office/
certificate holding district office.
(3) An AMOC that provides an acceptable
level of safety may be used for any repair,
modification, or alteration required by this
AD if it is approved by the Boeing
Commercial Airplanes Organization
Designation Authorization (ODA) that has
been authorized by the Manager, Seattle
ACO, to make those findings. To be
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deviation, or alteration deviation must meet
the certification basis of the airplane, and the
approval must specifically refer to this AD.
(4) For service information that contains
steps that are labeled as Required for
Compliance (RC), the provisions of
paragraphs (i)(4)(i) and (i)(4)(ii) of this AD
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(i) The steps labeled as RC, including
substeps under an RC step and any figures
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substeps and identified figures.
(ii) Steps not labeled as RC may be
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or inspection program without obtaining
approval of an AMOC, provided the RC steps,
including substeps and identified figures, can
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still be done as specified, and the airplane
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(j) Related Information
(1) For more information about this AD,
contact Kelly McGuckin, Aerospace
Engineer, Systems and Equipment Branch,
ANM–130S, FAA, Seattle ACO, 1601 Lind
Avenue SW., Renton, WA 98057–3356;
phone: 425–917–6490; fax: 425–917–6590;
email: kelly.mcguckin@faa.gov.
(2) For service information identified in
this AD, contact Boeing Commercial
Airplanes, Attention: Contractual & Data
Services (C&DS), 2600 Westminster Blvd.,
MC 110–SK57, Seal Beach, CA 90740;
telephone 562–797–1717; Internet https://
www.myboeingfleet.com. You may view this
referenced service information at the FAA,
Transport Airplane Directorate, 1601 Lind
Avenue SW., Renton, WA. For information
on the availability of this material at the
FAA, call 425–227–1221.
Issued in Renton, Washington, on
November 2, 2016.
Michael Kaszycki,
Acting Manager, Transport Airplane
Directorate, Aircraft Certification Service.
[FR Doc. 2016–27308 Filed 11–25–16; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG–125946–10]
RIN 1545–BJ66
Dollar-Value LIFO Regulations:
Inventory Price Index Computation
(IPIC) Method Pools
Internal Revenue Service (IRS),
Treasury.
ACTION: Notice of proposed rulemaking.
AGENCY:
This document contains
proposed regulations that relate to the
establishment of dollar-value last-in,
first-out (LIFO) inventory pools by
certain taxpayers that use the inventory
price index computation (IPIC) pooling
method. The proposed regulations
provide rules regarding the proper
pooling of manufactured or processed
goods and wholesale or retail (resale)
goods. The proposed regulations would
affect taxpayers who use the IPIC
pooling method and whose inventory
for a trade or business consists of
manufactured or processed goods and
resale goods.
DATES: Comments and requests for a
public hearing must be received by
February 27, 2017.
ADDRESSES: Send submissions to:
CC:PA:LPD:PR (REG–125946–10), Room
5205, Internal Revenue Service, PO Box
SUMMARY:
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7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be hand
delivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to: CC:PA:LPD:PR (REG–125946–10),
Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue NW.,
Washington, DC, or sent electronically
via the Federal eRulemaking Portal at
https://www.regulations.gov/ (IRS REG–
125946–10).
FOR FURTHER INFORMATION CONTACT:
Concerning the proposed regulations,
Natasha M. Mulleneaux, (202) 317–
7007; concerning submission of
comments and requests for a public
hearing, Regina Johnson, (202) 317–
6901 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
Section 472 of the Internal Revenue
Code permits a taxpayer to account for
inventories using the LIFO method of
accounting. The LIFO method of
accounting for goods treats inventories
on hand at the end of the year as
consisting first of inventory on hand at
the beginning of the year and then of
inventories acquired during the year.
Section 1.472–8(a) of the Income Tax
Regulations (26 CFR part 1) provides
that any taxpayer may elect to
determine the cost of its LIFO
inventories using the dollar-value
method, provided such method is used
consistently and clearly reflects income.
The dollar-value method of valuing
LIFO inventories is a method of
determining cost by using ‘‘base-year’’
cost expressed in terms of total dollars
rather than the quantity and price of
specific goods as the unit of
measurement. The ‘‘base-year’’ cost is
the aggregate of the cost (determined as
of the beginning of the tax year for
which the LIFO method is first adopted)
of all items in a pool.
Pooling is central to the operation of
the dollar-value LIFO method. Pooling
requires costs related to different
inventory products to be grouped into
one or more inventory pools. To
determine whether there is an
increment or liquidation in a pool for a
particular taxable year, the end of the
year inventory of the pool expressed in
terms of base-year cost is compared with
the beginning of the year inventory of
the pool expressed in terms of base-year
cost. The regulations prescribe rules for
determining whether the number and
composition of the pools used by the
taxpayer are appropriate. The rules vary
depending upon whether the taxpayer is
engaged in the activity of manufacturing
or processing or the activity of
wholesaling or retailing.
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Federal Register / Vol. 81, No. 228 / Monday, November 28, 2016 / Proposed Rules
The general pooling rules applicable
to dollar-value LIFO taxpayers are in
§ 1.472–8(b) and (c). These paragraphs
provide separate pooling principles for
taxpayers engaged in the manufacturing
or processing of goods (§ 1.472–8(b)),
and for taxpayers engaged in the
wholesaling or retailing of goods
purchased from others (§ 1.472–8(c)).
Section 1.472–8(b)(1) requires a
manufacturer or processor to establish
one pool for each natural business unit
(natural business unit pooling method)
unless the manufacturer or processor
elects under § 1.472–8(b)(3) to establish
multiple pools. Further, § 1.472–8(b)(2)
provides that where a manufacturer or
processor is also engaged in the
wholesaling or retailing of goods
purchased from others, the wholesaling
or retailing operations with respect to
such purchased goods shall not be
considered a part of any manufacturing
or processing unit. Additionally,
§ 1.472–8(b)(1) requires that where the
manufacturer or processor is also
engaged in the wholesaling or retailing
of goods purchased from others, any
pooling of the LIFO inventory of such
purchased goods for wholesaling and
retailing operations shall be determined
in accordance with § 1.472–8(c).
In Amity Leather Products Co. v.
Commissioner, 82 T.C. 726 (1984), the
Tax Court considered whether a
taxpayer that used the natural business
unit pooling method was subject to the
separate pooling requirements by virtue
of being both a manufacturer and a
wholesaler or retailer of merchandise.
The court concluded that requiring
separate inventory accounting for the
two functions was reasonable and held
that, where the taxpayer manufactured
goods and regularly purchased identical
goods from a subsidiary for resale, it
was required to maintain separate pools
for manufactured and purchased
inventory.
A manufacturer or processor using the
natural business unit pooling method
may elect to use the multiple pooling
method described in § 1.472–8(b)(3) for
inventory items that are not within a
natural business unit. Alternatively, a
manufacturer or processor that does not
use the natural business unit pooling
method may elect to use the multiple
pooling method. Under the multiple
pooling method, generally each pool
should consist of a group of inventory
items that are substantially similar.
Thus, raw materials that are
substantially similar should be pooled
together. Similarly, finished goods and
goods-in-process should be placed in
pools classified by major classes or
types of goods.
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Section 1.472–8(c)(1) requires
wholesalers, retailer, jobbers, and
distributors to establish inventory pools
by major lines, types, or classes of
goods. Mirroring § 1.472–8(b)(1),
§ 1.472–8(c)(1) requires that where a
wholesaler or retailer is also engaged in
the manufacturing or processing of
goods, the pooling of the LIFO inventory
for the manufacturing or processing
operations must be determined in
accordance with § 1.472–8(b).
In general, any taxpayer that elects to
use the dollar-value LIFO method to
value LIFO inventories may elect to use
the IPIC method to compute the baseyear cost and determine the LIFO value
of a dollar-value pool for a trade or
business. A taxpayer that elects to use
the IPIC method of determining the
value of a dollar-value LIFO pool for a
trade or business may also elect to
establish dollar-value pools, for those
items accounted for using the IPIC
method, using the IPIC pooling method
provided in § 1.472–8(b)(4) and (c)(2).
Section 1.472–8(b)(4) governs the
application of the IPIC pooling method
to manufacturers and processors that
elect to use the IPIC method for a trade
or business. Section 1.472–8(c)(2)
governs the application of the IPIC
pooling method to wholesalers,
retailers, jobbers, and distributors that
elect to use the IPIC method for a trade
or business.
For manufacturers and processors
using the IPIC pooling method under
§ 1.472–8(b)(4), pools may be
established for those items accounted
for using the IPIC method based on the
2-digit commodity codes (that is, major
commodity groups) in Table 9 (formerly
Table 6) of the Producer Price Index
Detailed Report (PPI Detailed Report),
which is published monthly by the
United States Bureau of Labor Statistics
(BLS). A taxpayer establishing IPIC
pools under § 1.472–8(b)(4) may
combine IPIC pools that comprise less
than 5 percent of the total inventory
value of all dollar-value pools to form a
single miscellaneous IPIC pool. If the
resulting miscellaneous IPIC pool is less
than 5 percent of the total inventory
value of all dollar-value pools, the
taxpayer may combine the
miscellaneous IPIC pool with its largest
IPIC pool.
For retailers using the IPIC pooling
method under § 1.472–8(c)(2), pools
may be established for those purchased
items accounted for using the IPIC
method based on either the general
expenditure categories (that is, major
groups) in Table 3 of the Consumer
Price Index Detailed Report (CPI
Detailed Report), published monthly by
BLS, or the 2-digit commodity codes
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(that is, major commodity groups) in
Table 9 of the PPI Detailed Report. For
wholesalers, jobbers, or distributors
using the IPIC pooling method under
§ 1.472–8(c)(2), pools may be
established for those items accounted
for using the IPIC method based on the
2-digit commodity codes in Table 9 of
the PPI Detailed Report. A taxpayer
establishing IPIC pools under § 1.472–
8(c)(2) may combine pools that
comprise less than 5 percent of the total
inventory value of all dollar-value pools
to form a single miscellaneous IPIC
pool. If the resulting miscellaneous IPIC
pool is less than 5 percent of the total
inventory value of all dollar-value
pools, the taxpayer may combine the
miscellaneous IPIC pool with its largest
IPIC pool.
Each of the 5-percent rules provided
in § 1.472–8(b)(4) or (c)(2) is a method
of accounting. Thus, a taxpayer may not
change to, or cease using either 5percent rule without obtaining the prior
consent of the Commissioner. Whether
a specific IPIC pool or the miscellaneous
IPIC pool satisfies the applicable 5percent rule must be determined in the
year of adoption or year of change
(whichever is applicable) and
redetermined every third taxable year.
Any change in pooling required or
permitted under a 5-percent rule is also
a change in method of accounting. A
taxpayer must secure the consent of the
Commissioner before combining or
separating pools. The general
procedures under section 446(e) and
§ 1.446–1(e) that a taxpayer must follow
to obtain the consent of the
Commissioner to change a method of
accounting for federal income tax
purposes are contained in Rev. Proc.
2015–13, 2015–5 I.R.B. 419 (or its
successors), as modified by Rev. Proc.
2015–33, 2015–24 I.R.B. 1067. See
§ 601.601(d)(2)(ii)(b).
The general pooling rules of § 1.472–
8(b) and (c) provide that where a
taxpayer is engaged in both a
manufacturing or processing activity
and a wholesaling or retailing activity,
separate pooling rules apply to the
separate activities, and goods purchased
for resale may not be included in the
same pool as manufactured or
purchased goods. On the other hand, the
IPIC pooling rules address
circumstances where a trade or business
consists entirely of a manufacturing,
processing, retailing, or wholesaling
activity. The Treasury Department and
the IRS have become aware of confusion
concerning how the IPIC pooling rules
apply where a taxpayer is engaged in
both a manufacturing or processing
activity and a wholesaling or retailing
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Federal Register / Vol. 81, No. 228 / Monday, November 28, 2016 / Proposed Rules
activity. Accordingly, these proposed
regulations address this issue.
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Explanation of Provisions
Changes to IPIC Pooling Rules
The proposed regulations amend the
IPIC pooling rules to clarify that those
rules are applied consistently with the
general LIFO pooling rule that
manufactured or processed goods and
resale goods may not be included in the
same dollar-value LIFO pool. This
general rule is intended to limit cost
transference, an inherent problem with
pooling. Cost transference may occur,
among other circumstances, when
inventory items from separate economic
activities (for example, manufacturing
and resale activities) are placed in the
same pool and may cause misallocation
of cost or distortion of income.
Accordingly, the proposed regulations
clarify that an IPIC-method taxpayer
who elects the IPIC pooling method
described in § 1.472–8(b)(4) or (c)(2) and
whose trade or business consists of both
manufacturing or processing activity
and resale activity may not commingle
the manufactured or processed goods
and the resale goods within the same
IPIC pool.
Specifically, the proposed regulations
provide that a manufacturer or
processor using the IPIC pooling method
under § 1.472–8(b)(4) that is also
engaged, within the same trade or
business, in wholesaling or retailing
goods purchased from others may elect
to establish dollar-value pools for the
manufactured or processed items
accounted for using the IPIC method
based on the 2-digit commodity codes in
Table 9 of the PPI Detailed Report. If the
manufacturer or processor makes this
election, the manufacturer or processor
must also establish pools for its resale
goods in accordance with § 1.472–
8(c)(2) (that is, based on the general
expenditure categories in Table 3 of the
CPI Detailed Report in the case of a
retailer or the 2-digit commodity codes
in Table 9 of the PPI Detailed Report in
the case of a retailer, wholesaler, jobber,
or distributor).
If the manufacturer or processor
chooses to use the 5-percent method of
pooling, manufactured or processed
IPIC pools (IPIC pools consisting of
manufactured or processed goods) of
less than 5 percent of the total current
year cost of all dollar-value pools may
be combined to form a single
miscellaneous IPIC pool of
manufactured or processed goods. The
manufacturer or processor may also
combine resale IPIC pools (IPIC pools
consisting of resale goods) of less than
5 percent of the total value of inventory
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to form a single miscellaneous IPIC pool
of resale goods. If the miscellaneous
IPIC pool of manufactured or processed
goods is less than 5 percent of the total
value of inventory, the manufacturer or
processor may combine the
miscellaneous IPIC pool of
manufactured or processed goods with
its largest manufactured or processed
IPIC pool. The miscellaneous IPIC pool
of resale goods may not be combined
with any other IPIC pool.
The proposed regulations also provide
that a wholesaler, retailer, jobber, or
distributor using the IPIC pooling
method under § 1.472–8(c)(2) that is
also engaged, within the same trade or
business, in manufacturing or
processing activities may elect to
establish dollar-value pools for the
resale goods accounted for using the
IPIC method in accordance with
§ 1.472–8(c)(2) (that is, based on the
general expenditure categories in Table
3 of the CPI Detailed Report in the case
of retailer or the 2-digit commodity
codes in Table 9 of the PPI Detailed
Report in the case of a wholesaler,
retailer, jobber, or distributor). If the
wholesaler, retailer, jobber, or
distributor makes this election, it must
also establish pools for its manufactured
or processed goods based on the 2-digit
commodity codes in Table 9 of the PPI
Detailed Report.
If the wholesaler, retailer, jobber, or
distributor chooses to use the 5-percent
method of pooling, resale IPIC pools of
less than 5 percent of the total value of
inventory may be combined to form a
single miscellaneous IPIC pool of resale
goods. The wholesaler, retailer, jobber,
or distributor may also combine the IPIC
pools of manufactured or processed
goods of less than 5 percent of the total
value of inventory to form a single
miscellaneous IPIC pool of
manufactured or processed goods. If the
resale miscellaneous IPIC pool is less
than 5 percent of the total value of
inventory, the wholesaler, retailer,
jobber, or distributor may combine the
resale miscellaneous IPIC pool with the
largest resale IPIC pool. The
miscellaneous IPIC pool of
manufactured or processed goods may
not be combined with any other IPIC
pool.
The Treasury Department and the IRS
specifically request comments on the
requirement that a taxpayer engaged in
both manufacturing and resale activities
within the same trade or business is
required to use IPIC pooling for both
activities.
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Changes To Conform With Current BLS
Publications
These proposed regulations modify
§ 1.472–8(b), (c), and (e)(3) to update
references from Table 6 (Producer price
indexes and percent changes for
commodity groupings and individual
items, not seasonally adjusted) to Table
9 (Producer price indexes and percent
changes for commodity and service
groupings and individual items, not
seasonally adjusted) because of BLS
changes in the PPI Detailed Report.
These proposed regulations also
modify § 1.472–8(e)(3)(ii) to remove the
exception to the trade or business
requirement for taxpayers using the
Department Store Inventory Price
Indexes because BLS discontinued
publishing these indexes after December
2013.
Effective/Applicability Date
These regulations are proposed to
apply for taxable years ending on or
after the date the regulations are
published as final regulations in the
Federal Register.
Special Analyses
Certain IRS regulations, including
these, are exempt from the requirements
of Executive Order 12866, as
supplemented and reaffirmed by
Executive Order 13563. Therefore, a
regulatory impact assessment is not
required. It also has been determined
that section 553(b) of the Administrative
Procedure Act (5 U.S.C. chapter 5) does
not apply to these regulations, and,
because these regulations do not impose
a collection of information on small
entities, the Regulatory Flexibility Act
(5 U.S.C. chapter 6) does not apply.
Pursuant to section 7805(f) of the
Internal Revenue Code, these proposed
regulations will be submitted to the
Chief Counsel for Advocacy of the Small
Business Administration for comment
on their impact on small business.
Comments and Request for a Public
Hearing
Before these proposed regulations are
adopted as final regulations,
consideration will be given to any
written (a signed original and eight (8)
copies) or electronic comments that are
submitted timely to the IRS. The
Treasury Department and the IRS
request comments on all aspects of the
proposed rules. All comments will be
available at www.regulations.gov or
upon request.
A public hearing will be scheduled if
requested in writing by any person that
timely submits written comments. If a
public hearing is scheduled, notice of
the date, time, and place for the public
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Federal Register / Vol. 81, No. 228 / Monday, November 28, 2016 / Proposed Rules
hearing will be published in the Federal
Register.
Drafting Information
The principal author of these
regulations is Natasha M. Mulleneaux of
the Office of the Associate Chief
Counsel (Income Tax & Accounting).
However, other personnel from the IRS
and the Treasury Department
participated in their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
Proposed Amendments to the
Regulations
Accordingly, 26 CFR part 1 is
proposed to be amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 continues to read in part as
follows:
■
Authority: 26 U.S.C. 7805 * * *
Section 1.472–8 also issued under 26 U.S.C
472. * * *
Par. 2. Section 1.472–8 is amended as
follows:
■ 1. Paragraph (b)(4) is revised.
■ 2. Paragraph (c)(2) is revised.
■ 3. Paragraph (e)(3)(ii) is revised.
■ 4. Paragraph (e)(3)(iii)(B)(2) is
amended by removing ‘‘Table 6
(Producer price indexes and percent
changes for commodity groupings and
individual items, not seasonally
adjusted)’’ and adding in its place
‘‘Table 9 (formerly Table 6) (Producer
price indexes and percent changes for
commodity and service groupings and
individual items, not seasonally
adjusted)’’ in the first sentence; and
removing ‘‘Table 6’’ and adding in its
place ‘‘Table 9’’ in the second sentence.
■ 5. Paragraphs (e)(3)(iii)(C)(1) and (2)
are amended by removing ‘‘Table 6’’ and
adding in its place ‘‘Table 9’’.
■ 6. Paragraph (e)(3)(v) is revised.
The revisions read as follows:
■
§ 1.472–8 Dollar-value method of pricing
LIFO inventories.
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*
*
*
*
*
(b) * * *
(4) IPIC method pools—(i) In general.
A manufacturer or processor that elects
to use the inventory price index
computation method described in
paragraph (e)(3) of this section (IPIC
method) for a trade or business may
elect to establish dollar-value pools for
those manufactured or processed items
accounted for using the IPIC method as
provided in this paragraph (b)(4)(i)
based on the 2-digit commodity codes
(that is, major commodity groups) in
Table 9 (formerly Table 6) (Producer
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price indexes and percent changes for
commodity and service groupings and
individual items, not seasonally
adjusted) of the ‘‘PPI Detailed Report’’
published monthly by the United States
Bureau of Labor Statistics (available at
https://www.bls.gov). A taxpayer electing
to establish dollar-value pools under
this paragraph (b)(4)(i) may combine
IPIC pools of manufactured or processed
goods that comprise less than 5 percent
of the total current-year cost of all
dollar-value pools for that trade or
business to form a single miscellaneous
manufactured or processed IPIC pool. A
taxpayer electing to establish dollarvalue pools under this paragraph
(b)(4)(i) may combine a miscellaneous
manufactured or processed IPIC pool
that comprises less than 5 percent of the
total current-year cost of all dollar-value
pools with the largest manufactured or
processed IPIC pool. Each of these 5percent rules is a method of accounting.
A taxpayer may not change to, or cease
using, either 5-percent rule without
obtaining the Commissioner’s prior
consent. Whether a specific
manufactured or processed IPIC pool or
the miscellaneous manufactured or
processed IPIC pool satisfies the
applicable 5-percent rule must be
determined in the year of adoption or
year of change, whichever is applicable,
and redetermined every third taxable
year. Any change in pooling required or
permitted as a result of a 5-percent rule
is a change in method of accounting. A
taxpayer must secure the consent of the
Commissioner pursuant to § 1.446–1(e)
before combining or separating
manufactured or processed IPIC pools
and must combine or separate its
manufactured or processed IPIC pools in
accordance with paragraph (g)(2) of this
section.
(ii) Pooling of goods a manufacturer
or processor purchased for resale. A
manufacturer or processor electing to
establish dollar-value pools under
paragraph (b)(4)(i) of this section and
that is also engaged, within the same
trade or business, in wholesaling or
retailing goods purchased from others
(resale), must establish pools for its
resale goods in accordance with
paragraph (c)(2)(i) of this section. A
manufacturer or processor that must
establish dollar-value pools for resale
goods under this paragraph (b)(4)(ii)
may combine IPIC pools of resale goods
that comprise less than 5 percent of the
total current-year cost of all dollar-value
pools for that trade or business to form
a single miscellaneous resale IPIC pool.
The single miscellaneous resale IPIC
pool established pursuant to this
paragraph (b)(4)(ii) may not be
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85453
combined with any other IPIC pool.
This 5-percent rule is a method of
accounting. A taxpayer may not change
to, or cease using, this 5-percent rule
without obtaining the Commissioner’s
prior consent. Whether a specific resale
IPIC pool satisfies the 5-percent rule
must be determined in the year of
adoption or year of change, whichever
is applicable, and redetermined every
third taxable year. Any change in
pooling required or permitted as a result
of this 5-percent rule is a change in
method of accounting. A taxpayer must
secure the consent of the Commissioner
pursuant to § 1.446–1(e) before
combining or separating resale IPIC
pools and must combine or separate its
resale IPIC pools in accordance with
paragraph (g)(2) of this section.
(iii) No commingling of manufactured
goods and resale goods within a pool.
Notwithstanding any other rule
provided in paragraph (b) or (c) of this
section, a manufacturer or processor
electing to establish dollar-value pools
under paragraph (b)(4)(i) of this section
and that is also engaged in retailing or
wholesaling may not include
manufactured or processed goods in the
same IPIC pool as goods purchased for
resale. Further, in applying the 5percent rules described in paragraphs
(b)(4)(i) and (ii) of this section, a
taxpayer may not combine an IPIC pool
of manufactured or processed goods that
comprises less than 5 percent of the
total current-year cost of all dollar-value
pools for that trade or business with a
resale IPIC pool that comprises less than
5 percent of the total current-year cost
of all dollar-value pools for the purpose
of forming a single miscellaneous IPIC
pool.
(iv) Examples. The rules of paragraph
(b)(4) of this section may be illustrated
by the following examples:
Example 1. (i) Taxpayer is engaged in the
trade or business of manufacturing products
A, B, and C. In order to cover temporary
shortages, Taxpayer also purchases a small
quantity of identical products for resale to
customers. Taxpayer treats its manufacturing
and resale activities as a single trade or
business. Taxpayer uses the IPIC method
described in paragraph (e)(3) of this section.
Pursuant to its election, Taxpayer establishes
dollar-value pools for the manufactured
items under paragraph (b)(4)(i) of this
section, based on the 2-digit commodity
codes in Table 9 of the PPI Detailed Report.
Taxpayer also establishes dollar-value pools
for the items purchased for resale under
paragraph (b)(4)(ii) of this section, based on
the 2-digit commodity codes in Table 9 of the
PPI Detailed Report. Taxpayer does not
choose to use the 5-percent rules under
paragraphs (b)(4)(i) and (ii) of this section.
(ii) Even though Taxpayer has
manufactured items and resale items that
share the same 2-digit commodity codes,
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under paragraph (b)(4)(iii) of this section,
Taxpayer’s manufactured goods may not be
included in the same IPIC pool as its goods
purchased for resale.
Example 2. (i) The facts are the same as
in Example 1, except Taxpayer establishes
three IPIC pools for its manufacturing
activities and three IPIC pools for its resale
activities. Further, Taxpayer chooses to use
the 5-percent rules of paragraphs (b)(4)(i) and
(ii) of this section. The percentage of total
current-year cost of each IPIC pool to the
current-year cost of all dollar-value pools for
the trade or business is as follows:
Percentage of total
current-year cost of
IPIC pool to current-year cost of all
dollar-value pools
(%)
Manufacturing Pools:
Pool A ....................
Pool B ....................
Pool C ....................
Resale Pools:
Pool D ....................
Pool E ....................
Pool F ....................
90
1
1
6
1
1
100
(ii) For purposes of applying the 5-percent
rules to Taxpayer’s manufacturing operations
under paragraph (b)(4)(i) of this section,
because Pools B and C each comprise less
than 5 percent of the total current-year cost
of all dollar-value pools, Pools B and C may
be combined to form a single miscellaneous
pool of manufactured or processed goods
(new Pool G).
(iii) For purposes of applying the 5-percent
rules to Taxpayer’s resale operations under
paragraph (b)(4)(ii) of this section, because
Pools E and F each comprise less than 5
percent of the total current-year cost of all
dollar-value pools, Pools E and F may be
combined to form a single miscellaneous
pool of resale goods (new Pool H).
(iv) Because Pool G comprises less than 5
percent of the total current-year cost of all
dollar-value pools, under paragraph (b)(4)(i)
of this section, Pool G may be combined with
Pool A, the largest IPIC pool of manufactured
goods.
(v) Although Pool H also comprises less
than 5 percent of the total current-year cost
of all dollar-value pools, under paragraph
(b)(4)(ii) of this section, Pool H may not be
combined with Pool A, the largest pool of
manufactured goods, or Pool D, the largest
pool of resale goods.
mstockstill on DSK3G9T082PROD with PROPOSALS
*
*
*
*
*
(c) * * *
(2) IPIC method pools—(i) In general.
A retailer that elects to use the
inventory price index computation
method described in paragraph (e)(3) of
this section (IPIC method) for a trade or
business may elect to establish dollarvalue pools for those purchased items
accounted for using the IPIC method as
provided in this paragraph (c)(2)(i)
based on either the general expenditure
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17:52 Nov 25, 2016
Jkt 241001
categories (that is, major groups) in
Table 3 (Consumer Price Index for all
Urban Consumers (CPI–U): U.S. city
average, detailed expenditure
categories) of the ‘‘CPI Detailed Report’’
or the 2-digit commodity codes (that is,
major commodity groups) in Table 9
(formerly Table 6) (Producer price
indexes and percent changes for
commodity and service groupings and
individual items, not seasonally
adjusted) of the ‘‘PPI Detailed Report.’’
A wholesaler, jobber, or distributor that
elects to use the IPIC method for a trade
or business may elect to establish dollarvalue pools for any group of resale
goods accounted for using the IPIC
method based on the 2-digit commodity
codes (that is, major commodity groups)
in Table 9 (Producer price indexes and
percent changes for commodity and
service groupings and individual items,
not seasonally adjusted) of the ‘‘PPI
Detailed Report.’’ The ‘‘CPI Detailed
Report’’ and the ‘‘PPI Detailed Report’’
are published monthly by the United
States Bureau of Labor Statistics (BLS)
(available at https://www.bls.gov). A
taxpayer electing to establish dollarvalue pools under this paragraph
(c)(2)(i) may combine IPIC pools of
resale goods that comprise less than 5
percent of the total current-year cost of
all dollar-value pools for that trade or
business to form a single miscellaneous
resale IPIC pool. A taxpayer electing to
establish pools under this paragraph
(c)(2)(i) may combine a miscellaneous
resale IPIC pool that comprises less than
5 percent of the total current-year cost
of all dollar-value pools with the largest
resale IPIC pool. Each of these 5-percent
rules is a method of accounting. A
taxpayer may not change to, or cease
using, either 5-percent rule without
obtaining the Commissioner’s prior
consent. Whether a specific resale IPIC
pool or the miscellaneous resale IPIC
pool satisfies the applicable 5-percent
rule must be determined in the year of
adoption or year of change, whichever
is applicable, and redetermined every
third taxable year. Any change in
pooling required or permitted under a 5percent rule is a change in method of
accounting. A taxpayer must secure the
consent of the Commissioner pursuant
to § 1.446–1(e) before combining or
separating resale IPIC pools and must
combine or separate its resale IPIC pools
in accordance with paragraph (g)(2) of
this section.
(ii) Pooling of manufactured or
processed goods of a wholesaler,
retailer, jobber, or distributor. A
wholesaler, retailer, jobber, or
distributor electing to establish dollarvalue pools under paragraph (c)(2)(i) of
PO 00000
Frm 00007
Fmt 4702
Sfmt 4702
this section and that is also engaged,
within the same trade or business, in
manufacturing or processing, must
establish pools for its manufactured or
processed goods in accordance with
paragraph (b)(4)(i) of this section. A
wholesaler, retailer, jobber, or
distributor that must establish dollarvalue pools for manufactured or
processed goods under this paragraph
(c)(2)(ii) may combine IPIC pools of
manufactured or processed goods that
comprise less than 5 percent of the total
current-year cost of all dollar-value
pools for that trade or business to form
a single miscellaneous manufactured or
processed IPIC pool. The single
miscellaneous manufactured or
processed IPIC pool established
pursuant to this paragraph (c)(2)(ii) may
not be combined with any other IPIC
pool. This 5-percent rule is a method of
accounting. A taxpayer may not change
to, or cease using, this 5-percent rule
without obtaining the Commissioner’s
prior consent. Whether a specific
manufactured or processed IPIC pool
satisfies the 5-percent rule must be
determined in the year of adoption or
year of change, whichever is applicable,
and redetermined every third taxable
year. Any change in pooling required or
permitted as a result of a 5-percent rule
is a change in method of accounting. A
taxpayer must secure the consent of the
Commissioner pursuant to § 1.446–1(e)
before combining or separating
manufactured or processed IPIC pools
and must combine or separate its
manufactured or processed IPIC pools in
accordance with paragraph (g)(2) of this
section.
(iii) No commingling of manufactured
goods and purchased goods within a
pool. Notwithstanding any other rule
provided in paragraph (b) or (c) of this
section, a wholesaler, retailer, jobber, or
distributor electing to establish dollarvalue pools under paragraph (c)(2)(i) of
this section and that is also engaged in
manufacturing or processing may not
include manufactured or processed
goods in the same IPIC pool as goods
purchased for resale. Further, in
applying the 5-percent rules described
in paragraphs (c)(2)(i) and (ii) of this
section, a taxpayer may not combine an
IPIC pool of manufactured or processed
goods that comprises less than 5 percent
of the total current-year cost of all
dollar-value pools with a resale IPIC
pool that comprises less than 5 percent
of the total current-year cost of all
dollar-value pools for purposes of
forming a single miscellaneous IPIC
pool.
(iv) Examples. The rules of paragraph
(c)(2) of this section may be illustrated
by the following examples:
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Federal Register / Vol. 81, No. 228 / Monday, November 28, 2016 / Proposed Rules
Example 1. (i) Taxpayer is engaged in the
trade or business of wholesaling products A,
B, and C. Taxpayer also manufactures a small
quantity of identical products for sale to
customers. Taxpayer treats its wholesaling
and manufacturing activities as a single trade
or business. Taxpayer uses the IPIC method
described in paragraph (e)(3) of this section.
Pursuant to its election, Taxpayer establishes
dollar-value pools for the wholesale items
purchased for resale under paragraph (c)(2)(i)
of this section, based on the 2-digit
commodity codes in Table 9 of the PPI
Detailed Report. Taxpayer also establishes
dollar-value pools for the manufactured
items under paragraph (c)(2)(ii) of this
section, based on the 2-digit commodity
codes in Table 9 of the PPI Detailed Report.
Taxpayer does not choose to use the 5percent rules under paragraphs (c)(2)(i) and
(ii) of this section.
(ii) Even though Taxpayer has resale and
manufactured items that share the same 2digit commodity codes, under paragraph
(c)(2)(iii) of this section, Taxpayer’s resale
goods may not be included in the same IPIC
pool as its manufactured goods.
Example 2.(i) The facts are the same as in
Example 1, except Taxpayer establishes three
IPIC pools for its wholesale activities and
three IPIC pools for its manufacturing
activities. Further, Taxpayer chooses to use
the 5-percent rules of paragraphs (c)(2)(i) and
(ii) of this section. The percentage of total
current-year cost of each IPIC pool to the
current-year cost of all dollar-value pools for
the trade or business is as follows:
Percentage of total
current-year cost of
IPIC pool to current-year cost of all
dollar-value pools
(%)
Wholesaling Pools:
Pool J ....................
Pool K ....................
Pool L ....................
Manufacturing Pools:
Pool M ...................
Pool N ....................
Pool O ...................
90
1
1
6
1
1
of this section, Pool P may be combined with
Pool J, the largest IPIC pool of resale goods.
(v) Although Pool Q also comprises less
than 5 percent of the total current-year cost
of all dollar-value pools, under paragraph
(c)(2)(ii) of this section, Pool Q may not be
combined with Pool J, the largest pool of
resale goods, or Pool M, the largest pool of
manufactured goods.
*
*
*
*
*
(e) * * *
(3) * * *
(ii) Eligibility. Any taxpayer electing
to use the dollar-value LIFO method
may elect to use the IPIC method.
Except as provided in other published
guidance, a taxpayer that elects to use
the IPIC method for a specific trade or
business must use that method to
account for all items of dollar-value
LIFO inventory.
*
*
*
*
*
(v) Effective/applicability date. The
rules of this paragraph (e)(3) and
paragraphs (b)(4) and (c)(2) of this
section are applicable for taxable years
ending on or after the date the Treasury
decision adopting these rules as final
regulations is published in the Federal
Register.
*
*
*
*
*
John Dalrymple,
Deputy Commissioner for Services and
Enforcement.
[FR Doc. 2016–28375 Filed 11–25–16; 8:45 am]
BILLING CODE 4830–01–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R03–OAR–2016–0454; FRL–9955–51Region 3]
mstockstill on DSK3G9T082PROD with PROPOSALS
Approval and Promulgation of Air
Quality Implementation Plans;
100
Maryland; New Regulations for
Architectural and Industrial
(ii) For purposes of applying the 5-percent
Maintenance Coatings
rules to Taxpayer’s wholesaling operations
under paragraph (c)(2)(i) of this section,
because Pools K and Pool L each comprise
less than 5 percent of the total current-year
cost of all dollar-value pools, Pools K and L
may be combined to form a single
miscellaneous pool of wholesale goods (new
Pool P).
(iii) For purposes of applying the 5-percent
rules to Taxpayer’s manufacturing operations
under paragraph (c)(2)(ii) of this section,
because Pools N and O each comprise less
than 5 percent of the total current-year cost
of all dollar-value pools, Pools N and O may
be combined to form a single miscellaneous
pool of manufactured goods (new Pool Q).
(iv) Because Pool P comprises less than 5
percent of the total current-year cost of all
dollar-value pools, under paragraph (c)(2)(i)
VerDate Sep<11>2014
16:30 Nov 25, 2016
Jkt 241001
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:
The Environmental Protection
Agency (EPA) is proposing to approve a
state implementation plan (SIP) revision
submitted by the State of Maryland.
This revision pertains to a provision
establishing new volatile organic
compound (VOC) content limits and
standards for architectural and
industrial maintenance (AIM) coatings
available for sale and use in Maryland.
This action is being taken under the
Clean Air Act (CAA).
SUMMARY:
PO 00000
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Sfmt 4702
85455
Written comments must be
received on or before December 28,
2016.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–R03–
OAR–2016–0454 at https://
www.regulations.gov, or via email to
pino.maria@epa.gov. For comments
submitted at Regulations.gov, follow the
online instructions for submitting
comments. Once submitted, comments
cannot be edited or removed from
Regulations.gov. For either manner of
submission, EPA may publish any
comment received to its public docket.
Do not submit electronically any
information you consider to be
confidential business information (CBI)
or other information whose disclosure is
restricted by statute. Multimedia
submissions (audio, video, etc.) must be
accompanied by a written comment.
The written comment is considered the
official comment and should include
discussion of all points you wish to
make. EPA will generally not consider
comments or comment contents located
outside of the primary submission (i.e.
on the web, cloud, or other file sharing
system). For additional submission
methods, please contact the person
identified in the FOR FURTHER
INFORMATION CONTACT section. For the
full EPA public comment policy,
information about CBI or multimedia
submissions, and general guidance on
making effective comments, please visit
https://www2.epa.gov/dockets/
commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT:
Irene Shandruk, (215) 814–2166, or by
email at shandruk.irene@epa.gov.
SUPPLEMENTARY INFORMATION:
DATES:
I. Background
In 2001, the Ozone Transport
Commission (OTC), in collaboration
with the Ozone Transport Region (OTR)
states, developed several emission
reduction measures, including a VOC
model rule for AIM coatings (known as
the Phase I AIM model rule), which
addressed VOC reductions in the OTR.
In 2004, consistent with the OTC Phase
I AIM model rule, Maryland adopted
COMAR 26.11.33—Architectural
Coatings, which established VOC
content limits, recordkeeping and
labeling requirements, and standard
practices for use and application of
coatings used in architectural and
industrial maintenance.
The Phase I AIM model rule was
replaced with an amended OTC model
rule in 2011 (known as the Phase II AIM
model rule). The Phase II AIM model
rule was developed for states that
needed additional VOC emission
E:\FR\FM\28NOP1.SGM
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Agencies
[Federal Register Volume 81, Number 228 (Monday, November 28, 2016)]
[Proposed Rules]
[Pages 85450-85455]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-28375]
=======================================================================
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG-125946-10]
RIN 1545-BJ66
Dollar-Value LIFO Regulations: Inventory Price Index Computation
(IPIC) Method Pools
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: This document contains proposed regulations that relate to the
establishment of dollar-value last-in, first-out (LIFO) inventory pools
by certain taxpayers that use the inventory price index computation
(IPIC) pooling method. The proposed regulations provide rules regarding
the proper pooling of manufactured or processed goods and wholesale or
retail (resale) goods. The proposed regulations would affect taxpayers
who use the IPIC pooling method and whose inventory for a trade or
business consists of manufactured or processed goods and resale goods.
DATES: Comments and requests for a public hearing must be received by
February 27, 2017.
ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-125946-10), Room
5205, Internal Revenue Service, PO Box 7604, Ben Franklin Station,
Washington, DC 20044. Submissions may be hand delivered Monday through
Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-
125946-10), Courier's Desk, Internal Revenue Service, 1111 Constitution
Avenue NW., Washington, DC, or sent electronically via the Federal
eRulemaking Portal at https://www.regulations.gov/ (IRS REG-125946-10).
FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations,
Natasha M. Mulleneaux, (202) 317-7007; concerning submission of
comments and requests for a public hearing, Regina Johnson, (202) 317-
6901 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
Section 472 of the Internal Revenue Code permits a taxpayer to
account for inventories using the LIFO method of accounting. The LIFO
method of accounting for goods treats inventories on hand at the end of
the year as consisting first of inventory on hand at the beginning of
the year and then of inventories acquired during the year.
Section 1.472-8(a) of the Income Tax Regulations (26 CFR part 1)
provides that any taxpayer may elect to determine the cost of its LIFO
inventories using the dollar-value method, provided such method is used
consistently and clearly reflects income. The dollar-value method of
valuing LIFO inventories is a method of determining cost by using
``base-year'' cost expressed in terms of total dollars rather than the
quantity and price of specific goods as the unit of measurement. The
``base-year'' cost is the aggregate of the cost (determined as of the
beginning of the tax year for which the LIFO method is first adopted)
of all items in a pool.
Pooling is central to the operation of the dollar-value LIFO
method. Pooling requires costs related to different inventory products
to be grouped into one or more inventory pools. To determine whether
there is an increment or liquidation in a pool for a particular taxable
year, the end of the year inventory of the pool expressed in terms of
base-year cost is compared with the beginning of the year inventory of
the pool expressed in terms of base-year cost. The regulations
prescribe rules for determining whether the number and composition of
the pools used by the taxpayer are appropriate. The rules vary
depending upon whether the taxpayer is engaged in the activity of
manufacturing or processing or the activity of wholesaling or
retailing.
[[Page 85451]]
The general pooling rules applicable to dollar-value LIFO taxpayers
are in Sec. 1.472-8(b) and (c). These paragraphs provide separate
pooling principles for taxpayers engaged in the manufacturing or
processing of goods (Sec. 1.472-8(b)), and for taxpayers engaged in
the wholesaling or retailing of goods purchased from others (Sec.
1.472-8(c)).
Section 1.472-8(b)(1) requires a manufacturer or processor to
establish one pool for each natural business unit (natural business
unit pooling method) unless the manufacturer or processor elects under
Sec. 1.472-8(b)(3) to establish multiple pools. Further, Sec. 1.472-
8(b)(2) provides that where a manufacturer or processor is also engaged
in the wholesaling or retailing of goods purchased from others, the
wholesaling or retailing operations with respect to such purchased
goods shall not be considered a part of any manufacturing or processing
unit. Additionally, Sec. 1.472-8(b)(1) requires that where the
manufacturer or processor is also engaged in the wholesaling or
retailing of goods purchased from others, any pooling of the LIFO
inventory of such purchased goods for wholesaling and retailing
operations shall be determined in accordance with Sec. 1.472-8(c).
In Amity Leather Products Co. v. Commissioner, 82 T.C. 726 (1984),
the Tax Court considered whether a taxpayer that used the natural
business unit pooling method was subject to the separate pooling
requirements by virtue of being both a manufacturer and a wholesaler or
retailer of merchandise. The court concluded that requiring separate
inventory accounting for the two functions was reasonable and held
that, where the taxpayer manufactured goods and regularly purchased
identical goods from a subsidiary for resale, it was required to
maintain separate pools for manufactured and purchased inventory.
A manufacturer or processor using the natural business unit pooling
method may elect to use the multiple pooling method described in Sec.
1.472-8(b)(3) for inventory items that are not within a natural
business unit. Alternatively, a manufacturer or processor that does not
use the natural business unit pooling method may elect to use the
multiple pooling method. Under the multiple pooling method, generally
each pool should consist of a group of inventory items that are
substantially similar. Thus, raw materials that are substantially
similar should be pooled together. Similarly, finished goods and goods-
in-process should be placed in pools classified by major classes or
types of goods.
Section 1.472-8(c)(1) requires wholesalers, retailer, jobbers, and
distributors to establish inventory pools by major lines, types, or
classes of goods. Mirroring Sec. 1.472-8(b)(1), Sec. 1.472-8(c)(1)
requires that where a wholesaler or retailer is also engaged in the
manufacturing or processing of goods, the pooling of the LIFO inventory
for the manufacturing or processing operations must be determined in
accordance with Sec. 1.472-8(b).
In general, any taxpayer that elects to use the dollar-value LIFO
method to value LIFO inventories may elect to use the IPIC method to
compute the base-year cost and determine the LIFO value of a dollar-
value pool for a trade or business. A taxpayer that elects to use the
IPIC method of determining the value of a dollar-value LIFO pool for a
trade or business may also elect to establish dollar-value pools, for
those items accounted for using the IPIC method, using the IPIC pooling
method provided in Sec. 1.472-8(b)(4) and (c)(2). Section 1.472-
8(b)(4) governs the application of the IPIC pooling method to
manufacturers and processors that elect to use the IPIC method for a
trade or business. Section 1.472-8(c)(2) governs the application of the
IPIC pooling method to wholesalers, retailers, jobbers, and
distributors that elect to use the IPIC method for a trade or business.
For manufacturers and processors using the IPIC pooling method
under Sec. 1.472-8(b)(4), pools may be established for those items
accounted for using the IPIC method based on the 2-digit commodity
codes (that is, major commodity groups) in Table 9 (formerly Table 6)
of the Producer Price Index Detailed Report (PPI Detailed Report),
which is published monthly by the United States Bureau of Labor
Statistics (BLS). A taxpayer establishing IPIC pools under Sec. 1.472-
8(b)(4) may combine IPIC pools that comprise less than 5 percent of the
total inventory value of all dollar-value pools to form a single
miscellaneous IPIC pool. If the resulting miscellaneous IPIC pool is
less than 5 percent of the total inventory value of all dollar-value
pools, the taxpayer may combine the miscellaneous IPIC pool with its
largest IPIC pool.
For retailers using the IPIC pooling method under Sec. 1.472-
8(c)(2), pools may be established for those purchased items accounted
for using the IPIC method based on either the general expenditure
categories (that is, major groups) in Table 3 of the Consumer Price
Index Detailed Report (CPI Detailed Report), published monthly by BLS,
or the 2-digit commodity codes (that is, major commodity groups) in
Table 9 of the PPI Detailed Report. For wholesalers, jobbers, or
distributors using the IPIC pooling method under Sec. 1.472-8(c)(2),
pools may be established for those items accounted for using the IPIC
method based on the 2-digit commodity codes in Table 9 of the PPI
Detailed Report. A taxpayer establishing IPIC pools under Sec. 1.472-
8(c)(2) may combine pools that comprise less than 5 percent of the
total inventory value of all dollar-value pools to form a single
miscellaneous IPIC pool. If the resulting miscellaneous IPIC pool is
less than 5 percent of the total inventory value of all dollar-value
pools, the taxpayer may combine the miscellaneous IPIC pool with its
largest IPIC pool.
Each of the 5-percent rules provided in Sec. 1.472-8(b)(4) or
(c)(2) is a method of accounting. Thus, a taxpayer may not change to,
or cease using either 5-percent rule without obtaining the prior
consent of the Commissioner. Whether a specific IPIC pool or the
miscellaneous IPIC pool satisfies the applicable 5-percent rule must be
determined in the year of adoption or year of change (whichever is
applicable) and redetermined every third taxable year. Any change in
pooling required or permitted under a 5-percent rule is also a change
in method of accounting. A taxpayer must secure the consent of the
Commissioner before combining or separating pools. The general
procedures under section 446(e) and Sec. 1.446-1(e) that a taxpayer
must follow to obtain the consent of the Commissioner to change a
method of accounting for federal income tax purposes are contained in
Rev. Proc. 2015-13, 2015-5 I.R.B. 419 (or its successors), as modified
by Rev. Proc. 2015-33, 2015-24 I.R.B. 1067. See Sec.
601.601(d)(2)(ii)(b).
The general pooling rules of Sec. 1.472-8(b) and (c) provide that
where a taxpayer is engaged in both a manufacturing or processing
activity and a wholesaling or retailing activity, separate pooling
rules apply to the separate activities, and goods purchased for resale
may not be included in the same pool as manufactured or purchased
goods. On the other hand, the IPIC pooling rules address circumstances
where a trade or business consists entirely of a manufacturing,
processing, retailing, or wholesaling activity. The Treasury Department
and the IRS have become aware of confusion concerning how the IPIC
pooling rules apply where a taxpayer is engaged in both a manufacturing
or processing activity and a wholesaling or retailing
[[Page 85452]]
activity. Accordingly, these proposed regulations address this issue.
Explanation of Provisions
Changes to IPIC Pooling Rules
The proposed regulations amend the IPIC pooling rules to clarify
that those rules are applied consistently with the general LIFO pooling
rule that manufactured or processed goods and resale goods may not be
included in the same dollar-value LIFO pool. This general rule is
intended to limit cost transference, an inherent problem with pooling.
Cost transference may occur, among other circumstances, when inventory
items from separate economic activities (for example, manufacturing and
resale activities) are placed in the same pool and may cause
misallocation of cost or distortion of income.
Accordingly, the proposed regulations clarify that an IPIC-method
taxpayer who elects the IPIC pooling method described in Sec. 1.472-
8(b)(4) or (c)(2) and whose trade or business consists of both
manufacturing or processing activity and resale activity may not
commingle the manufactured or processed goods and the resale goods
within the same IPIC pool.
Specifically, the proposed regulations provide that a manufacturer
or processor using the IPIC pooling method under Sec. 1.472-8(b)(4)
that is also engaged, within the same trade or business, in wholesaling
or retailing goods purchased from others may elect to establish dollar-
value pools for the manufactured or processed items accounted for using
the IPIC method based on the 2-digit commodity codes in Table 9 of the
PPI Detailed Report. If the manufacturer or processor makes this
election, the manufacturer or processor must also establish pools for
its resale goods in accordance with Sec. 1.472-8(c)(2) (that is, based
on the general expenditure categories in Table 3 of the CPI Detailed
Report in the case of a retailer or the 2-digit commodity codes in
Table 9 of the PPI Detailed Report in the case of a retailer,
wholesaler, jobber, or distributor).
If the manufacturer or processor chooses to use the 5-percent
method of pooling, manufactured or processed IPIC pools (IPIC pools
consisting of manufactured or processed goods) of less than 5 percent
of the total current year cost of all dollar-value pools may be
combined to form a single miscellaneous IPIC pool of manufactured or
processed goods. The manufacturer or processor may also combine resale
IPIC pools (IPIC pools consisting of resale goods) of less than 5
percent of the total value of inventory to form a single miscellaneous
IPIC pool of resale goods. If the miscellaneous IPIC pool of
manufactured or processed goods is less than 5 percent of the total
value of inventory, the manufacturer or processor may combine the
miscellaneous IPIC pool of manufactured or processed goods with its
largest manufactured or processed IPIC pool. The miscellaneous IPIC
pool of resale goods may not be combined with any other IPIC pool.
The proposed regulations also provide that a wholesaler, retailer,
jobber, or distributor using the IPIC pooling method under Sec. 1.472-
8(c)(2) that is also engaged, within the same trade or business, in
manufacturing or processing activities may elect to establish dollar-
value pools for the resale goods accounted for using the IPIC method in
accordance with Sec. 1.472-8(c)(2) (that is, based on the general
expenditure categories in Table 3 of the CPI Detailed Report in the
case of retailer or the 2-digit commodity codes in Table 9 of the PPI
Detailed Report in the case of a wholesaler, retailer, jobber, or
distributor). If the wholesaler, retailer, jobber, or distributor makes
this election, it must also establish pools for its manufactured or
processed goods based on the 2-digit commodity codes in Table 9 of the
PPI Detailed Report.
If the wholesaler, retailer, jobber, or distributor chooses to use
the 5-percent method of pooling, resale IPIC pools of less than 5
percent of the total value of inventory may be combined to form a
single miscellaneous IPIC pool of resale goods. The wholesaler,
retailer, jobber, or distributor may also combine the IPIC pools of
manufactured or processed goods of less than 5 percent of the total
value of inventory to form a single miscellaneous IPIC pool of
manufactured or processed goods. If the resale miscellaneous IPIC pool
is less than 5 percent of the total value of inventory, the wholesaler,
retailer, jobber, or distributor may combine the resale miscellaneous
IPIC pool with the largest resale IPIC pool. The miscellaneous IPIC
pool of manufactured or processed goods may not be combined with any
other IPIC pool.
The Treasury Department and the IRS specifically request comments
on the requirement that a taxpayer engaged in both manufacturing and
resale activities within the same trade or business is required to use
IPIC pooling for both activities.
Changes To Conform With Current BLS Publications
These proposed regulations modify Sec. 1.472-8(b), (c), and (e)(3)
to update references from Table 6 (Producer price indexes and percent
changes for commodity groupings and individual items, not seasonally
adjusted) to Table 9 (Producer price indexes and percent changes for
commodity and service groupings and individual items, not seasonally
adjusted) because of BLS changes in the PPI Detailed Report.
These proposed regulations also modify Sec. 1.472-8(e)(3)(ii) to
remove the exception to the trade or business requirement for taxpayers
using the Department Store Inventory Price Indexes because BLS
discontinued publishing these indexes after December 2013.
Effective/Applicability Date
These regulations are proposed to apply for taxable years ending on
or after the date the regulations are published as final regulations in
the Federal Register.
Special Analyses
Certain IRS regulations, including these, are exempt from the
requirements of Executive Order 12866, as supplemented and reaffirmed
by Executive Order 13563. Therefore, a regulatory impact assessment is
not required. It also has been determined that section 553(b) of the
Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to
these regulations, and, because these regulations do not impose a
collection of information on small entities, the Regulatory Flexibility
Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of
the Internal Revenue Code, these proposed regulations will be submitted
to the Chief Counsel for Advocacy of the Small Business Administration
for comment on their impact on small business.
Comments and Request for a Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written (a signed original and eight
(8) copies) or electronic comments that are submitted timely to the
IRS. The Treasury Department and the IRS request comments on all
aspects of the proposed rules. All comments will be available at
www.regulations.gov or upon request.
A public hearing will be scheduled if requested in writing by any
person that timely submits written comments. If a public hearing is
scheduled, notice of the date, time, and place for the public
[[Page 85453]]
hearing will be published in the Federal Register.
Drafting Information
The principal author of these regulations is Natasha M. Mulleneaux
of the Office of the Associate Chief Counsel (Income Tax & Accounting).
However, other personnel from the IRS and the Treasury Department
participated in their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.472-8 also issued under 26 U.S.C 472. * * *
0
Par. 2. Section 1.472-8 is amended as follows:
0
1. Paragraph (b)(4) is revised.
0
2. Paragraph (c)(2) is revised.
0
3. Paragraph (e)(3)(ii) is revised.
0
4. Paragraph (e)(3)(iii)(B)(2) is amended by removing ``Table 6
(Producer price indexes and percent changes for commodity groupings and
individual items, not seasonally adjusted)'' and adding in its place
``Table 9 (formerly Table 6) (Producer price indexes and percent
changes for commodity and service groupings and individual items, not
seasonally adjusted)'' in the first sentence; and removing ``Table 6''
and adding in its place ``Table 9'' in the second sentence.
0
5. Paragraphs (e)(3)(iii)(C)(1) and (2) are amended by removing ``Table
6'' and adding in its place ``Table 9''.
0
6. Paragraph (e)(3)(v) is revised.
The revisions read as follows:
Sec. 1.472-8 Dollar-value method of pricing LIFO inventories.
* * * * *
(b) * * *
(4) IPIC method pools--(i) In general. A manufacturer or processor
that elects to use the inventory price index computation method
described in paragraph (e)(3) of this section (IPIC method) for a trade
or business may elect to establish dollar-value pools for those
manufactured or processed items accounted for using the IPIC method as
provided in this paragraph (b)(4)(i) based on the 2-digit commodity
codes (that is, major commodity groups) in Table 9 (formerly Table 6)
(Producer price indexes and percent changes for commodity and service
groupings and individual items, not seasonally adjusted) of the ``PPI
Detailed Report'' published monthly by the United States Bureau of
Labor Statistics (available at https://www.bls.gov). A taxpayer electing
to establish dollar-value pools under this paragraph (b)(4)(i) may
combine IPIC pools of manufactured or processed goods that comprise
less than 5 percent of the total current-year cost of all dollar-value
pools for that trade or business to form a single miscellaneous
manufactured or processed IPIC pool. A taxpayer electing to establish
dollar-value pools under this paragraph (b)(4)(i) may combine a
miscellaneous manufactured or processed IPIC pool that comprises less
than 5 percent of the total current-year cost of all dollar-value pools
with the largest manufactured or processed IPIC pool. Each of these 5-
percent rules is a method of accounting. A taxpayer may not change to,
or cease using, either 5-percent rule without obtaining the
Commissioner's prior consent. Whether a specific manufactured or
processed IPIC pool or the miscellaneous manufactured or processed IPIC
pool satisfies the applicable 5-percent rule must be determined in the
year of adoption or year of change, whichever is applicable, and
redetermined every third taxable year. Any change in pooling required
or permitted as a result of a 5-percent rule is a change in method of
accounting. A taxpayer must secure the consent of the Commissioner
pursuant to Sec. 1.446-1(e) before combining or separating
manufactured or processed IPIC pools and must combine or separate its
manufactured or processed IPIC pools in accordance with paragraph
(g)(2) of this section.
(ii) Pooling of goods a manufacturer or processor purchased for
resale. A manufacturer or processor electing to establish dollar-value
pools under paragraph (b)(4)(i) of this section and that is also
engaged, within the same trade or business, in wholesaling or retailing
goods purchased from others (resale), must establish pools for its
resale goods in accordance with paragraph (c)(2)(i) of this section. A
manufacturer or processor that must establish dollar-value pools for
resale goods under this paragraph (b)(4)(ii) may combine IPIC pools of
resale goods that comprise less than 5 percent of the total current-
year cost of all dollar-value pools for that trade or business to form
a single miscellaneous resale IPIC pool. The single miscellaneous
resale IPIC pool established pursuant to this paragraph (b)(4)(ii) may
not be combined with any other IPIC pool. This 5-percent rule is a
method of accounting. A taxpayer may not change to, or cease using,
this 5-percent rule without obtaining the Commissioner's prior consent.
Whether a specific resale IPIC pool satisfies the 5-percent rule must
be determined in the year of adoption or year of change, whichever is
applicable, and redetermined every third taxable year. Any change in
pooling required or permitted as a result of this 5-percent rule is a
change in method of accounting. A taxpayer must secure the consent of
the Commissioner pursuant to Sec. 1.446-1(e) before combining or
separating resale IPIC pools and must combine or separate its resale
IPIC pools in accordance with paragraph (g)(2) of this section.
(iii) No commingling of manufactured goods and resale goods within
a pool. Notwithstanding any other rule provided in paragraph (b) or (c)
of this section, a manufacturer or processor electing to establish
dollar-value pools under paragraph (b)(4)(i) of this section and that
is also engaged in retailing or wholesaling may not include
manufactured or processed goods in the same IPIC pool as goods
purchased for resale. Further, in applying the 5-percent rules
described in paragraphs (b)(4)(i) and (ii) of this section, a taxpayer
may not combine an IPIC pool of manufactured or processed goods that
comprises less than 5 percent of the total current-year cost of all
dollar-value pools for that trade or business with a resale IPIC pool
that comprises less than 5 percent of the total current-year cost of
all dollar-value pools for the purpose of forming a single
miscellaneous IPIC pool.
(iv) Examples. The rules of paragraph (b)(4) of this section may be
illustrated by the following examples:
Example 1. (i) Taxpayer is engaged in the trade or business of
manufacturing products A, B, and C. In order to cover temporary
shortages, Taxpayer also purchases a small quantity of identical
products for resale to customers. Taxpayer treats its manufacturing
and resale activities as a single trade or business. Taxpayer uses
the IPIC method described in paragraph (e)(3) of this section.
Pursuant to its election, Taxpayer establishes dollar-value pools
for the manufactured items under paragraph (b)(4)(i) of this
section, based on the 2-digit commodity codes in Table 9 of the PPI
Detailed Report. Taxpayer also establishes dollar-value pools for
the items purchased for resale under paragraph (b)(4)(ii) of this
section, based on the 2-digit commodity codes in Table 9 of the PPI
Detailed Report. Taxpayer does not choose to use the 5-percent rules
under paragraphs (b)(4)(i) and (ii) of this section.
(ii) Even though Taxpayer has manufactured items and resale
items that share the same 2-digit commodity codes,
[[Page 85454]]
under paragraph (b)(4)(iii) of this section, Taxpayer's manufactured
goods may not be included in the same IPIC pool as its goods
purchased for resale.
Example 2. (i) The facts are the same as in Example 1, except
Taxpayer establishes three IPIC pools for its manufacturing
activities and three IPIC pools for its resale activities. Further,
Taxpayer chooses to use the 5-percent rules of paragraphs (b)(4)(i)
and (ii) of this section. The percentage of total current-year cost
of each IPIC pool to the current-year cost of all dollar-value pools
for the trade or business is as follows:
------------------------------------------------------------------------
Percentage of
total current-year
cost of IPIC pool
to current-year
cost of all dollar-
value pools (%)
------------------------------------------------------------------------
Manufacturing Pools:
Pool A.......................................... 90
Pool B.......................................... 1
Pool C.......................................... 1
Resale Pools:
Pool D.......................................... 6
Pool E.......................................... 1
Pool F.......................................... 1
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
100
------------------------------------------------------------------------
(ii) For purposes of applying the 5-percent rules to Taxpayer's
manufacturing operations under paragraph (b)(4)(i) of this section,
because Pools B and C each comprise less than 5 percent of the total
current-year cost of all dollar-value pools, Pools B and C may be
combined to form a single miscellaneous pool of manufactured or
processed goods (new Pool G).
(iii) For purposes of applying the 5-percent rules to Taxpayer's
resale operations under paragraph (b)(4)(ii) of this section,
because Pools E and F each comprise less than 5 percent of the total
current-year cost of all dollar-value pools, Pools E and F may be
combined to form a single miscellaneous pool of resale goods (new
Pool H).
(iv) Because Pool G comprises less than 5 percent of the total
current-year cost of all dollar-value pools, under paragraph
(b)(4)(i) of this section, Pool G may be combined with Pool A, the
largest IPIC pool of manufactured goods.
(v) Although Pool H also comprises less than 5 percent of the
total current-year cost of all dollar-value pools, under paragraph
(b)(4)(ii) of this section, Pool H may not be combined with Pool A,
the largest pool of manufactured goods, or Pool D, the largest pool
of resale goods.
* * * * *
(c) * * *
(2) IPIC method pools--(i) In general. A retailer that elects to
use the inventory price index computation method described in paragraph
(e)(3) of this section (IPIC method) for a trade or business may elect
to establish dollar-value pools for those purchased items accounted for
using the IPIC method as provided in this paragraph (c)(2)(i) based on
either the general expenditure categories (that is, major groups) in
Table 3 (Consumer Price Index for all Urban Consumers (CPI-U): U.S.
city average, detailed expenditure categories) of the ``CPI Detailed
Report'' or the 2-digit commodity codes (that is, major commodity
groups) in Table 9 (formerly Table 6) (Producer price indexes and
percent changes for commodity and service groupings and individual
items, not seasonally adjusted) of the ``PPI Detailed Report.'' A
wholesaler, jobber, or distributor that elects to use the IPIC method
for a trade or business may elect to establish dollar-value pools for
any group of resale goods accounted for using the IPIC method based on
the 2-digit commodity codes (that is, major commodity groups) in Table
9 (Producer price indexes and percent changes for commodity and service
groupings and individual items, not seasonally adjusted) of the ``PPI
Detailed Report.'' The ``CPI Detailed Report'' and the ``PPI Detailed
Report'' are published monthly by the United States Bureau of Labor
Statistics (BLS) (available at https://www.bls.gov). A taxpayer electing
to establish dollar-value pools under this paragraph (c)(2)(i) may
combine IPIC pools of resale goods that comprise less than 5 percent of
the total current-year cost of all dollar-value pools for that trade or
business to form a single miscellaneous resale IPIC pool. A taxpayer
electing to establish pools under this paragraph (c)(2)(i) may combine
a miscellaneous resale IPIC pool that comprises less than 5 percent of
the total current-year cost of all dollar-value pools with the largest
resale IPIC pool. Each of these 5-percent rules is a method of
accounting. A taxpayer may not change to, or cease using, either 5-
percent rule without obtaining the Commissioner's prior consent.
Whether a specific resale IPIC pool or the miscellaneous resale IPIC
pool satisfies the applicable 5-percent rule must be determined in the
year of adoption or year of change, whichever is applicable, and
redetermined every third taxable year. Any change in pooling required
or permitted under a 5-percent rule is a change in method of
accounting. A taxpayer must secure the consent of the Commissioner
pursuant to Sec. 1.446-1(e) before combining or separating resale IPIC
pools and must combine or separate its resale IPIC pools in accordance
with paragraph (g)(2) of this section.
(ii) Pooling of manufactured or processed goods of a wholesaler,
retailer, jobber, or distributor. A wholesaler, retailer, jobber, or
distributor electing to establish dollar-value pools under paragraph
(c)(2)(i) of this section and that is also engaged, within the same
trade or business, in manufacturing or processing, must establish pools
for its manufactured or processed goods in accordance with paragraph
(b)(4)(i) of this section. A wholesaler, retailer, jobber, or
distributor that must establish dollar-value pools for manufactured or
processed goods under this paragraph (c)(2)(ii) may combine IPIC pools
of manufactured or processed goods that comprise less than 5 percent of
the total current-year cost of all dollar-value pools for that trade or
business to form a single miscellaneous manufactured or processed IPIC
pool. The single miscellaneous manufactured or processed IPIC pool
established pursuant to this paragraph (c)(2)(ii) may not be combined
with any other IPIC pool. This 5-percent rule is a method of
accounting. A taxpayer may not change to, or cease using, this 5-
percent rule without obtaining the Commissioner's prior consent.
Whether a specific manufactured or processed IPIC pool satisfies the 5-
percent rule must be determined in the year of adoption or year of
change, whichever is applicable, and redetermined every third taxable
year. Any change in pooling required or permitted as a result of a 5-
percent rule is a change in method of accounting. A taxpayer must
secure the consent of the Commissioner pursuant to Sec. 1.446-1(e)
before combining or separating manufactured or processed IPIC pools and
must combine or separate its manufactured or processed IPIC pools in
accordance with paragraph (g)(2) of this section.
(iii) No commingling of manufactured goods and purchased goods
within a pool. Notwithstanding any other rule provided in paragraph (b)
or (c) of this section, a wholesaler, retailer, jobber, or distributor
electing to establish dollar-value pools under paragraph (c)(2)(i) of
this section and that is also engaged in manufacturing or processing
may not include manufactured or processed goods in the same IPIC pool
as goods purchased for resale. Further, in applying the 5-percent rules
described in paragraphs (c)(2)(i) and (ii) of this section, a taxpayer
may not combine an IPIC pool of manufactured or processed goods that
comprises less than 5 percent of the total current-year cost of all
dollar-value pools with a resale IPIC pool that comprises less than 5
percent of the total current-year cost of all dollar-value pools for
purposes of forming a single miscellaneous IPIC pool.
(iv) Examples. The rules of paragraph (c)(2) of this section may be
illustrated by the following examples:
[[Page 85455]]
Example 1. (i) Taxpayer is engaged in the trade or business of
wholesaling products A, B, and C. Taxpayer also manufactures a small
quantity of identical products for sale to customers. Taxpayer
treats its wholesaling and manufacturing activities as a single
trade or business. Taxpayer uses the IPIC method described in
paragraph (e)(3) of this section. Pursuant to its election, Taxpayer
establishes dollar-value pools for the wholesale items purchased for
resale under paragraph (c)(2)(i) of this section, based on the 2-
digit commodity codes in Table 9 of the PPI Detailed Report.
Taxpayer also establishes dollar-value pools for the manufactured
items under paragraph (c)(2)(ii) of this section, based on the 2-
digit commodity codes in Table 9 of the PPI Detailed Report.
Taxpayer does not choose to use the 5-percent rules under paragraphs
(c)(2)(i) and (ii) of this section.
(ii) Even though Taxpayer has resale and manufactured items that
share the same 2-digit commodity codes, under paragraph (c)(2)(iii)
of this section, Taxpayer's resale goods may not be included in the
same IPIC pool as its manufactured goods.
Example 2.(i) The facts are the same as in Example 1, except
Taxpayer establishes three IPIC pools for its wholesale activities
and three IPIC pools for its manufacturing activities. Further,
Taxpayer chooses to use the 5-percent rules of paragraphs (c)(2)(i)
and (ii) of this section. The percentage of total current-year cost
of each IPIC pool to the current-year cost of all dollar-value pools
for the trade or business is as follows:
------------------------------------------------------------------------
Percentage of
total current-year
cost of IPIC pool
to current-year
cost of all dollar-
value pools (%)
------------------------------------------------------------------------
Wholesaling Pools:
Pool J.......................................... 90
Pool K.......................................... 1
Pool L.......................................... 1
Manufacturing Pools:
Pool M.......................................... 6
Pool N.......................................... 1
Pool O.......................................... 1
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
100
------------------------------------------------------------------------
(ii) For purposes of applying the 5-percent rules to Taxpayer's
wholesaling operations under paragraph (c)(2)(i) of this section,
because Pools K and Pool L each comprise less than 5 percent of the
total current-year cost of all dollar-value pools, Pools K and L may
be combined to form a single miscellaneous pool of wholesale goods
(new Pool P).
(iii) For purposes of applying the 5-percent rules to Taxpayer's
manufacturing operations under paragraph (c)(2)(ii) of this section,
because Pools N and O each comprise less than 5 percent of the total
current-year cost of all dollar-value pools, Pools N and O may be
combined to form a single miscellaneous pool of manufactured goods
(new Pool Q).
(iv) Because Pool P comprises less than 5 percent of the total
current-year cost of all dollar-value pools, under paragraph
(c)(2)(i) of this section, Pool P may be combined with Pool J, the
largest IPIC pool of resale goods.
(v) Although Pool Q also comprises less than 5 percent of the
total current-year cost of all dollar-value pools, under paragraph
(c)(2)(ii) of this section, Pool Q may not be combined with Pool J,
the largest pool of resale goods, or Pool M, the largest pool of
manufactured goods.
* * * * *
(e) * * *
(3) * * *
(ii) Eligibility. Any taxpayer electing to use the dollar-value
LIFO method may elect to use the IPIC method. Except as provided in
other published guidance, a taxpayer that elects to use the IPIC method
for a specific trade or business must use that method to account for
all items of dollar-value LIFO inventory.
* * * * *
(v) Effective/applicability date. The rules of this paragraph
(e)(3) and paragraphs (b)(4) and (c)(2) of this section are applicable
for taxable years ending on or after the date the Treasury decision
adopting these rules as final regulations is published in the Federal
Register.
* * * * *
John Dalrymple,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2016-28375 Filed 11-25-16; 8:45 am]
BILLING CODE 4830-01-P