Adrian JohnsonTLDR:
– Department of Justice says an Arkansas firm cannot change its accounting method without IRS approval
– Conmac Investments Inc. started claiming amortization deductions without permission in 2009
– The DOJ argues that this constituted a change in accounting method and could lead to tax complications
– The Eleventh Circuit should uphold the ruling against Conmac
In a recent brief filed by the Department of Justice, it was stated that Conmac Investments Inc., a company that owns and leases farms in Arkansas, wrongly began claiming amortization deductions on its tax returns in 2009 without obtaining approval from the IRS. The DOJ argued that this action constituted a change in accounting method, which requires permission from the IRS. Conmac had sued the IRS in 2018 in an attempt to reverse this decision, but the DOJ is urging the Eleventh Circuit to uphold the ruling that prevents Conmac from claiming these deductions without proper approval.
It is important for businesses to follow proper accounting procedures and obtain necessary approvals to avoid potential tax complications in the future. This case highlights the importance of complying with IRS regulations when making changes to accounting methods.
