Get Revenue Procedure 2005-28 - Switching From The Fair Market Value Method To The Alternative Tax Book

This revenue procedure allows taxpayers a limited deferral beyond the taxable year of receipt for certain advance payments.

A taxpayer chooses a method of accounting in the first year the taxpayer reflects the item on a tax return. Once a taxpayer adopts a method of accounting for an item, it cannot change the method, even from an impermissible one, without the Commissioner's consent. See IRC 446(e).

A Substitute for Return (SFR) is a tax return that the IRS will prepare on behalf on its own for the non-filing taxpayer, usually about 2 years after the original tax return would have been due. This tax return is usually prepared in an automated fashion.

The automated substitute for return unit is a division of the IRS that enforces the requirement to file tax returns. If you don't file a return that you were supposed to, this unit can figure the amount of taxes you owe based on the information it has, and file a substitute for return (SFR) for you.

This is called a substitute for return (SFR), and it almost always shows a larger tax liability than you owe. The IRS generates these returns so that it can start the collection process. The IRS cannot collect taxes that haven't been assessed, and the SFR kicks off the assessment process.

The alternative tax book value method, as set forth in §1.861-9(i), allows a taxpayer to elect to determine the tax book value of its tangible property that is subject to depreciation under section 168 of the Internal Revenue Code (Code) as though all such property had been depreciated using the alternative ...

liability.2 This is principally worked through the Automated Substitute for Return (ASFR) program, the. IRS's key program for enforcing filing compliance on taxpayers who have not filed individual income tax. returns but appear to owe a tax liability.3.