IRS Again Says Sec. 179 Elections Can Be Made on Amended Returns For Tax Years Beginning Before 2011
To erase any doubt on the matter, and confirming the point we have been making on this issue, the Chief Counsel's Office of IRS, in an Information Letter dated February 17, 2009, has stated that Section 7 of Rev. Proc. 2008-54, 2008-38, I.R.B. 722 provides for Sec. 179 revocations as well as elections without the Commissioner's consent, and before the issuance of Treasury Regulations on the matter. The letter notes that Rev. Proc. 2008-54 provides that for any tax year beginning after 2007 and before the last year provided in Sec. 179(c)(2) for revoking a Sec. 179 election by a taxpayer with respect to any Sec. 179 property, the taxpayer will be permitted to make a Sec. 179 election without the Commissioner's consent on an amended tax return for that taxable year. The Rev. Proc. also points out that taxpayer can rely on the guidance specified in section 7 until Treas. Reg. Sec. 1.179-5(c) is amended to account for the statutory change made in 2005 which extended the rules for revoking a Sec. 179 election for tax years beginning before 2008 to tax years beginning before 2011. The Information Letter concludes, "...a taxpayer is permitted to make a section 179 election without the Commissioner's consent on an amended federal tax return for a taxable year beginning after 2007 and before 2011..." Chief Counsel Information Letter, GENIN-141682-08 (Feb. 17, 2009).
As we have repeated continuously on this issue since 2007, the ability to make and revoke a Sec. 179 election on an amended return provides tremendous planning flexibility with respect to asset acquisitions and dispositions.