Part IV. Items — Internal Revenue Bulletin 2013-4

Guidance Regarding Deduction and Capitalization of Expenditures Related to Tangible Property; Corrections

Announcement 2013–4

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendments.

SUMMARY: This document contains correcting amendments to the temporary regulations (T.D. 9564, 2012–14 I.R.B. 614), which were published in the Federal Register on Tuesday, December 27, 2011, relating to guidance regarding deduction and capitalization of expenditures related to tangible property. These amendments revise the general asset account regulations to provide the time and manner of making a general asset account election. The amendatory instructions of T.D. 9564 inadvertently redesignated paragraphs (m)(2) and (m)(3) for the general asset account regulations as in effect before T.D. 9564 as paragraphs (l)(2) and (l)(3) for the general asset account regulations as amended by T.D. 9564. These correcting amendments will affect all taxpayers that make a general asset account election.

DATES: These amendments are effective December 19, 2012.

FOR FURTHER INFORMATION CONTACT: Kathleen Reed or Patrick Clinton, Office Associate Chief Counsel (Income Tax & Accounting), (202) 622–4930 (not a toll-free call).

SUPPLEMENTARY INFORMATION:

Background

The regulations that are the subject of these corrections are under section 168 of the Internal Revenue Code.

Need for Correction

As published on December 27, 2011 (76 FR 81060), T.D. 9564 contains errors which may prove to be misleading and are in need of clarification.

- - - -

Correction of Publication

Accordingly, 26 CFR Part 1 is amended by making the following correcting amendments.

PART 1—INCOME TAXES

Paragraph 1. The authority citation for part 1 continues to read as follows:

Authority: 26 U.S.C. 7805 * * * Section 1.168(i)–1 also issued under 26 U.S.C. 168(i)(4). - * * Par. 2. Section 1.168(i)–0 is amended by revising the entry in the table of contents for paragraph (m) of § 1.168(i)–1 to read as follows:

§ 1.168(i)–0 Table of contents for the general asset account rules .

§ 1.168(i)–1 General asset accounts .

- - - (m) [Reserved]. For further guidance, see the entry for § 1.168(i)–1T(m).

Par. 3. Section 1.168(i)–1 is amended by revising paragraphs (l)(2) and (l)(3) to read as follows:

§ 1.168(i)–1 General asset accounts .

- - - (l) - - (2) Time for making election . The election to apply this section shall be made on the taxpayer’s timely filed (including extensions) income tax return for the taxable year in which the assets included in the general asset account are placed in service by the taxpayer.

(3) Manner of making election . In the year of election, a taxpayer makes the election under this section by typing or legibly printing at the top of the Form 4562, “GENERAL ASSET ACCOUNT ELECTION MADE UNDER SECTION 168(i)(4),” or in the manner provided for on Form 4562 and its instructions. The taxpayer shall maintain records (for example, “General Asset Account #1—all 1995 additions in asset class 00.11 for Salt Lake City, Utah facility”) that identify

the assets included in each general asset account, that establish the unadjusted depreciable basis and depreciation reserve of the general asset account, and that reflect the amount realized during the taxable year upon dispositions from each general asset account. (But see section 179(c) and § 1.179–5 for the recordkeeping requirements for section 179 property.) The taxpayer’s recordkeeping practices should be consistently applied to the general asset accounts. If Form 4562 is revised or renumbered, any reference in this section to that form shall be treated as a reference to the revised or renumbered form.

Guy R. Traynor, Federal Register Liaison, Publication & Regulations Branch,

Legal Processing Division,

Associate Chief Counsel Procedure & Administration.

(Filed by the Office of the Federal Register on December 18, 2012, 8:45 a.m., and published in the issue of the Federal Register for December 19, 2012, 77 F.R. 75016)

Recommendations for Proposed e-signature Standards

Announcement 2013–8

The IRS is seeking recommendations for electronic signature (e-signature) standards.

Background

The IRS has supported the use of e-signatures on tax forms, statements, applications, information requests, and similar transactions. However, the IRS has never established a formal set of e-signature standards for the tax industry. E-signature standards will impact tax return preparers, taxpayers, business owners, and other stakeholders. The e-signature process benefits each of these groups and the IRS because it promotes efficiency, reduces burden and improves identity proofing methods to confirm the identity of the signer.

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announcement number in the subject line of your email.

Correction to the Schedule of User Fees Found in Appendix A of Revenue Procedure 2013–1

Announcement 2013–9

This announcement addresses a typographical error in the Schedule of User Fees found in Appendix A of Revenue Procedure 2013–1, 2013–1 I.R.B. 1, wherein the reduced user fee for a letter ruling, method or period change or closing agreement request involving a personal or business tax issue from a person with gross income of less than $250,000 was incorrectly listed as $1,000, when the correct reduced fee for this type of request is $2,000. Accordingly, the user fee associated with paragraph (4)(a) in Appendix A, Schedule of User Fees of Revenue Procedure 2013–1, 2013–1 I.R.B. 68, is $2,000. The online versions of Internal Revenue Bulletin 2013-1, available at www.irs.gov/irb/, will be updated to reflect this correction.

The Service will provide relief for taxpayers who submitted ruling requests that otherwise meet the requirements for a reduced user fee under paragraph (4)(a) of Appendix A, Revenue Procedure 2013–1, accompanied by a fee of $1,000 in reliance on the erroneous information in Rev. Proc. 2013–1. For those taxpayers the Service will not require the payment of an additional $1,000. The Service will not, however, refund user fees to those taxpayers who submitted the correct fee of $2,000 with their initial filing. This relief applies only to requests received by the Service prior to February 1, 2013. For all such requests received on or after February 1, 2013, the correct user fee of $2,000 will be required.

Effect on Other Documents

Revenue Procedure 2013-1, 2013-1 I.R.B. 1, is corrected.

The principal author of this announcement is Melissa A. Jarboe of the Office of Associate Chief Counsel (Procedure & Administration). For further information regarding this announcement, contact

Efforts to develop e-signature standards

The IRS previously created work groups to study and advance e-signature alternatives, develop standards and business requirements, and identify industry best practices. In addition, the IRS has provided e-signature alternatives to industry partners and taxpayers on an ad hoc basis, including options based on signature requirements for electronic documents from the Restructuring and Reform Act of 1998 (RRA 98). More recently, IRS expanded the use of alternative signatures to include IRS issued Personal Identification Numbers (PINs), self-select PINs, individual identification information, and a number of other techniques. IRS has approved various signature methods based on their legal acceptability and appropriateness for specific transactions.

These options enable the IRS to expand its capabilities for receiving and storing electronic transactions using various types of electronic media. In order to provide improved customer service and thereby increase adoption of electronic filing, the IRS continues to explore and evaluate new e-signature technologies that are potentially suitable for all types of electronic communications.

Currently, the IRS has a review process in place for the approval of alternative signature methods. The use of e-signatures on IRS forms is approved on an ad hoc basis. If an e-signature proposal is approved, the IRS implements the appropriate policy change(s). Also, pilots have been conducted on specific IRS form types and transactions, specifically Form 4506-T ( Request for Copy of Tax Return Tran- script ), Form 8879 ( IRS e-file Signature Authorization ), and Form 8655 ( Report- ing Agent Authorization ) using signature methods such as a PIN, click-through, tablet PCs, a digital signature, and the electronic signature pad.

Approval of e-signature methods on an ad hoc basis and the testing and subsequent approval of pilots have been successful; however, the IRS needs to implement consistent standards for IRS partners and external stakeholders.

Request for recommendations

As a foundation, IRS proposes establishing five core signing requirements:

A person ( i.e., the signer) must use an acceptable electronic form of signature;
The electronic form of signature must be executed or adopted by a person with the intent to sign the electronic record, ( e.g., to indicate a person’s approval of the information contained in the electronic record),
The electronic form of signature must be attached to or associated with the electronic record being signed;
There must be a means to identify and authenticate a particular person as the signer; and
There must be a means to preserve the integrity of the signed record.

The signing requirements set forth above are similar to requirements implemented under both the Government Paperwork Elimination Act (GPEA) and the Electronic Signatures in Global and National Commerce Act (E-SIGN). Adopting these signing requirements would create consistency for IRS partners and external stakeholders, and promote efficiency regarding the use of e-signatures. In addition, adopting the standards would improve e-authentication and deter identity theft.

Before adopting these core requirements, the IRS requests recommendations from the public on these related issues:

Acceptable standards for use of an e-signature on transactions and forms based on the five core signing requirements listed above
How to accomplish the e-signature requirements which satisfy GPEA and E-SIGN
Requirements for creating a legally binding e-signature in electronic transactions
Factors the IRS should consider when deciding which signing process to use
How to apply e-signature standards for remote transactions on IRS forms which are not required to be sent to the IRS
Industry best practices for IRS consideration

How to submit recommendations

All recommendations/comments should be submitted electronically to esignature@irs.gov on or before March 1, 2013. Please include the IRB

2013–4 I.R.B. 441 January 22, 2013

Melissa A. Jarboe at (202) 622–3620 or George Bowden at (202) 622–3400 (not toll-free numbers).

January 22, 2013 442 2013–4 I.R.B.