SECTION 3. REQUEST FOR

COMMENT ON DE MINIMIS SAFE HARBOR LIMIT

.01 Under § 1.263(a)–1(f)(3)(iv), an amount paid for property to which a taxpayer properly applies the de minimis safe harbor is not treated as a capital expenditure or material or supply and may be deducted under § 162, provided the amount otherwise constitutes an ordinary and necessary business expense. Under § 1.263(a)–1(f)(1)(ii)(D), a taxpayer without an AFS may elect to apply the de minimis safe harbor if, among other things, the amount paid for the property subject to the de minimis safe harbor does not exceed $500 per invoice (or per item as substantiated by the invoice) or other amount as identified in published guidance issued by the Treasury Department and the IRS.

.02 The de minimis safe harbor provided in the final tangible property regulations is intended as a new administrative convenience whereby taxpayers are permitted to deduct small dollar expenditures for the acquisition or production of new property or for the improvement of existing property, which otherwise must be capitalized under the Code. The de minimis safe harbor does not limit a taxpayer’s ability to deduct otherwise deductible repair or maintenance costs that exceed the amount subject to the safe harbor. The safe harbor merely establishes a minimum threshold below which all qualifying amounts are considered deductible. Consistent with longstanding law, a taxpayer may continue to deduct all otherwise deductible repair or maintenance costs, regardless of amount. In addition, the existence of the de minimis safe harbor does not mean that a taxpayer cannot establish a de minimis deduction threshold in excess of the safe harbor amount, provided the taxpayer can demonstrate that a higher threshold clearly reflects the taxpayer’s income. In conjunction with section 179, which also allows small business taxpayers to immediately expense certain otherwise capital expenditures, the de minimis safe harbor provides significant tax simplification to small businesses.

Bulletin No. 2015–9 695 March 2, 2015

.03 The Treasury Department and the IRS request written comments by April 21, 2015 on whether it is appropriate to increase the de minimis safe harbor limit provided in § 1.263(a)–1(f)(1)(ii)(D) for a taxpayer without an AFS to an amount greater than $500, and, if so, what amount should be used and what is the justification for that amount. Comments should refer to Rev. Proc. 2015–20, and should be submitted to:

Internal Revenue Service Attn: CC:PA:LPD:PR (Rev. Proc. 2015–20), Room 5203 P. O. Box 7604 Ben Franklin Station Washington, DC 20044

Comments also may be hand delivered Monday through Friday between the hours of 8 am and 4 pm to CC:PA:LPD:PR (Rev. Proc. 2015–20) Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, N.W. Washington, D.C. Alternatively, comments may be submitted electronically directly to the IRS via the following e-mail address:

Notice.Comments@irscounsel.treas.gov. Please include “Rev. Proc. 2015–20” in the subject line of any electronic communication. All comments will be available for public inspection and copying.