Senator Pressed IRS to Ease Tax Burden on Small Businesses, Family Farms
WASHINGTON – December 11, 2015 – (RealEstateRama) — Senator John Hoeven today announced that the Internal Revenue Service (IRS) has agreed to raise the safe harbor threshold for expensing the purchase, acquisition or improvement of tangible property from $500 to $2,500 for many small businesses and family-owned farms and ranches. The change will ease the compliance burden for taxpayers who do not maintain applicable financial statements and would have otherwise faced complex capitalization rules for many basic, common purchases, such as machinery and equipment parts, computers and smart phones. The senator has been pressing the IRS in letters and conversations since January of 2014 to revise the unfair and onerous expensing regulations. The revised threshold takes effect on January 1st, 2016.
“The IRS’ new regulations would have adversely affected small businesses, farmers and ranchers in North Dakota and across the country,” Hoeven said. “This revision is welcome relief for our small businesses, who account for about two-thirds of new jobs and represent about 55 percent of private employment in the U.S. We continue working to ensure that IRS regulations are workable in the real world, protecting our small businesses from burdensome costs, both in terms of time and money.”
Hoeven heard from many tax professionals and constituents in North Dakota about the serious, negative consequences the new rule would have for small businesses in the state. The senator continues his efforts to ensure this and other IRS rules reflect the real-world costs and challenges faced by farmers, ranchers and small business owners. Accordingly, Hoeven is working to extend the $500,000 limitation for Section 179 expensing before year-end while also pressing for a permanent solution, which will provide greater certainty for a wide variety of small businesses as they plan their taxes and equipment purchases.