Issues under proposed de minimis rule for expensing tangible property

Historically, many taxpayers have expensed the cost of tangible property that they acquired, produced, or improved if the property's cost was less than a certain dollar threshold (the de minimis rule). These taxpayers generally determined their threshold amount by conforming to their financial accounting policy for expensing assets. However, because of a desire for increased certainty and uniformity among taxpayers, taxpayers requested that the government provide guidance that specifically included a de minimis rule for federal income tax purposes. As a result, the IRS began considering whether a de minimis rule was appropriate. The new 2008 proposed regulations provide a de minimis rule for the acquisition or production of tangible property. Based on commentators' responses to the 2006 proposed regulations, a de minimis rule is a step in the right direction in providing taxpayers the certainty required in today's regulatory environment. However, the 2008 proposed regulations may not succeed fully in meeting the goal of reducing burdens and achieving certainty.