New Regs for the Domestic Production Deduction

CD of Live 90-Minute Telephone Conference with an Interactive Q&A Session Conducted on November 8, 2005 Now available on CD

On October 20, 2005, the IRS issued long-awaited regulations explaining the terms under which U.S. companies can claim the federal Sect. 199 domestic production activities deduction.

After nearly a year of operating under temporary IRS guidance, corporate taxpayers will be able to react to and plan around detailed regulations. However, the new regs might well translate into millions of dollars gained or lost when put into practice by companies.

Listen as our panel of veteran federal tax advisors – each an expert with Sect. 199, the American Jobs Creation Act of 2004, and the domestic production activities deduction – guide you through the new IRS regulations.

They will explain each key passage and offer their best insights on how your company can capitalize on the IRS standards:

• What constitutes qualified production activities income and how to calculate it on an item-by-item basis.
• How to distinguish domestic from foreign gross receipts and how you may be able to leverage the government’s safe harbor provisions.
• Which wages paid by your company, by related entities and by businesses you’ve acquired count toward the federal deduction – and which will be denied despite your best arguments.
• What business activities will fall victim to the IRS’ standards for insubstantial packaging, labeling and assembly (whose costs don’t count toward the deduction).
• When pass-through entities used by your company can leverage Sect. 199.

Our panelists include:

• David Auclair, Principal and Federal Tax Accounting Practice Leader, Grant Thornton, Washington DC, specializes in tax accounting issues. He was previously with Arthur Andersen’s National Tax Office and served in the IRS National Office as a technical expert on income tax and accounting issues.
• Ed McClellan, Partner in the Federal Tax and Legislative Policy Practice, Alston & Bird, Washington DC. Until recently, he was senior policy advisor on tax issues to the chairmen of the U.S. Senate Finance Committee, making him lead counsel on the development of the Jobs Act.
• Jan Skelton, Principal in the Federal Tax Practice, Deloitte & Touche, Washington DC, focuses on capitalization, timing of income and deductions, inventories, and other accounting method issues. She was previously with the IRS Office of Chief Counsel in the Income Tax and Accounting Division.

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