Description

IRS Tax Audit Manual for the Hardwood Timber Industry 

Provides general and technical information useful to examiners in classifying, Hardwood Timber Industry.

TABLE OF CONTENTS

• Chapter 1
  • Introduction to the Timber Industry
  • Differences between Softwood and
  • Hardwood Regions 1-1
  • Hardwood Lumber Products and
  • By-Products 1-1
  • Vertical Integration of the Hardwood
  • Timber Industry 1-5
• Chapter 2
  • Compliance and Audit Issues
  • Methodology/Return Analysis 2-1
  • Forest Activities Schedule (Form T) 2-2
  • Schedule A – Maps 2-2
  • Schedule B – Acquisitions 2-2
  • Schedule C – Profit or Loss from Land
  • and Timber Sales 2-3
  • Schedule D – Losses 2-4
  • Schedule E – Reforestation and Timber
  • Stand Improvement 2-4
  • Schedule F – Capital Returnable
  • Through Depletion 2-5
  • Schedule G – Land Ownership 2-5
  • Schedule H – Road Construction 2-5
  • Schedule I – Drainage Structures 2-5
  • Examination Techniques 2-6
  • Compliance 2000 Opportunities 2-9
• Chapter 3
  • Income Taxation of Timber Operations
  • Timber Income 3-1
  • Timber Expenses 3-2
  • Capital Expenditures 3-2
  • The Land Account 3-3
  • The Timber Account 3-4
  • The Plantation Sub-Account 3-4
  • The Equipment Account 3-5
  • Operating Expenses 3-5
  • Selling Expenses 3-6
  • Establishing Cost or Basis 3-6
• Chapter 4
  • Basis in Gifts and Inherited Property 4-1
• Chapter 5
  • Employment Taxes Overview 5-1
  • Who Are Employees? 5-3
  • Statutory Employees 5-4
  • Saw Rents 5-6
  • Skidder Rentals 5-8
• Chapter 6
  • Excise Taxes Overview 6-1
  • Computation – Excise Tax 6-3
  • Filing Form 2290 6-4
  • Fuel Tax Credits and Refunds 6-5
  • Claiming the Credit 6-6
  • Claiming the Refund 6-6
  • Significant Audit Issues 6-6
• Chapter 7
  • Other Considerations Reforestation
  • Tax Incentives 7-1
  • Other Forestry Incentives 7-2
  • Use of Specialty Groups 7-2
  • Engineering 7-2
  • Computer Audit Specialist (CAS) 7-2
  • International Examiner 7-2
  • Employment tax Specialists 7-2
  • Penalties 7-3
  • Coordinated Issues 7-3
• Chapter 8
  • Selected Timber Rulings and
  • Court Cases Access Roads 8-1
  • Advance Royalties 8-1
  • Capital Assets 8-1
  • Capital Gain Versus Ordinary Income 8-2
  • Contract Cutting 8-3
  • Date of Felling 8-4
  • Insects 8-4
  • IRC Section 631(a) 8-4
  • Stewardship Incentive Program 8-5
• Bibliography B-1
• Glossary G-1
  • Preplanning and examining returns relating to this industry