Fillable Form 970 - Application To Use Lifo Inventory Method (Page 4 of 4) in pdf

Page

Form 970 (Rev. 11-2012)

Line 19. Manufacturers, processors, wholesalers, jobbers, and

maintain a separate inventory pool for items in each major

category in the applicable Government price index, and that the

distributors must select BLS price indexes from Table 6 of the

taxpayer make adjustments to each separate pool based on

PPI Detailed Report, unless the taxpayer can demonstrate that

changes from the preceding tax year in the component of such

selecting BLS price indexes from another table of the PPI

index for the major category. A qualified taxpayer does not need

Detailed Report is more appropriate. Retailers can select BLS

IRS consent to elect these provisions. The election is in effect

price indexes from either Table 3 of the CPI Detailed Report or

for the first year the election is made and for each succeeding

from Table 6 (or another more appropriate table) of the PPI

Detailed Report.

year the taxpayer qualifies as an eligible small business. The

election can be revoked only with IRS consent.

Line 20. See Regulations section 1.472-8(e)(3)(iii)(C)(2) for a

The simplified dollar-value method requires that general

description of the 10 percent method.

categories of inventory pools be established. The general

Line 21. See Regulations section 1.472-8(e)(3)(iii)(B)(3) before

categories are based on categories of inventory items

completing line 21.

contained in the PPI Detailed Report or the CPI Detailed

Part VI—Other Information

Report. See section 474 and Regulations section 1.472-8 for

more details.

Line 23. If you filed Form 3115, Application for Change in

Accounting Method, and received IRS consent to change your

Line 16. Generally, you can only use the double-extension

method of valuing inventories for the tax year specified on line

method or the inventory price index computation method. See

1, do not attach a copy of the approval letter (consent

Regulations sections 1.472-8(e)(2) and 1.472-8(e)(3) for a

agreement). Retain a copy of the letter for your records.

description of these methods. However, if you use the link-

chain, index, or “other” method, attach a detailed statement

Paperwork Reduction Act Notice. We ask for the information

explaining how the method is justified under Regulations section

1.472-8(e)(1). In addition, if you use a link-chain method, your

on this form to carry out the Internal Revenue laws of the United

statement should explain why the nature of the pool makes the

States. You are required to give us the information. We need it

double-extension or index method impractical or unsuitable.

to ensure that you are complying with these laws and to allow

us to figure and collect the right amount of tax.

New Vehicle Alternative LIFO Inventory Method.

You are not required to provide the information requested on

Automobile dealers engaged in the trade or business of retail

sales of new automobiles or new light-duty trucks can adopt or

a form that is subject to the Paperwork Reduction Act unless

use the New Vehicle Alternative LIFO Inventory Method under

the form displays a valid OMB control number. Books or

Rev. Proc. 97-36, 1997-2 C.B. 450, as modified by Rev. Proc.

records relating to a form or its instructions must be retained as

long as their contents may become material in the

2008-23, 2008-12 I.R.B. 664, or its succesor. A new automobile

administration of any Internal Revenue law. Generally, tax

dealer who previously elected this method under Rev. Proc.

92-79, 1992-2 C.B. 457 is not required to change its method of

returns and return information are confidential, as required by

accounting to comply with Rev. Proc. 97-36. For information on

section 6103.

accounting method changes to this method, see section 22.03

The time needed to complete and file this form and related

in the Appendix of Rev. Proc. 2011-14, 2011-4 I.R.B. 330, or its

schedules will vary depending on individual circumstances. The

successor.

estimated burden for individual taxpayers filing this form is

Used Vehicle Alternative LIFO Inventory Method.

approved under OMB control number 1545-0074 and is

Automobile dealers engaged in the trade or business of retail

included in the estimates shown in the instructions for their

sales of used automobiles or used light-duty trucks can adopt

individual income tax return. The estimated burden for all other

taxpayers who file this form is shown below.

or use the Used Vehicle Alternative LIFO Inventory Method as

described in Rev. Proc. 2001-23, 2001-10 I.R.B. 784, as

Recordkeeping

8 hr., 36 min.

modified by Announcement 2004-16, 2004-1 I.R.B. 668, and

Learning about the law or the form .

1 hr., 47 min.

Rev. Proc. 2008-23, or its successor. For information on

Preparing and sending the form to the IRS .

. 2 hr., 0 min.

accounting method changes to this method, see section 22.04

If you have comments concerning the accuracy of these time

in the Appendix of Rev. Proc. 2011-14, or its successor, and

estimates or suggestions for making this form and related

change number 59 in the List of Automatic Accounting Method

schedules simpler, we would be happy to hear from you. See

Changes in the Instructions for Form 3115.

the instructions for the tax return with which this form is filed.

Line 17. See Regulations section 1.472-8(e)(2) for more

information.

Part V—Inventory Price Index Computation

(IPIC) Method

Line 18. See Regulations section 1.472-8(e)(3)(iii)(E) for a

description of the double-extension and link-chain IPIC

methods, including examples. The use of either of these IPIC

methods is a method of accounting. For information on

accounting method changes to or within an IPIC method, see

change numbers 61 and 62 in the List of Automatic Accounting

Method Changes in the Instructions for Form 3115.

Form 970 - Application To Use Lifo Inventory Method Page 4

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