IRS practice unit: Last in-first out (LIFO) records

IRS practice unit: Last in-first out (LIFO) records

The IRS Large Business and International (LB&I) division publicly released a “practice unit”—part of a series of IRS examiner “job aides” and training materials intended to describe for IRS agents leading practices about tax concepts in general and specific types of transactions.

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The title of this “concept unit” (as referred to by the IRS) is: LIFO records

As noted by the IRS, the taxpayer must maintain historic LIFO inventory records to verify the current value of its LIFO inventory. The regulations require the taxpayer to maintain historic records, but do not specifically identify or define what records the taxpayer must maintain. The LIFO computational methodology sheds light on the type of information necessary for the examiner to verify the appropriateness of the inventory valuation.

Read the concept unit on the IRS practice unit webpage (posting date of January 28, 2021).

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