IRS Practice Unit: LIFO Conformity of U.S. Controlled Foreign Subsidiaries (IRC §472)

Examining LIFO conformity for U.S. corporations with controlled foreign subsidiaries (CFS) using LIFO, the IRS Large Business and International Concept Unit outlined in a practice unit released July 14. A U.S. CFS must use the LIFO method for valuing inventory on its financial statements to use the LIFO method for valuing inventory on its U.S. income tax return, the IRS noted. Tax code Section 472(g) requires conformity between financial statement and federal income tax reporting. The United States and Japan are the only countries whose governments permit taxpayers to use LIFO for financial statement reporting. Other countries have adopted the ...