McLEAN, Va. -

The National Automobile Dealers Association described a recent decision by the Internal Revenue Service as a “major victory for car and truck dealers.”

NADA shared Wednesday that the IRS has created uniform capitalization safe harbor methods of accounting. The association thinks these methods should favorably resolve several contentious and potentially costly income tax issues that have arisen during IRS audits of franchised dealers during the past five years.

According to the association, what the IRS has created with these new safe harbor methods is generally allowing car and truck dealers to be classified as retailers who are not required to capitalize handling, storage or production costs incurred at their retail sales facilities

Officials stated numerous meetings between NADA and the IRS led to the resolving of this ongoing dealer problem. A brief summary of the new safe harbor methods has been posted at www.nada.org/regulations.

In addition, the association plans to host a Webinar on these new procedures with IRS motor vehicle technical adviser Terri Harris and NADA outside tax consultant and former IRS motor vehicle industry specialist Bob Zwiers on Nov. 30 at 1 p.m. (EST). NADA said registration details are to be announced later.

“Dealers are encouraged to consult with their tax professionals concerning this significant development,” NADA officials stated.