INDEX OF ARTICLES - De Filippsdefilipps.com/wp-content/uploads/2017/08/DTWIndexof...INDEX OF...

INDEX OF ARTICLES

JUNE, 1994 - DECEMBER, 2012 I. ACCOUNTING & TAX ISSUES II. UNICAP - UNIFORM INVENTORY COST CAPITALIZATION REQUIREMENTS (SEC. 263A)

III. USED VEHICLES & BUY-HERE, PAY-HERE (BHPH) DEALERS

IV. GENERAL TAX PLANNING FOR DEALERS & DEALERSHIPS

V. TIMELINES & PRACTICE GUIDES

VI. AUTO DEALER INDUSTRY & DEALER-MANUFACTURER (FACTORY) ISSUES

VII. IRS ACTION, AUDIT ACTIVITY & AUDIT TECHNIQUE GUIDES

VIII. CONFERENCE - CONVENTION - SEMINAR (PRESENTATION) SUMMARIES

IX. FINDING LISTS … CASES, IRS DOCUMENTS & PUBLICATIONS, LEGISLATION

X. OTHER RESOURCES & REFERENCES

WILLARD J. DE FILIPPS, CPA

Willard J. De Filipps, CPA, PC 317 West Prospect Avenue

Mt. Prospect, Illinois 60056 Phone (847) 577-3977 Fax (847) 577-1073

www.defilipps.com

DEALER TAX WATCH

INDEX OF ARTICLES: JUNE, 1994 - DECEMBER, 2012

PAGE 2

I. ACCOUNTING & TAX ISSUES

Accounting Software & IRS Electronic Recordkeeping Requirements (Rev. Proc. 98-25) ................................. 8 Advertising Association Payments ....................................................................................................................... 8 Aircraft .................................................................................................................................................................. 8 Bad Debt Deduction Write-Offs ........................................................................................................................... 9 Buy-Sell Agreements & Allocations..................................................................................................................... 9 Capitalizable Expenditures vs. Deductible Expenses - Buildings & Equipment … Improvements vs. Repairs … Section 263(a) Capitalization vs. Repair Expenditures - Section 263(a) - Tangibles Regulations (2012) ....................... 10-11 Cost Segregation Studies - Buildings, Building Construction Costs & Equipment ................................... 11 Equipment - General .................................................................................................................................. 12 Equipment - Small Cost Purchases ............................................................................................................ 12 Service Bay Areas ...................................................................................................................................... 12 Cash Reporting, Form 8300 Filing Requirements & Money Laundering ............................................................. 12 Changes in Accounting Methods (CAMs) & Form 3115 Filings Capitalization vs. Repair Expenditures - Section 263(a) - Tangibles Regulations (2012) ............................. 13 General ............................................................................................................................................................ 13-14 Trade Discounts, Floorplan Assistance Payments & Certain Advertising Fees & Expenses .......................... 15 Commissions......................................................................................................................................................... 15 Compensation (Reasonable) for Dealers............................................................................................................... 15 Compensation Plans for Dealership Key Employees ............................................................................................ 16 Condemnation Actions - Section 1033 ................................................................................................................. 16 Constructive Dividend(s) … See Also Loans to Dealer-Shareholder.................................................................... 16 Contributions to Capital by Shareholders and by Non-Shareholders - Section 118 ............................................. 16 Dealership Transitions and Closings / Franchise Terminations … Tax Issues, Losses, Expenses ....................... 17 Demonstrator Vehicles - Valuing & Reporting the Use of Demonstrator Vehicles by Dealership Employees Safe Harbor Rules for Demonstrator Usage … Rev. Proc. 2001-56 ............................................................... 17 Cases & Rulings .............................................................................................................................................. 17 Valuation & Reporting Usage - Prior to Issuance of Rev. Proc. 2001-56 ....................................................... 17 Disaster Area Losses - Section 165 ...................................................................................................................... 18 Domestic Production Activities Deduction - Section 199 .................................................................................... 18 E-Commerce ......................................................................................................................................................... 18 E-Filing ................................................................................................................................................................. 18 Electronic Federal Tax Payment System (EFTPS) ............................................................................................... 18 Energy Audits ....................................................................................................................................................... 19 Factory / Manufacturer Programs Facilities Programs & Payments...................................................................................................................... 19 Other Assistance & Incentive Program Payments ........................................................................................... 20 Franchise Termination Payments .......................................................................................................................... 20 (continued)

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I. ACCOUNTING & TAX ISSUES (continued)

Gross Profit Elimination From Internals ............................................................................................................... 20 Hobby Losses vs. Business “For Profit” Activities .............................................................................................. 20 Intangibles … Goodwill … Non-Compete Agreements ....................................................................................... 21 Inventories Changes In Accounting Methods (CAMs) - Inventories Not on LIFO ........................................................... 21 Classic Cars ..................................................................................................................................................... 22 Cost Determinations Elimination of Trade Discounts and Advertising Fees & Expenses From Cost ......................................... 22 Lower of Cost or Market (LCM) Writedown Valuations .......................................................................... 22 UNICAP - Inventory Cost Capitalization Requirements (Section 263A) - See Section II. Involuntary Conversions (of Inventory) - Section 1033 .................................................................................. 23 Last-In, First-Out (Dollar-Value) Inventory Valuation Method … LIFO† Financial Statement Conformity Requirements ......................................................................................... 23 2009 Year-End Planning for Dealers ......................................................................................................... 23 Changes in LIFO Inventory Accounting Methods ..................................................................................... 24 Combining LIFO Pools (Vehicle-Pool Method) … Rev. Proc. 2008-23 ................................................... 24 New & Used Vehicles - General ................................................................................................................ 24 Reserve Recapture Taxes in Changing From “C” Corporation To “S” Corporation Status ....................... 25 Termination of LIFO Election & Other LIFO Recapture Issues ................................................................ 25 Parts & Accessories Inventories - Use of Replacement Cost Method for Valuing P&A Inventories ............. 25 Leasing & Terminal Rental Adjustment Clauses (TRACs) .................................................................................. 26 Legal - Professional Fees, Deductibility of ........................................................................................................... 26 Like-Kind Exchanges - Section 1031 ................................................................................................................... 26 Loaner Vehicles .................................................................................................................................................... 26 Loans to Dealer-Shareholder & Constructive Dividend Issues............................................................................. 26 Meals & Entertainment Substantiation - Section 274(d) ...................................................................................... 27 Net Operating Loss (Carrybacks) ......................................................................................................................... 27 Personal Holding Companies ................................................................................................................................ 27 Prepaid Expenses .................................................................................................................................................. 27 Producer Owned Reinsurance Companies (PORCs) - Including Vehicle Service Contracts (VSCs)................... 27-28 Rebate Coupons .................................................................................................................................................... 29 Recovery of Legal Fees From IRS ........................................................................................................................ 29 Rent Payments … Timing, Deductibility & Section 467 ...................................................................................... 29 S Corporations … Shareholder Basis in Stock & in Indebtedness........................................................................ 29

†For all LIFO-related entries, see also the Index of Articles for LIFO Lookout (March 1991 - December 2012) (continued)

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I. ACCOUNTING & TAX ISSUES (continued)

Schedule M-3 … Reconciliation of Book-Tax Differences ................................................................................. 29 Sec. 401(k) Plan Contributions Withheld from Employees, Remittance to Plan Administrators ......................... 29 Sec. 531 Penalty Tax on Unreasonable Accumulation of Earnings ...................................................................... 29 Settlements & Awards .......................................................................................................................................... 30 Spin-Offs & Split-Offs - Section 355 ................................................................................................................... 30 Tax Return Penalties & Disclosures - Preparer Penalties, Taxpayer (Accuracy-Related) Penalties, etc. All Tax Returns - Section 6662 & 2007 Amendments to Section 6694 .......................................................... 30 FIN 48 … Financial Accounting Standards Board (FASB) Interpretation No. 48 (FIN 48) … Accounting for Uncertainty in Income Taxes ........................................................................... 30 Income Tax Returns - Section 6662 & Pre-2007 Amendments to Section 6694 ............................................ 31 Gift Tax Returns .............................................................................................................................................. 31 Tax Shelters - Abusive Tax Shelters ..................................................................................................................... 32 Technician Tool Plans - Section 62(c) Accountable & Nonaccountable Plans, Other Reimbursement Arrangements & Rental Programs................................................................................. 32-34 Transferee Liability............................................................................................................................................... 34 Uncertain Tax Positions, Disclosure in Schedule UTP of Tax Return ................................................................. 34 Unclaimed Funds .................................................................................................................................................. 34 Vehicle Credits & Alternative Motor Vehicle Credits - Section 30B ................................................................... 35 Vehicle Service Contracts (VSCs) - See Producer Owned Reinsurance Companies............................................ 35 Worker Classification: Employee vs. Independent Contractor Status ................................................................. 35

II. UNICAP - UNIFORM INVENTORY COST CAPITALIZATION REQUIREMENTS (SECTION 263A)

Revenue Procedure 2010-44 … Dealership Section 263A Safe Harbor Elections ............................................... 36 Moratorium on Raising Sec. 263A Issues (2009-2010) ........................................................................................ 37 Interim (2008 - Mid-2009) .................................................................................................................................... 37 TAM 200736026 (September 2007) ..................................................................................................................... 38 General & Pre-TAM Articles (Mid-2007 and Before) ......................................................................................... 38

III. USED VEHICLES & BUY-HERE, PAY-HERE (BHPH) DEALERS

Accounting Methods & Issues - Lower of Cost or Market (LCM) Writedown Valuations .................................. 39 Accounting Methods & Issues - Other Issues ....................................................................................................... 39 Buy-Here, Pay-Here (BHPH) Operations & Related Finance Companies (RFCs) ............................................... 40 Buy-Here, Pay-Here (BHPH) Operations & Unrelated Loan Servicing Companies ............................................ 41 Donation Programs for Used Vehicles to Charities .............................................................................................. 41 IRS Audits & Tax Issues for Used Vehicle Dealers ............................................................................................. 41 (continued)

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IV. GENERAL TAX PLANNING FOR DEALERS & DEALERSHIPS

Dealer Gift & Estate Planning .............................................................................................................................. 42 Dealership Continuity, Restructuring, Expansion & Other Planning ................................................................... 42 Entity Choices ... C, S, LLC ................................................................................................................................. 43 Individual Income Tax Returns & Planning ......................................................................................................... 43 Other Specialized Planning Techniques ............................................................................................................... 44 Real Estate Investment Trusts ............................................................................................................................... 44 Year-End Tax Planning Opportunities for Dealer Clients .................................................................................... 44

V. TIMELINES & PRACTICE GUIDES

Timelines General ............................................................................................................................................................ 45 Section 263(a) - Tangibles Regulations (2012) ............................................................................................... 45 Section 263A - UNICAP - Uniform Inventory Cost Capitalization Requirements ......................................... 45 Other - Specific ............................................................................................................................................... 45 Practice Guides By Specific Topic or Issue .............................................................................................................................. 45-47 Year-End Review Materials Discussion Agenda for Year-End Meeting with Dealer ............................................................................. 47 Year-End Dealership Tax Return Compliance & Planning Opportunities Checklist ................................. 47-48 Practice Development Suggestions for CPAs with Auto Dealership Practices ............................................... 48

VI. AUTO DEALER INDUSTRY & DEALER-MANUFACTURER (FACTORY) ISSUES

Auto Dealer Industry - General ............................................................................................................................. 49 Dealers in Transition: Dealer-Manufacturer (Factory) Issues. ............................................................................. 50-51 Project 2000 Activities .......................................................................................................................................... 51 Dealer Non-Tax Compliance Issues Standards for Safeguarding Customer Information & FTC Rules ................................................................... 51

VII. IRS ACTION, AUDIT ACTIVITY & AUDIT TECHNIQUE GUIDES

… See Also Section VII: Conference - Convention - Seminar (Presentation) Summaries IRS Action & Audit Activity ................................................................................................................................ 52-53 IRS Audit Technique Guides (ATGs) Retail Industry (2009)...................................................................................................................................... 53 New Automobile Dealerships (2004, 2000, 1993) .......................................................................................... 53 Used Car Dealers (1996, 1995) ....................................................................................................................... 54 Cost Segregation Studies (2004) ..................................................................................................................... 54 Shareholder Loans (vs. Constructive Dividends) (2001) ................................................................................. 54 (continued)

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VIII. CONFERENCE - CONVENTION - SEMINAR (PRESENTATION) SUMMARIES

AICPA & NADA … Comparison of Motor Vehicle Technical Advisor Presentations ....................................... 55 AICPA … AICPA National Auto Dealership Annual Conferences ..................................................................... 55-57 NADA … National Automobile Dealers Association Annual Conventions......................................................... 57-58 NABD … National Alliance of Buy-Here, Pay-Here Dealers Conferences ......................................................... 58 De Filipps’ Dealer Tax Update Seminar Summaries ............................................................................................ 58 De Filipps’ CPA-Auto Dealership Niche Conferences ......................................................................................... 59 Other Conferences ................................................................................................................................................ 59

IX. FINDING LISTS

Cases ..................................................................................................................................................................... 60-62 IRS Documents & Publications Automotive Alerts (IRS Motor Vehicle Technical Advisor) ........................................................................... 63 Chief Counsel Memos & Notices .................................................................................................................... 63 Coordinated Issue Papers (CIPs) & Task Force Alerts .................................................................................... 63 Field Attorney Advice (FAAs) ........................................................................................................................ 63 Field Service Advice Memoranda ................................................................................................................... 63 IRS Fact Sheets ............................................................................................................................................... 64 IRS ILM … Legal Memoranda ....................................................................................................................... 64 IRS ITA … Technical Assistance Memoranda ............................................................................................... 64 LMSB (Large & Mid-Size Business Division) Directives .............................................................................. 64 Letter Rulings (PLRs) - Including Technical Advice Memoranda (TAMs) - After 1998 ............................... 65 Letter Rulings (PLRs) - Including Technical Advice Memoranda (TAMs) - Before 1999 ............................. 66 Notices ............................................................................................................................................................. 66-67 Publications ..................................................................................................................................................... 67 Revenue Procedures ........................................................................................................................................ 67-68 Revenue Rulings .............................................................................................................................................. 69 Treasury Decisions .......................................................................................................................................... 69 Legislation The Small Business Jobs Act of 2010 .............................................................................................................. 70 The Health Care Act (Health Care & Education Reconciliation Act of 2010) ................................................ 70 Worker, Homeownership and Business Assistance Act of 2009 (WHBA) ....................................................... 70 Consumer Assistance to Recycle and Save (CARS or “Cash-for-Clunkers”) Act of 2009 .............................. 70 Tax Extenders & Alternative Minimum Tax Relief Act of 2008 ....................................................................... 70 Small Business & Work Opportunity Act of 2007 ............................................................................................ 70 Energy Policy Act of 2005 ............................................................................................................................... 70 American Jobs Creation Act (AJCA) of 2004 .................................................................................................. 70 Pension Funding Equity Act of 2004 ............................................................................................................... 70 Jobs And Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) ............................................................... 70 Job Creation & Worker Assistance Act of 2002 .............................................................................................. 70 Pending Legislation Estate Tax Repeal & Alternative Measures ..................................................................................................... 70 (continued)

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X. OTHER RESOURCES & REFERENCES

Reference Reviews ............................................................................................................................................... 71 Book Reviews ....................................................................................................................................................... 71 New Services & Resources ................................................................................................................................... 71 Bibliographies & Lists of Suggested References .................................................................................................. 71 Contributing Authors ............................................................................................................................................ 72

* NOTE: To facilitate key word/subject finding: Certain articles marked (*) are included more than once in the detailed topic/subject listings. Articles relating to IRS Audit manuals, Guides, etc., and PRACTICE GUIDES (identified by PG) are included in the detailed topic/subject listings and in the above FINDING LISTS. (Rev. January 2013) G:\Group\Word\DTW\DTWIndexofArticles.docx

DEALER TAX WATCH


PAGE 8 I. ACCOUNTING & TAX ISSUES ACCOUNTING SOFTWARE & IRS ELECTRONIC RECORDKEEPING REQUIREMENTS (E.R.R.) Electronic Recordkeeping Requirements Update ............................................................... June, 2007 .................. pg. 3 IRS Electronic Recordkeeping Requirements … Revenue Procedure 98-25 Are We Finally Getting Closer to “Full” Compliance? ................................................. March, 2007 ............... pg. 8 10-Year Timeline … 1997 - 2007 ................................................................................. March, 2007 ............... pg. 10 ADP’s Solution for the IRS’ Electronic Recordkeeping Requirements - A Case Study .. March, 2007 ............... pg. 12 Further Thoughts & Observations from the Controller of the Volunteer Dealership .... March, 2007 ............... pg. 18 Typical IRS Information Document Request (IDR) … (Issued Early 2005)................. March, 2007 ............... pg. 22 List of Computer Files Necessary for Most Examinations … (Issued Early 2005) ....... March, 2007 ............... pg. 23 Compliance Considerations & Practice Suggestions ............................................ PG ... March, 2007 ............... pg. 24 Revenue Procedure 98-25 … Electronic Recordkeeping Requirements ....................... March, 2007 ............... pg. 26 Revenue Ruling 71-20 … Machine Sensible Tax Records ........................................... March, 2007 ............... pg. 33 Revenue Ruling 81-205 … Machine Sensible Tax Records ......................................... March, 2007 ............... pg. 33 Revenue Procedure 97-22 … Use of Electronic Storage Systems for Books & Records .... March, 2007 ............... pg. 34 2006 AICPA Auto Dealership Conf. IRS MVTA Update Comments on E.R.R. ............... December, 2006 ......... pg. 12 ADP Satisfies IRS Electronic Recordkeeping Requirements ............................................. December, 2006 ......... pg. 3 2005 AICPA Auto Dealership Conf. - IRS MVTA Update Comments on E.R.R. ............ December, 2005 ......... pg. 14 IDR Request … Electronic Recordkeeping (Watch Out #2) & Machine Sensible Records .. June, 2005 .................. pg. 2 Electronic Records Retention Requirements for Auto Dealerships … Automotive Alert! ......March, 2005 ............... pg. 30 Tax Audit for Life … Could Save Your Life … If the Taxman Ever Knocks at Your Door* ... September, 2004 ........ pg. 3 2004 NADA Workshop Summary Report .......................................................................... March, 2004 ............... pg. 9 2006 AICPA Auto Dealership Conf. IRS MVTA Update Comments on E.R.R. ............... December, 2003 ......... pg. 10 IRS Focus on E.R.R. & Dealer Software Issues ................................................................. September, 2000 ........ pg. 2 IRS Zeroing in on Electronic Recordkeeping Requirements .............................................. June, 2000 .................. pg. 2 Software & Replacement Cost for Parts Inventories (IRS Industry Specialist Update)* .... December, 1999 ......... pg. 5 Dealership Software Programs Must Save All the Detail Required by Rev. Proc. 98-25 ... December, 1998 ......... pg. 3 ADVERTISING ASSOCIATION PAYMENTS Advertising Association Payments Are Not Deductible by Dealers Until the Year When Economic Performance Occurs … FSA 1999-1161 ........................................... September, 1999 ........ pg. 3 AIRCRAFT American Jobs Creation Act of 2004 Corporate Aircraft Expense Deduction Now Limited ................................................... December, 2004 ......... pg. 3 Planes & Jets - That Airplane Really is Deductible … IRS Upset in E. W. Richardson ..... September, 1996 ........ pg. 5 E. W. Richardson--Tax Court Docket # 27308-92 ... Is That Plane Deductible? .......... June, 1996 .................. pg. 4 Management Fees and Airplane Rentals .................................................................. June, 1996 .................. pg. 5 Costs, Usage & Reimbursement .............................................................................. June, 1996 .................. pg. 6 Aircraft Planning & Documentation Checklist .......................................................... PG .. June, 1996 .................. pg. 7

DEALER TAX WATCH


PAGE 9 I. ACCOUNTING & TAX ISSUES (continued) BAD DEBT DEDUCTION WRITE-OFFS James Peacock v. Comm. … Disallowed Deduction for Dealership’s Bad Debt* ............. September, 2002 ........ pg. 10 Dealer’s Repayment on Floor Plan Guarantee Results in Limited Tax Benefits Lee D. Froehlich ............................................................................................................ December, 1996 ......... pg. 14 BUY-SELL AGREEMENTS & ALLOCATIONS Dealers Benefit from Changes in Final Regs on Capitalization of Intangibles (Watch Out #7) .... March, 2004 ............... pg. 2 Burien Nissan, Inc. Loses on Appeal (Watch Out #6) ........................................................ December, 2003 ......... pg. 3 15-Year Write-Off Period for Dealer’s Payments for Non-Compete Agreements Upheld on Appeal in Frontier Chevrolet Co. .................... June, 2003 .................. pg. 8 Tax Court Treats Buy-Sell Payments as Constructive Dividends & Reverses Self-Serving Demo Positions in Herbert L. Whitehead v. Comm.* ........... March, 2002 ............... pg. 9 Two More Dealer Non-Compete Agreements Trapped by Section 197: Frontier Chevrolet Co. & Burien Nissan, Inc. ..................... June, 2001 .................. pg. 6 The Facts in Frontier Chevrolet Co. ............................................................................. June, 2001 .................. pg. 7 Other Considerations w/r/t Section 197 ................................................................ ........ June, 2001 .................. pg. 11 More on Covenants Not to Compete & Howard Pontiac-GMC ......................................... December, 1997 ......... pg. 11 Allocation to Non-Compete Covenant Doesn’t Stand Up: Howard Pontiac-GMC ........... September, 1997 ........ pg. 3 Tax Court Clobbers Buy-Sell Allocations and Deductions Heritage Auto Center, Inc. T.C. Memo 1996-21 ........................................................... March, 1996 ............... pg. 7 Heritage Auto Center, Inc. IRS Reviewed Brief ........................................................... September, 1995 ........ pg. 3 Summary Tables: The Bottom Line ............................................................................. March, 1996 ............... pg. 10 IRS Challenges to Heritage’s Purchase Price Allocations ............................................ March, 1996 ............... pg. 12 Factors the Courts Consider in Evaluating Non-Compete Agreements .............................. March, 1996 ............... pg. 13 Covenants Not To Compete After August, 1993 in Dealer Buy-Sell Agreements ............. March, 1996 ............... pg. 15 Form 8594: Buyer/Seller Reporting of Price Allocations .................................................. March, 1996 ............... pg. 17 Sections 1060 and 197 Bibliographies ................................................................................ March, 1996 ............... pg. 22 The IRS Exam Position on Non-Compete Covenants … IRS CIP, Feb., 1996 .................. March, 1996 ............... pg. 19 “Economic Reality” & Non-Compete Agreements - Beaver Bolt, Inc. TCM 1995-549 .... December, 1995 ......... pg. 16 Lessons From East Ford in the Tax Court .......................................................................... June, 1994 .................. pg. 2

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PAGE 10 I. ACCOUNTING & TAX ISSUES (continued) CAPITALIZABLE EXPENDITURES VS. DEDUCTIBLE EXPENSES - BUILDINGS & EQUIPMENT … IMPROVEMENTS VS. REPAIRS … SECTION 263(a) Capitalization vs. Repair Expenditures - Section 263(a) - Tangibles Regulations (2012) The New Tangibles Regulations … The Treasury’s “New” Paradigm Shift (Watch Out #8) ................................................ Year-End, 2012 .......... pg. 3 2012 AICPA National Auto Dealership Conference (Las Vegas, NV) New Tangibles Regulations - Tackling the Tough Tax Questions ........................... Year-End, 2012 .......... pg. 17

New Sec. 263(a) “Tangibles” Regulations with Emphasis on Dealership Factory Image Upgrade & Improvement Expenditures .................................................................................... Year-End, 2012 .......... pg. 30 Relief #1 … Two-Year Postponement of Effective Date (Notice 2012-73) ............ Year-End, 2012 .......... pg. 31 Relief #2 … Two-Year Postponement of IRS Audit Activity ................................. Year-End, 2012 .......... pg. 32 Unit of Property (UOP) Determinations .................................................................. Year-End, 2012 .......... pg. 32 “New” UOP Concept - Applicable to Tangible Personal Property Other Than Buildings ......................................................................................... Year-End, 2012 .......... pg. 32 “New” UOP Concept - Applicable to Buildings, Building Components & Building Systems ............................................................................................ Year-End, 2012 .......... pg. 33 Dealership Facility Upgrades & Improvements … Impacted by New Concepts for Buildings ............................................................................... Year-End, 2012 .......... pg. 34 Factory Facilities Programs … NADA Research Project … The Mercer Report (Summary) .......................................................................... Year-End, 2012 .......... pg. 35 Selected CAMs More Generally Acceptable to Dealerships*.................................. Year-End, 2012 .......... pg. 37 The “Roof Replacement” Scenario … Dispositions of Building Components* ...... Year-End, 2012 .......... pg. 38 Use of “Reasonable” Methods to Determine Costs Allocated to Assets that Are Retired* Year-End, 2012 .......... pg. 39 Procedures for Filing Forms 3115 for CAMs with Section 481(a) Adjustments* ... Year-End, 2012 .......... pg. 40 Practitioners’ Concerns Over the New T-Regs. ....................................................... Year-End, 2012 .......... pg. 41 Considerations, Opportunities and Strategies for 2012 ............................................ Year-End, 2012 .......... pg. 42 Executive Summary - The New “Tangibles” Regulations: Impact on Auto Dealerships . Year-End, 2012 .......... pg. 44 Timeline for the New Tangible Property Regulations ............................................. Year-End, 2012 .......... pg. 46 Unit of Property Determinations … Buildings, Building Components & Building Systems ...................................... Year-End, 2012 .......... pg. 48 Improvements Overview … Betterments, Restorations & Adaptations ................... Year-End, 2012 .......... pg. 51 Reg. Ex. #6 … Refresh that Keeps Building in Ordinary Efficient Operating Condition ............................................................. Year-End, 2012 .......... pg. 53 Reg. Ex. #7 … Refresh that Also Includes an Improvement to a Building System . Year-End, 2012 .......... pg. 54 Reg. Ex. #8 … Large Scale Refresh & Remodel Involving an Improvement to the Building ......................................................................... Year-End, 2012 .......... pg. 55 Selected CAMs More Generally Acceptable to Dealerships*.................................. Year-End, 2012 .......... pg. 56 The “Roof Replacement” Scenario … Dispositions of Building Components (CAM #177)* ........................................ Year-End, 2012 .......... pg. 58 Rev. Proc. 2011-42 Required Statistical Sampling Procedures for Section 481(a) Adjustments* .............................................................................. Year-End, 2012 .......... pg. 60

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PAGE 11 I. ACCOUNTING & TAX ISSUES (continued) CAPITALIZABLE EXPENDITURES VS. DEDUCTIBLE EXPENSES - BUILDINGS & EQUIPMENT … IMPROVEMENTS VS. REPAIRS … SECTION 263(a) (continued) Capitalization vs. Repair Expenditures - Section 263(a) - Tangibles Regulations (2012) (continued) New Sec. 263(a) “Tangibles” Regulations … Confusion Continues Over What Should Be Capitalized ........................................... Mid-Year, 2012.......... pg. 36 Executive Summary - The New Tangibles Regulations .......................................... Mid-Year, 2012.......... pg. 37 Automatic Changes in Accounting Methods under the New Sec 263(a) Regulations ... Mid-Year, 2012.......... pg. 42 Selected Analysis of Certain Regulations Reg. Sec. … -3T(d), (e) & (f) … Unit of Property, et al. ................................... Mid-Year, 2012.......... pg. 44 Reg. Sec. … -3T(h) … Betterments ................................................................... Mid-Year, 2012.......... pg. 46 Reg. Sec. … -3T(i) … Restorations & Replacements of Major Components .... Mid-Year, 2012.......... pg. 48 Automotive Alert … IRS Issues New Regulations: Deductions & Capitalization of Expenditures Related to Tangible Property (Feb. 2012) .................................... Mid-Year, 2012.......... pg. 50 Analysis of Examples Concerning Buildings - from Reg. Sec. 1.263(a)-3T(h) Ex. #6 … Refresh that Keeps Building in Ordinary Efficient Operating Condition ... Mid-Year, 2012.......... pg. 54 Ex. #7 … Refresh that Also Includes an Improvement to a Building System .... Mid-Year, 2012.......... pg. 55 Ex. #8 … Large Scale Refresh & Remodel Involving Improvements to Building .... Mid-Year, 2012.......... pg. 56 Selected Automatic CAMs Applicable to Dealerships & Facilities Upgrades* ....... Mid-Year, 2012.......... pg. 58 2010 AICPA National Auto Dealership Conference (Phoenix, AZ) IRS Tax Issues Update from the IRS Motor Vehicle Technical Advisor ................ Year-End, 2010 .......... pg. 12 Cost Segregation Studies - Buildings, Building Construction Costs & Equipment Automotive Alert: Cost Segregation at Auto Dealerships (March 2008) ...................... Mid-Year, 2009.......... pg. 20 2009 NADA Convention … Dealer Tax Update by the IRS MVTA Cost Segregation Studies for Auto Dealerships ....................................................... Mid-Year, 2009.......... pg. 8 What’s New from the IRS Point of View …Tracking Recent MVTA Presentations* .. Mid-Year, 2008.......... pg. 5 Cost Segregation Audit Technique Guide / Studies .................................................. Mid-Year, 2008.......... pg. 6 Cost Segregation Can Directly Improve Cash Flow for Auto Dealers .......................... September, 2006 ........ pg. 22 Cost Seg. Studies … What the IRS Wants … IRS Audit Techniques Guide (Rev. Jan. 2005) September, 2006 ........ pg. 26 Cost Segregation Studies - IRS Audit Techniques Guide .............................................. December, 2004 ......... pg. 19 2004 NADA Workshop Summary Report ..................................................................... March, 2004 ............... pg. 7 2003 NADA Workshop Summary Report ..................................................................... December, 2003 ......... pg. 10 W.J. De Filipps’ Seminar Outline ................................................................................. September, 2003 ........ pg. 18 Cost Seg. CAMs … A Triple Big Winner (Watch Out #4)* ............................................. June, 2002 .................. pg. 2 Cost Segregation Studies Maximize Depreciation Opportunities… ILM 199921045 ......... September, 2000 ........ pg. 14

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PAGE 12 I. ACCOUNTING & TAX ISSUES (continued) CAPITALIZABLE EXPENDITURES VS. DEDUCTIBLE EXPENSES - BUILDINGS & EQUIPMENT … IMPROVEMENTS VS. REPAIRS … SECTION 263(a) (continued) Equipment - General How Fast Can You Depreciate a Dealership’s Fixed Assets? (Audit Technique Guide, February 2008) ................................................................. Mid-Year, 2008.......... pg. 22 At a Glance … Summary Tables ............................................................................. Mid-Year, 2008.......... pg. 23 What Is the IRS Looking for in a Cost Segregation Study? ..................................... Mid-Year, 2008.......... pg. 26 Detailed Matrix of Depreciable Lives (Recovery Periods) for Dealership Fixed Assets LMSB Detailed Depreciation Matrix - Alphabetically by Asset Class ..... PG ... Mid-Year, 2008.......... pg. 28 Alternative Presentation - By Class Life (5-7-15-39-Non-Depreciable) ... PG ... Mid-Year, 2008.......... pg. 38 More on Tax Relief Afforded by the 9/11/2001 Legislation (Watch Out #2)* ............. June, 2002 .................. pg. 2 Recent Tax Relief (Job Creation and Worker Assistance Act of 2002) May Require Amended Returns … Additional 30% First-Year Depreciation Deduction ............. March, 2002 ............... pg. 5 Equipment - Small Cost Purchases Fixed Assets Costing Under $500 Can’t Be Expensed …They Must All Be Capitalized by Alacare H.H.S., Inc. ..................................... September, 2001 ........ pg. 4 No Expenditures Are Too Small to Capitalize… ILM 199952010 ............................... March, 2000 ............... pg. 5 Service Bay Areas Depreciable Life for Dealership Service Bays .............................................................. September, 2000 ........ pg. 18 IRS Draft Coordinated Issue Paper on Service Bay Areas ....................................... September, 2000 ........ pg. 19 Depreciable Life of Certain Dealer Realty (IRS Industry Specialist Update)* ............. December, 1999 ......... pg. 8 15-Year Life for Certain (Service Bay Area) Depreciable Realty? ............................... September, 1999 ........ pg. 4 CASH REPORTING, FORM 8300 FILING REQUIREMENTS & MONEY LAUNDERING Bale Chevrolet Co. Denied Request for Reimbursement of Litigation Costs ..................... Year-End, 2010 .......... pg. 9 Automotive Alert: Cash Reporting Q&A (Updated January 2009) .................................... Mid-Year, 2009.......... pg. 23 BHPH Dealers Face Special Problems in Meeting Their Cash Reporting Responsibilities ... June, 2006 .................. pg. 22 Special Rules, Definitions & Terms .............................................................................. June, 2006 .................. pg. 24 LTR 9718003 & TAM 200501016 ................................................................................ June, 2006 .................. pg. 28 BHPH Dealers Critical Cash Reporting Questions & Suggested Answers ................... June, 2006 .................. pg. 30 Tysinger Motor Co. v. U.S. … Dealership Escapes Major Penalty for Not Filing Forms 8300 .... June, 2006 .................. pg. 10 Cash Reporting Checklist .......................................................................................... PG ... June, 2006 .................. pg. 17 IRS Automotive Alert! … March, 2006 … Questions & Answers on Form 8300 .............. March, 2006 ............... pg. 40 IRS Emphasizes Form 8300 Reporting & Proper Behavior … IRS Fact Sheet 2003-16.... September, 2003 ........ pg. 7 Forms 8300 & Money Laundering: A Vivid Reminder from D.L. Jensen ........................ December, 1995 ......... pg. 18 Form 8300 Customer Notification Reminder ..................................................................... December, 1995 ......... pg. 19 Form 8300 Customer Notification Reminder ..................................................................... December, 1994 ......... pg. 3 Form 8300 - Questions & Answers ..................................................................................... September, 1994 ........ pg. 4 Revised Form 8300 ............................................................................................................. September, 1994 ........ pg. 5 Suggestions for Reporting Cash Transactions .................................................................... September, 1994 ........ pg. 3

DEALER TAX WATCH


PAGE 13 I. ACCOUNTING & TAX ISSUES (continued) CHANGES IN ACCOUNTING METHODS (CAMs) & FORM 3115 FILINGS Capitalization vs. Repair Expenditures - Section 263(a) - Tangibles Regulations (2012) Selected CAMs More Generally Acceptable to Dealerships* ....................................... Year-End, 2012 .......... pg. 37 The “Roof Replacement” Scenario … Dispositions of Building Components* ............ Year-End, 2012 .......... pg. 38 Use of “Reasonable” Methods to Determine Costs Allocated to Assets that Are Retired* . Year-End, 2012 .......... pg. 39 Procedures for Filing Forms 3115 for CAMs with Sec. 481(a) Adjustments* .............. Year-End, 2012 .......... pg. 40 Selected CAMs More Generally Acceptable to Dealerships* ....................................... Year-End, 2012 .......... pg. 56 “Roof Replacement” Scenario - Dispositions of Building Components (CAM #177)* ... Year-End, 2012 .......... pg. 58 Rev. Proc. 2011-42 Required Statistical Sampling Procedures for Section 481(a) Adjustments under the New Tangibles Regulations (2012)* ..... Year-End, 2012 .......... pg. 60

Selected Automatic CAMs Applicable to Dealerships & Facilities Upgrades .............. Mid-Year, 2012.......... pg. 58 General Be Careful When Filing Copies of Form 3115 … LTR 201237003 ............................. Year-End, 2012 .......... pg. 10 Revisions to Instructions for Form 3115 (March 2012) ................................................ Mid-Year, 2012.......... pg. 11 Missed Form 3115 Filings Dates Require Extensions … LTR 201126014................... Year-End, 2011 .......... pg. 30 … LTR 201128002 ................... Year-End, 2011 .......... pg. 30 Form 3115 Late Filing Relief … Requesting Permission From the IRS for an Extension of Time to File After the Regular Filing Due Date Has Been Missed … Reasonable Extensions of the Time for Late Filings .......................................... Year-End, 2011 .......... pg. 31 IRS Updates Procedures for Automatic CAMs … Rev. Proc. 2011-14* ...................... Mid-Year, 2011.......... pg. 9 List of Automatic CAMs Frequently Encountered in Auto Dealerships .............. PG ... Mid-Year, 2011.......... pg. 11 De Filipps’ 2010 AICPA Presentation … Practitioner’s Nightmare: Uncertainty & Dealership Tax Issues Revised Form 3115 for Changes in Accounting Methods & Revised Instructions .. Year-End, 2010 .......... pg. 47 Importance of the Concept of “Separate Trades or Businesses” ......................... Year-End, 2010 .......... pg. 48 Form 3115 & Instructions … New Revisions & New Concerns ................................... Mid-Year, 2010.......... pg. 24 Frequently Encountered Dealership Automatic Changes in Methods ...................... Mid-Year, 2010.......... pg. 25 Form 3115: At a Glance .......................................................................................... Mid-Year, 2010.......... pg. 27 Engagement Letters for Form 3115 Filings … Should You Have Them? ............... Mid-Year, 2010.......... pg. 32 Sec. 481(a) Adjustments & Presentation Format for Sec. 481(a) Adjustment with 2 Components* ........................................................................................... Mid-Year, 2010.......... pg. 33 Changes in Inventory (Section 263A) Methods … Form 3115, Schedule D, Part III* ....................................................................... Mid-Year, 2010.......... pg. 34 Terminating LIFO Elections … Section 263A CAM Ramifications ....................... Mid-Year, 2010.......... pg. 36 Practice Guide … Ten Suggestions for Form 3115 Filings ............................ PG ... Mid-Year, 2010.......... pg. 38 Appendix A … What If the Tax Return for the Year of Change Is Due Before the IRS Grants Approval to Make the Change? ................................. Mid-Year, 2010.......... pg. 40

DEALER TAX WATCH


PAGE 14 I. ACCOUNTING & TAX ISSUES (continued) CHANGES IN ACCOUNTING METHODS (CAMs) & FORM 3115 FILINGS (continued) General (continued) More Accounting Method Changes Become Automatic & Some Clarifications Will Affect Section 263A Cost Capitalization Practices (Watch Out #5) ................................... Year-End, 2009 .......... pg. 5 IRS Moratorium on Raising Sec. 263A Issues Urges Dealerships to File Forms 3115 to Change Their Accounting Methods … What Should a Dealership Do? … LMSB Industry Directors Directive (IDD - September 2009) ................................. Year-End, 2009 .......... pg. 14 The Case Against Dealerships “Jumping the Gun” at this Time .............................. Year-End, 2009 .......... pg. 22 IRS Revises From 3115 Instructions ............................................................................. September, 2006 ........ pg. 12 Form 3115 - Automatic Accounting Method Changes - Newly Added Automatic CAMs .....September, 2006 ........ pg. 14 Year-End Letter for Dealer Clients … Accelerated Deduction Benefits by Changing to More Favorable Tax Accounting Methods ................................................. PG ... September, 2004 ........ pg. 10 Form 3115 Filings & Automatic vs. Advance Consent Changes in Method ................. March, 2004 ............... pg. 7 IRS Revises Form 3115 for CAMs … At A Glance … Changes & Comments ............ March, 2004 ............... pg. 12 IRS List of 76 Automatic Accounting Method Changes ............................................... March, 2004 ............... pg. 16 A Triple Big Winner … Accounting Method Changes & Cost Segregation Studies for Dealership Facilities - Rev. Proc. 2002-9 & Rev. Proc. 2002-19 (Watch Out #4)* .... June, 2002 .................. pg. 2 Form 3115 Withdrawn Change Requests Don’t Fall Between the Cracks .................... March, 2000 ............... pg. 4 Cordes Finance Corp. Loses Big Time to the IRS…Supreme Court Denies Certiorari* ...... September, 1999 ........ pg. 3 IRS Change in Cordes Finance Corporation’s Accounting for Interest Income & $300,000 Underpayment Penalty Upheld by Tenth Circuit Court of Appeals* ......... December, 1998 ......... pg. 23 Controversy Over IRS Notice 98-31 Rules for Agents Changing Methods on Audit ... September, 1998 ........ pg. 3 Think Twice about Waiting for the IRS to Come in and Make You Change Methods . June, 1998 .................. pg. 8 Flowchart for Methods, Changes & Approval Disputes ....................................... PG .. June, 1998 .................. pg. 11 Basic CAM Rules & Terms .................................................................................. PG .. June, 1998 .................. pg. 12 In CAM Disputes, the Commissioner Is Always Right … Usually...................... PG .. June, 1998 .................. pg. 14 Recap of Recent IRS & Tax Court Activity of Interest to Dealers ................................ June, 1998 .................. pg. 16 Buyers Home Warranty Co. Shows Penalty for Waiting too Long to File Form 3115 . March, 1998 ............... pg. 4 Rev. Proc. 97-27 … IRS Advance Consent Required CAMs … At A Glance ..... PG .. March, 1998 ............... pg. 7 Rev. Proc. 97-37 At A Glance............................................................................... PG .. March, 1998 ............... pg. 8 IRS Changes RFCs Accounting for Interest Income in Cordes Finance Corp.* .......... June, 1997 .................. pg. 22

DEALER TAX WATCH


PAGE 15 I. ACCOUNTING & TAX ISSUES (continued) CHANGES IN ACCOUNTING METHODS (CAMs) & FORM 3115 FILINGS (continued) Trade Discounts, Floorplan Assistance Payments & Certain Advertising Fees & Expenses Revised Procedures for Securing Automatic Consent from the IRS to Make Changes in LIFO and Other Methods of Accounting (Rev. Proc. 2008-52)*......................... Year-End, 2008 .......... pg. 14 Section-by-Section Analysis .................................................................................... Year-End, 2008 .......... pg. 24 Automatic CAMs Related to Certain Invoiced Advertising Association Costs ...... Year-End, 2008 .......... pg. 37 2004 NADA Workshop Summary Report ..................................................................... March, 2004 ............... pg. 5 2003 AICPA Conf. IRS MVTA Update Comments on T/Ds, etc. ............................... December, 2003 ......... pg. 11 CAMs for Trade Discounts, Floorplan Assistance, Advertising Fees & Expenses * .... September, 2003 ........ pg. 10 W.J. De Filipps’ Seminar Outline on Trade Discounts, etc. .......................................... September, 2003 ........ pg. 22 Trade Discount & Advertising Expense CAMs May Be the Answer for Dealers Looking for Big, One-Time Tax Write-Offs (Watch Out #5)* ................................ December, 2002 ......... pg. 3 Commissions Commissions Paid to Salesmen for Selling Credit Life Insurance Are Deductible Berger Chevrolet, Inc. ................................................................................................... December, 1997 ......... pg. 8 Compensation (Reasonable) for Dealers Reasonable Compensation: A Case to Remember When Dealership Times Are Better … Menard, Inc. (Watch Out #11) ................................................................ Mid-Year, 2009.......... pg. 5 Reasonable Dealer Compensation … When Shareholders Disagree .................................. March, 2003 ............... pg. 8 Metro Leasing & Development Corp. … A Really Good Case Study ................................ June, 2002 .................. pg. 6 Tax Court’s Calculation of Allowable Reasonable Comp. ............................................ June, 2002 .................. pg. 11 Planning Lessons Inspired by Metro Leasing ....................................................... PG .. June, 2002 .................. pg. 13 The Facts and a Facts Timeline ..................................................................................... June, 2002 .................. pg. 14 Detail of Income, Officer Compensation & Other Related Statistics ............................ June, 2002 .................. pg. 15 How Much Compensation is Reasonable? .................................................................... June, 2002 .................. pg. 16 Metro’s Liability for Penalty Tax on the Unreasonable Accumulation of Earnings* ... June, 2002 .................. pg. 24 Accuracy-Related Penalty Issues* ................................................................................. June, 2002 .................. pg. 28 Big “Bonus” Before Buy-Out Wasn’t “Reasonable” ...Twin City Dodge-Chrysler, Inc. .... June, 1997 pg. 4 Suggestions for Determining, Documenting & Defending Dealer Compensation .... PG .. September, 1994 ........ pg. 20 A.I.D., Inc. (Automotive Investment Development, Inc.) Dealer Wins All in Tax Court .... September, 1994 pg. 8 Auto Dealers in Court - A Summary .................................................................................. September, 1994 ........ pg. 7 Factors the Courts Consider In Determining Reasonable Compensation ........................... September, 1994 ........ pg. 9 Superior Motors, Inc. - A Contrasting Result ..................................................................... September, 1994 ........ pg. 17 Dealer Compensation: How Much Is Enough & What’s “Reasonable?” .......................... June, 1994 .................. pg. 10 Corporate Minutes Checklist for Defending Dealer Compensation........................... PG .. June, 1994 .................. pg. 11 IRS Manual Instructions for Auditing Compensation * ..................................................... June, 1994 .................. pg. 16 IRS’ Questionnaire on Compensation * ............................................................................. June, 1994 .................. pg. 20 Other IRS Audit Techniques ............................................................................................... June, 1994 .................. pg. 23

DEALER TAX WATCH


PAGE 16 I. ACCOUNTING & TAX ISSUES (continued) COMPENSATION PLANS FOR DEALERSHIP KEY EMPLOYEES De Filipps 4th Annual CPA-Auto Dealership Niche Conference Employment Issues & Comp. Plans for Key Dealership Employees ............................ September, 2001 ........ pg. 24 Sample Compensation Programs - Salespersons ............................................. PG ... September, 2001 ........ pg. 26 Sample Compensation Programs - Closer-Assistant Sales Manager ............. PG ... September, 2001 ........ pg. 29 CONDEMNATION ACTIONS - SECTION 1033 Auto Dealer Allowed to Defer Gain on Sale of Property Sold Under Threat of Condemnation … Relief or Fraud?… Michael H. Johnson ................ March, 1999 ............... pg. 14 CONSTRUCTIVE DIVIDEND(S) One Dealership Family’s Consistent Losses to the IRS in its 10-Year War Over Constructive Dividends & Other Questionable Transactions … The Cordes Saga* ..... June, 2003 .................. pg. 11 Tax Court Treats Buy-Sell Payments as Constructive Dividends & Reverses Self-Serving Demo Positions in Herbert L. Whitehead v. Comm.* ........... March, 2002 ............... pg. 9 … See also LOANS TO DEALER-SHAREHOLDER & CONSTRUCTIVE DIVIDEND ISSUES in this Section CONTRIBUTIONS TO CAPITAL BY SHAREHOLDERS AND BY NON-SHAREHOLDERS - SECTION 118 Update on Tax Treatment of Manufacturer Payments to Dealerships for Facility Image Upgrades & Improvements .................................................................... Year-End, 2012 .......... pg. 28 Part II (Update) ... Taxability of Manufacturer Assistance Payments to Automobile Dealerships for Facility Improvements & Image Upgrades ......................................... Mid-Year, 2012.......... pg. 16 Manufacturer Assistance Payments to Dealerships for Facility Improvements & Image Upgrades Taxability of Manufacturer Assistance Payments … Part I Code, Regulations, Case Law & IRS Guidance* ..................................................... Year-End, 2011 .......... pg. 32 Executive Summary....................................................................................................... Year-End, 2011 .......... pg. 33 Facility Programs - In General ..................................................................................... Year-End, 2011 .......... pg. 37 Legal Update Comments ............................................................................................... Year-End, 2011 .......... pg. 38 General Motors EBE (Essential Brand Elements) Program .......................................... Year-End, 2011 .......... pg. 39 Other Considerations & Observations ........................................................................... Year-End, 2011 .......... pg. 40 Repayment Contingencies … Forfeiture Events Requiring Repayment in Event of Default .................................. Year-End, 2011 .......... pg. 40 IRS Concerns Over Non-Compliance with Sec. 118 … IDD Directives #1 & #3 ........ Year-End, 2011 .......... pg. 41 Section 118 - IRS Audits- Information Document Request Where Payments Received Are Not Treated as Taxable Income ............................. Year-End, 2011 .......... pg. 42 John B. White, Inc. … Payment by Ford Motor Co. to Induce a Dealership to Relocate Was Taxable Upon Receipt … It Was Not a Contribution to the Dealership’s Capital.................................................................................. Year-End, 2011 .......... pg. 44 James Brown, et al. … Payment Received by an Individual to Induce Him to Purchase a Minority Stock Interest Was a Non-Taxable Reduction of His Cost Basis ........... Year-End, 2011 .......... pg. 50 Taxability of Manufacturer Payments & Reimbursements to Dealerships for Facilities & Image Upgrades & General Motors EBE (Essential Brand Elements) Program (Watch Out #4)* .................... Year-End, 2010 .......... pg. 3 IRS Concern Over Possible Abuse of Capital Contribution Provision … LMSB-04-1007-069 (Watch Out #5)* .......................................................................... December, 2007 ......... pg. 5

DEALER TAX WATCH


PAGE 17 I. ACCOUNTING & TAX ISSUES (continued) DEALERSHIP TRANSITIONS AND CLOSINGS / FRANCHISE TERMINATIONS … TAX ISSUES, LOSSES, EXPENSES De Filipps’ 2010 AICPA Presentation … Practitioner’s Nightmare: Uncertainty & Dealership Tax Issues Terminated Dealerships & Franchises: Writing Off Intangibles ............................. Year-End, 2010 .......... pg. 49 2010 AICPA National Auto Dealership Conference (Phoenix, AZ) IRS Tax Issues Update from the IRS Motor Vehicle Technical Advisor Dealership Transition Tax Issues ............................................................................. Year-End, 2010 .......... pg. 11 DEMONSTRATOR VEHICLES - VALUING & REPORTING USAGE BY DEALERSHIP EMPLOYEES Safe Harbor Rules for Demonstrator Usage … Rev. Proc. 2001-56 2004 NADA Workshop Summary Report ..................................................................... March, 2004 ............... pg. 9 W.J. De Filipps’ Seminar Outline ................................................................................. September, 2003 ........ pg. 26 New IRS Guidelines for Valuing the Use of Demo Vehicles ... in Rev. Proc. 2001-56 ......... December, 2001 ......... pg. 4 At A Glance .................................................................................................... PG ... December, 2001 ......... pg. 5 Sample Letter on New Demo Rules ............................................................... PG ... December, 2001 ......... pg. 3 51 Questions............................................................................................................. December, 2001 ......... pg. 6 Full Exclusion for Qualified Demo Use .................................................................. December, 2001 ......... pg. 8 Calculation of Whether Demo Use Is Considered Limited ............................ PG ... December, 2001 ......... pg. 11 Partial Exclusion for Qualified Demo Use .............................................................. December, 2001 ......... pg. 12 Full Exclusion for Qualified Demo Use .................................................................. December, 2001 ......... pg. 16 General Rule for Non-Simplified Methods ............................................................. December, 2001 ......... pg. 18 IRS-Approved Demo Plan Language ... Full Exclusion Method .................... PG ... December, 2001 ......... pg. 20 IRS-Approved Demo Plan Language ... Partial Exclusion Method ............... PG ... December, 2001 ......... pg. 22 Cases & Rulings Tax Court Reverses Self-Serving Demo Positions in Herbert L. Whitehead v. Comm.* ........ March, 2002 ............... pg. 9 Dealer Valuations Hit Very Hard Again in BMW of North America, Inc...................... March, 1999 ............... pg. 4 LTR 9816007: Another Demo Ruling … With an Even More Disturbing Message .... June, 1998 .................. pg. 5 LTR 9801002: Taxable Fringe Benefits for Drivers & Big Tax Liabilities for Auto Dealership Created by Demonstrator Use ....................................................... December, 1997 ......... pg. 15 Key Code Sections & Regulations Citations ................................................................. December, 1997 ......... pg. 22 Valuation & Reporting Usage - Prior to IRS Issuance of Rev. Proc. 2001-56 Demos … Back Under the IRS Microscope as Industry Issue Resolution Prog. Item .. June, 2001 .................. pg. 12 Sample Demonstrator Agreement (Note: Superceded by Rev. Proc. 2001-56) ... PG .. December, 2000 ......... pg. 4 Coming Soon: A Bright-Line Test (IRS Industry Specialist Update) * ....................... December, 1999 ......... pg. 9 IRS Audit Update: The IRS-NADA Debate at a Stand-Off ......................................... December, 1998 ......... pg. 1 Dealership Demonstrator Vehicles ... Still A Hot Audit Issue ...................................... June, 1996 .................. pg. 9 NADA Recommendations and NADA Sample Policy Statement ................................. June, 1996 .................. pg. 10 IRS’ Demonstrator Vehicles Usage Worksheet * ......................................................... June, 1995 .................. pg. 21 IRS Audits Are Still Evident: Demonstrators Still Hit Hard ........................................ December, 1995 ......... pg. 1 Sample Demonstrator Agreement (Note: Superceded by Rev. Proc. 2001-56) .... PG .. September, 1995 ........ pg. 17

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PAGE 18 I. ACCOUNTING & TAX ISSUES (continued) DISASTER AREA LOSSES - SECTION 165 Tax Planning Opportunities for Dealerships in Disaster Areas … TAM 201111004 ......... Mid-Year, 2011.......... pg. 12 DOMESTIC MANUFACTURING DEDUCTION - SECTION 199 Section 199 Update … There’s Little Practical Benefit for Dealerships (Watch Out #10) ........... June, 2006 .................. pg. 3 2005 AICPA Auto Dealership Conf. - IRS MVTA Update Comments ............................. December, 2005 ......... pg. 12 At A Glance Summary … Domestic Production Activities Deduction (Sec. 199) ..... PG ... December, 2005 ......... pg. 15 A Freebie for Dealers Hidden in the 3%-6%-9% Domestic Manufacturing Deduction? .... December, 2004 ......... pg. 3 E-COMMERCE IRS Retail Industry Audit Technique Guide (Rev. 02-2009) … Dealership E-Commerce … IRS Internet Investigative Tools, Questions & Techniques ....... Mid-Year, 2009.......... pg. 42 E-FILING e-Filing Hardship Waivers May Be Hard to Obtain … Notice 2005-88 (Watch Out #12) ............December, 2005 ......... pg. 4 Mandatory e-Filing for Your Dealership C Corps. … Are You Ready? (Watch Out #4) ...............September, 2005 ........ pg. 2 e-Filing … How to Determine Whether a Corporation Files 250 Returns with the IRS .................September, 2005 ........ pg. 3 ELECTRONIC FEDERAL TAX PAYMENT SYSTEM (EFTPS) EFTPS - Electronic Filing Requirements & Procedures (Sample Letter) ........................... March, 1997 ............... pg. 27

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PAGE 19 I. ACCOUNTING & TAX ISSUES (continued) ENERGY AUDITS Energy Audits … Another Practice Development Opportunity .......................................... December, 2005 ......... pg. 3 FACTORY / MANUFACTURER PROGRAMS Facilities Programs & Payments Update on Tax Treatment of Manufacturer Payments to Dealerships for Facility Image Upgrades & Improvements .............................................................. Year-End, 2012 .......... pg. 28 Mercer Report on Factory Upgrade Programs (February 2012)*.................................. Mid-Year, 2012.......... pg. 12 Part II (Update) ... Taxability of Manufacturer Assistance Payments to Automobile Dealerships for Facility Improvements & Image Upgrades .................................... Mid-Year, 2012.......... pg. 16 Executive Summary (Reprint from Part I) ............................................................... Mid-Year, 2012.......... pg. 17 Checklist for Evaluating Ramifications of Dealership - Manufacturer Facility Programs ....................................................................................... PG ... Mid-Year, 2012.......... pg. 23 Automotive Alert - Factory Image Upgrade Payments (Feb. 2012) ........................ Mid-Year, 2012.......... pg. 26 Why Basis Reduction Treatment Is Inappropriate for Manufacturer Payments ........... Mid-Year, 2012.......... pg. 28 James Brown, et al., v. Comm. ................................................................................ Mid-Year, 2012.......... pg. 28 General Motors Corp. & Subsidiaries v. Comm. .................................................... Mid-Year, 2012.......... pg. 28 Freedom Newspapers, Inc. v. Comm. ...................................................................... Mid-Year, 2012.......... pg. 30 Common Denominator in These Cases which Makes Them Inapplicable to Factory Facility Upgrade Payments ................................................................................. Mid-Year, 2012.......... pg. 31 Strong Case Law Precedent Requiring Taxability (John B. White, Inc.) ................. Mid-Year, 2012.......... pg. 31 What Are the Risks? How Are They Managed? ..................................................... Mid-Year, 2012.......... pg. 32 James Brown, et al., v. Comm. - Analysis & Summary ........................................... Mid-Year, 2012.......... pg. 34 Part I - Manufacturer Assistance Payments to Dealerships for Facility Improvements & Image Upgrades Taxability of Manufacturer Assistance Payments … Code, Regulations, Case Law & IRS Guidance* ............................................... Year-End, 2011 .......... pg. 32 Executive Summary ................................................................................................. Year-End, 2011 .......... pg. 33 Facility Programs - In General ................................................................................ Year-End, 2011 .......... pg. 37 Legal Update Comments .......................................................................................... Year-End, 2011 .......... pg. 38 General Motors EBE (Essential Brand Elements) Program ..................................... Year-End, 2011 .......... pg. 39 Other Considerations & Observations...................................................................... Year-End, 2011 .......... pg. 40 Repayment Contingencies … Forfeiture Events Requiring Repayment in Event of Default ............................. Year-End, 2011 .......... pg. 40 IRS Concerns Over Non-Compliance with Sec. 118 … IDD Directives #1 & #3 ... Year-End, 2011 .......... pg. 41 Section 118 - IRS Audits- Information Document Request Where Payments Received Are Not Treated as Taxable Income ....................... Year-End, 2011 .......... pg. 42 John B. White, Inc. … Payment by Ford Motor Co. to Induce a Dealership to Relocate Was Taxable Upon Receipt … It Was Not a Contribution to the Dealership’s Capital ............................................................................ Year-End, 2011 .......... pg. 44 James Brown, et al. … Payment Received by an Individual to Induce Him to Purchase a Minority Stock Interest Was a Non-Taxable Reduction of His Cost Basis ..... Year-End, 2011 .......... pg. 50 Taxability of Manufacturer Payments & Reimbursements to Dealerships for Facilities & Image Upgrades & General Motors EBE (Essential Brand Elements) Program (Watch Out #4)* .............. Year-End, 2010 .......... pg. 3 IRS Concern Over Possible Abuse of Capital Contribution Provision … LMSB-04-1007-069 (Watch Out #5)* ..................................................................... December, 2007 ......... pg. 5

DEALER TAX WATCH


PAGE 20 I. ACCOUNTING & TAX ISSUES (continued) FACTORY / MANUFACTURER PROGRAMS (continued) Other Assistance & Incentive Program Payments Dealership Tax Issues - An Update from the IRS Industry Specialist * ........................ December, 1999 ......... pg. 4 Manufacturers’ Incentive Payments ......................................................................... December, 1999 ......... pg. 8 Reporting Factory Finance Assistance Payments (IRS Industry Specialist Update) * .. December, 1999 ......... pg. 10 IRS Finally Issues Guidance (in Pub. 3204) on Manufacturer Incentive Payments to Salespersons & Other Form 1099 Reporting Developments ............................... March, 1999 ............... pg. 12 IRS Backs Off of Harsh Treatment for Dealers ............................................................. December, 1998 ......... pg. 6 Rulings on Manufacturer Incentive Payments: LTRs 9647003 & 9525003 & R.R. 70-337 ... December, 1998 ......... pg. 8 FICA Taxes on Factory Incentive Payments? The IRS Says…“Yes”…LTR 9525003 ..... June, 1995 .................. pg. 4 FRANCHISE TERMINATION PAYMENTS Oldsmobile Dealers’ Tax Relief Provisions Not Enacted (AJCA 2004)* ........................... December, 2004 ......... pg. 3 Oldsmobile Dealers & Others in Transition … An Update* Corporate vs. Individual Goodwill ................................................................................ December, 2003 ......... pg. 5 Martin Ice Cream Company … What the Tax Court Said ............................................ December, 2003 ......... pg. 6 Some Possible Tax Relief? … HR 870 (02/25/2003) & S 1305 (06/20/2003) .............. December, 2003 ......... pg. 7 Should You File Amended Returns Based on Pending Legislation? (Watch Out #1 also) ......December, 2003 ......... pg. 8 W.J. De Filipps’ Seminar Outline re: Tax Issues for Dealers in Transition ................. September, 2003 ........ pg. 20 IRS Rules Favorably for Some Oldsmobile Dealers in LTR 200218034 … But Be Careful if You’re Going to Rely on this Ruling* ......................................... March, 2002 ............... pg. 12 W. R. Matthews v. Comm. … Payments to Dealer for His Assistance in Getting GM to Terminate Pontiac Franchise* ..................................................... March, 2002 ............... pg. 14 Dealer Fully Taxed on Proceeds from Franchise-Related Settlement Wade H. Griffin III v. Comm. * ..................................................................................... March, 2001 ............... pg. 18 Possible Implications for Dealers in Transition * .......................................................... March, 2001 ............... pg. 20

… See Also Section VI. DEALERS IN TRANSITION: DEALER-MANUFACTURER (FACTORY) ISSUES GROSS PROFIT ELIMINATION FROM INTERNALS 2004 NADA Workshop Summary Report on Excluding Gross Profit from Internal Repair Orders for Used Vehicles ............................................................. March, 2004 ............... pg. 5 HOBBY LOSSES VS. BUSINESS “FOR PROFIT” ACTIVITIES Something Fishy About Those Fishing Losses Deducted in Dealer’s Tax Return … Section 183 Hobby Activities … James Peacock v. Comm. … T.C. Memo 2002-122 ....... September, 2002 ........ pg. 3 You Shoulda Seen the Big Ones that Got Away … “Miss Piggy” & Other Fish Stories....... September, 2002 ........ pg. 6 Mixing Business with Pleasure on the Deep Sea Fishing Tournament Circuit ............. September, 2002 ........ pg. 8 Disallowed Deduction for Dealership’s Bad Debt* ...................................................... September, 2002 ........ pg. 10 Tax Court Sustains 20% Accuracy-Related Penalties* ................................................. September, 2002 ........ pg. 11 What the Tax Court Said in Applying the “For Profit” Criteria to James Peacock ....... September, 2002 ........ pg. 12 Checklist for Identifying Possible Exposure to Disallowance of Losses for Activities Not Engaged in for Profit ................................................... PG .. September, 2002 ........ pg. 16 Factors to Consider in Evaluating Whether an Activity is Engaged in For Profit .............. September, 2002 ........ pg. 18 Horse Operations: IRS Tells Dealership: “Quit Horsin’ Around” with Equine Assets* .... March, 1997 ............... pg. 26

DEALER TAX WATCH


PAGE 21 I. ACCOUNTING & TAX ISSUES (continued) INTANGIBLES … GOODWILL … NON-COMPETE AGREEMENTS Covenants Not to Compete Are Subject to 15-Year Amortization (Watch Out #7) … Recovery Group, Inc. ................................................................................................ Year-End, 2011 .......... pg. 3 Dealership Non-Deductibility of Purportedly Worthless Goodwill … FAA 201111001F . Mid-Year, 2011.......... pg. 16 Allocation of Professional Fees Paid in the Acquisition of a Dealership ... West Covina Motors, Inc. Revisited* ............................................................................ Mid-Year, 2010.......... pg. 46 Step-by-Step Analysis of Computation Allowed by Tax Court* .................................. Mid-Year, 2010.......... pg. 50 Business Acquisitions & the Broad Reach of Sec. 197 … Recovery Group, Inc................ Mid-Year, 2010.......... pg. 41 2009 Dealer Tax Update Seminar Outline …“When Goodwill Goes Bad … Writing Off the Loss” . Year-End, 2009 .......... pg. 40 Writing-Off Goodwill for Lost or Terminated Franchises (Watch Out #4)* ...................... Year-End, 2009 .......... pg. 5 De Filipps’ Year-End 2008 Dealer Tax Update Personal Goodwill in Business Sales (Solomon & Muskat Cases) ................................ Year-End, 2008 .......... pg. 48 Treatment of Payments Received by Dealerships for the Cancellation of Distributor Agreements … Rev. Rul. 2007-37 .......................................................... June, 2007 .................. pg. 13 2004 NADA Workshop Summary Report on Changes in Final Regs on Capitalization of Intangibles (Watch Out #7) ................................................................ March, 2004 ............... pg. 2 Accelerating Deductions for Prepaid Expenses ............................................................. March, 2004 ............... pg. 6 Intangible Costs - New Rules for Certain Intangible Costs to Be Capitalized .............. March, 2004 ............... pg. 7 Oldsmobile Dealers & Others in Transition … An Update Corporate vs. Individual Goodwill ................................................................................ December, 2003 ......... pg. 5 Martin Ice Cream Company … What the Tax Court Said ............................................ December, 2003 ......... pg. 6 Some Possible Tax Relief? … HR 870 (02/25/2003) & S 1305 (06/20/2003) .............. December, 2003 ......... pg. 7 Should You File Amended Returns Based on Pending Legislation? (Watch Out #1 also) ..... December, 2003 ......... pg. 8 W.J. De Filipps’ Seminar Outline re: Tax Issues for Dealers in Transition ................. September, 2003 ........ pg. 20 IRS Rules Favorably for Some Oldsmobile Dealers in LTR 200218034 … But Be Careful if You’re Going to Rely on this Ruling ........................................... March, 2002 ............... pg. 12 W. R. Matthews v. Comm. … Payments to Dealer for His Assistance in Getting GM to Terminate Pontiac Franchise ....................................................... March, 2002 ............... pg. 14 … See also BUY-SELL AGREEMENTS & ALLOCATIONS INVENTORIES Changes in Accounting Methods (CAMs) - Inventories Not on LIFO IRS Updates Procedures for Automatic CAMs … Rev. Proc. 2011-14* ...................... Mid-Year, 2011.......... pg. 9 List of Automatic CAMs Frequently Encountered in Auto Dealerships .............. PG ... Mid-Year, 2011.......... pg. 11 Revised Procedures for Securing Automatic Consent from the IRS to Make Changes in LIFO and Other Methods of Accounting (Rev. Proc. 2008-52)*......................... Year-End, 2008 .......... pg. 14 Section-by-Section Analysis .................................................................................... Year-End, 2008 .......... pg. 24 Automatic CAMs Related to Inventories Other Than LIFO .................................... Year-End, 2008 .......... pg. 34

DEALER TAX WATCH


PAGE 22 I. ACCOUNTING & TAX ISSUES (continued) INVENTORIES (continued) Classic Cars Classic Cars Are Inventory for an Auto Dealership … Therefore, Losses on Sales Result in Ordinary Deductions (David Taylor Enterprises) ..................................... September, 2005 ........ pg. 22 The Presumption Is that Motor Vehicles Are Held by Auto Dealers Primarily for Sale to Customers - and Not as “Property Used in the Trade or Business” (Rev. Rul. 75-538) .. September, 2005 ........ pg. 23 Cost - Elimination of Trade Discounts & Advertising Fees & Expenses from Cost ILM 200945034 on Trade Discounts Indirectly Emphasizes that the Proper Treatment for Floorplan Assistance Payments Is to Exclude Them from Inventory Costs (Watch Out #11) ............................................................................ Mid-Year, 2010.......... pg. 5 2006 AICPA Auto Dealership Conf. IRS MVTA Update Comments .......................... December, 2006 ......... pg. 21 Discussion in NADA’s Revised Dealer Guide to Federal Tax Issues .......................... September, 2006 ........ pg. 21 Trade Discount Elimination & LIFO Eligibility............................................................ December, 2005 ......... pg. 3 2004 NADA Workshop Summary Report ..................................................................... March, 2004 ............... pg. 5 2003 AICPA Auto Dealership Conf. IRS MVTA Update Comments .......................... December, 2003 ......... pg. 11 CAMs for Trade Discounts, Floorplan Assistance, Advertising Fees & Expenses * .... September, 2003 ........ pg. 10 Trade Discount & Advertising Expense CAMs May Be the Answer for Dealers Looking for Big, One-Time Tax Write-Offs (Watch Out #5)* ................................ December, 2002 ......... pg. 3 Cost - Lower of Cost or Market (LCM) Writedown Valuations 2009 NADA Convention … Dealer Tax Update by the IRS MVTA* Used Vehicle Writedowns........................................................................................ Mid-Year, 2009.......... pg. 14 New Vehicle Writedowns ........................................................................................ Mid-Year, 2009.......... pg. 14 West Covina Motors, Inc. … Aggressive Dealership Deductions Disallowed* Used Vehicle (Lower-of-Cost-or-Market) Writedowns ........................................... Mid-Year, 2009.......... pg. 28 Automotive Alert … Tax Court Rules on Inventory Writedowns: West Covina Motors, Inc. (January 2009) .......................................................... Mid-Year, 2009.......... pg. 36 Determining the Cost Basis for Trade-Ins (IRS Retail Industry Audit Technique Guide) ....... Mid-Year, 2009.......... pg. 38 Trade-In Valuation and LCM Adjustments (IRS Retail Industry Audit Technique Guide) .... Mid-Year, 2009.......... pg. 39 Used Vehicle Writedown Worksheet ................................................................... PG ... Mid-Year, 2009.......... pg. 40 Revised Procedures for Securing Automatic Consent from the IRS to Make Changes in LIFO and Other Methods of Accounting (Rev. Proc. 2008-52)*......................... Year-End, 2008 .......... pg. 14 Section-by-Section Analysis .................................................................................... Year-End, 2008 .......... pg. 24 Automatic CAMs Related to Changes in the Official Used Vehicle Guide Utilized in Valuing Used Vehicles .................................................................... Year-End, 2008 .......... pg. 36 Used Vehicles … Year-End Writedown Documentation Worksheet ................... PG ... December, 2006 ......... pg. 11 Used Car Write-Downs (IRS Industry Specialist Update) * ......................................... December, 1999 ......... pg. 4 Write-Downs of Demonstrators at Year-End: The IRS Says “No” LTR 9522002 ....... June, 1995 .................. pg. 3

DEALER TAX WATCH


PAGE 23 I. ACCOUNTING & TAX ISSUES (continued) INVENTORIES (continued) Cost - UNICAP - Uniform Inventory Cost Capitalization Requirements (Sec. 263A) … See Section II. UNICAP - UNIFORM INVENTORY COST CAPITALIZATION REQUIREMENTS Involuntary Conversions (of Inventories) - Section 1033 Deferring “Gain” on Involuntary Conversions of LIFO Inventories ............................. Mid-Year, 2011.......... pg. 7 LIFO† - Financial Statement Conformity Requirements †For all LIFO-related entries, see also the Index of Articles for LIFO Lookout (March 1991 - December 2012) IRS Vehicle Industry Specialist Comments on Conformity .......................................... December, 1998 ......... pg. 5 Medium- & Heavy-Duty Truck Dealers Get Relief for LIFO Conformity Violations .. September, 1998 ........ pg. 25 Rev. Proc. 98-46 … At A Glance, Key Terms & Important Dates .................. PG .. September, 1998 ........ pg. 26 Auto Dealer LIFO Conformity Penalty Tax: Countdown to May 31, 1998 ................. March, 1998 ............... pg. 22 Rev. Proc. 97-44 Penalty Tax … Additional Problems & Unanswered Questions ....... December, 1997 ......... pg. 28 NADA’s Dealer Guide to the LIFO Conformity Settlement .................................... December, 1997 ......... pg. 29 Suggestions for Dealing with Rev. Proc. 97-44 ....................................................... December, 1997 ......... pg. 31 Current Hot and Emerging Tax Issues........................................................................... December, 1996 ......... pg. 4 LIFO Conformity Update .............................................................................................. December, 1996 ......... pg. 10 Used Car Write-Downs & LIFO Procedures (from IRS Used Car Audit Guide)* ........ September, 1996 ........ pg. 23 LIFO Conformity: Calendar Year Dealerships (Flowchart) ................................ PG .. September, 1995 ........ pg. 22 LIFO Conformity: Fiscal Year Dealerships (Flowchart) ..................................... PG .. September, 1995 ........ pg. 23 LIFO Elections Terminated by Recent Letter Rulings: Why Congress or the Commissioner Should Intervene ........................................... September, 1995 ........ pg. 21 Termination Traps in Dealers’ Factory Financial Statements ....................................... December, 1994 ......... pg. 20 LIFO† - 2009 Year-End Planning for Dealers Year-End Planning for Dealers on LIFO ....................................................................... Year-End, 2009 .......... pg. 34 IRS Guidance on Section 481(a) Adjustment Issues … ILM 200935024................ Year-End, 2009 .......... pg. 35 For Dealerships Staying on LIFO for 2009 .............................................................. Year-End, 2009 .......... pg. 41 Where Significant Reductions in Inventory Levels Are Expected at Year-End....... Year-End, 2009 .......... pg. 43 For Dealerships Terminating LIFO Elections .......................................................... Year-End, 2009 .......... pg. 44

DEALER TAX WATCH


PAGE 24 I. ACCOUNTING & TAX ISSUES (continued) INVENTORIES (continued) LIFO† - Changes in LIFO Inventory Accounting Methods De Filipps’ 2010 AICPA Presentation … Practitioner’s Nightmare: Uncertainty & Dealership Tax Issues Revised Form 3115 for Changes in Accounting Methods & Revised Instructions .. Year-End, 2010 .......... pg. 47 Importance of the Concept of “Separate Trades or Businesses” ......................... Year-End, 2010 .......... pg. 48 Form 3115 & Instructions … New Revisions & New Concerns ................................... Mid-Year, 2010.......... pg. 24 Frequently Encountered Dealership Automatic Changes in Methods ...................... Mid-Year, 2010.......... pg. 25 Form 3115: At a Glance .......................................................................................... Mid-Year, 2010.......... pg. 27 Engagement Letters for Form 3115 Filings … Should You Have Them? ............... Mid-Year, 2010.......... pg. 32 Sec. 481(a) Adjustments & Format for Sec. 481(a) Adjustment with 2 Components* ........ Mid-Year, 2010.......... pg. 33 Changes in Inventory (Section 263A) Methods … Form 3115, Schedule D, Part III* ....................................................................... Mid-Year, 2010.......... pg. 34 Revised Procedures for Securing Automatic Consent from the IRS to Make Changes in LIFO and Other Methods of Accounting (Rev. Proc. 2008-52)*......................... Year-End, 2008 .......... pg. 14 Section-by-Section Analysis .................................................................................... Year-End, 2008 .......... pg. 24 Automatic CAMs Related to LIFO Inventories ....................................................... Year-End, 2008 .......... pg. 38 LIFO† - Combining LIFO Pools (Vehicle-Pool Method … Rev. Proc. 2008-23 2009 NADA Convention … Dealer Tax Update by the IRS MVTA* LIFO Pooling Matters .............................................................................................. Mid-Year, 2009.......... pg. 11 What’s New from the IRS Point of View …Tracking Recent MVTA Presentations* .. Mid-Year, 2008.......... pg. 5 LIFO Pooling & IIR Process .................................................................................... Mid-Year, 2008.......... pg. 6 LIFO - Vehicle-Pool Method (Rev. Proc. 2008-23) ................................................ Mid-Year, 2008.......... pg. 12 Chief Counsel Memo 200825044 on Combining LIFO Pools ...................................... Year-End, 2008 .......... pg. 46 IRS Approves the Use of a Single, Combined LIFO Pool for All New Vehicles ................. Mid-Year, 2008.......... pg. 20 LIFO† - New & Used Vehicles - General De Filipps’ 2010 AICPA Presentation … Practitioner’s Nightmare: Uncertainty & Dealership Tax Issues LIFO (Last-In, First-Out) Inventory Valuation Matters ..................................... Year-End, 2010 .......... pg. 53 Will the Use of the LIFO Method Be Repealed? (Watch Out #8) ................................. December, 2007 ......... pg. 5 The Use of the IPIC LIFO Method Is Not Advisable for Automobile Dealerships … They Should Use the Alternative LIFO Method (Under Rev. Proc. 97-36) Instead . September, 2007 ........ pg. 6 2004 NADA Workshop Summary Report ..................................................................... March, 2004 ............... pg. 7 W.J. De Filipps’ Seminar Outline on Used Vehicles .................................................... September, 2003 ........ pg. 24 Used Vehicle LIFO … IRS Approves Simplified Method … Rev. Proc. 2001-23 ....... December, 2000 ......... pg. 2 LTR 199911044 Gives Advice on Dealer Pooling Under the Alternative LIFO Method ... June, 1999 .................. pg. 2 Used Car LIFO Computations Take a Hit in LTR 9853003 .......................................... March, 1999 ............... pg. 2

DEALER TAX WATCH


PAGE 25 I. ACCOUNTING & TAX ISSUES (continued) INVENTORIES (continued) LIFO† - Reserve Recapture Taxes in Changing from “C” Corp. to “S” Corp. Status Dealership (Haddad Motor Group) Successfully Sues CPA Firm for Improper Tax Advice over Built-in Gains Tax ................................................... Mid-Year, 2010.......... pg. 14 W.J. De Filipps’ Seminar Outline on LIFO, S Corps & QSub Groups ......................... September, 2003 ........ pg. 23 S Corp. Dealership Converting to LLC/“Partnership” Avoids LIFO Recapture Tax* .. December, 1996 ......... pg. 26 Recapture Tax in C to S Conversions … Rev. Proc. 94-61 ........................................... December, 1994 ......... pg. 22 LIFO† - Termination of LIFO Election & Other LIFO Recapture Issues Request for Relief from LIFO Recapture Due to Natural Disasters in 2011 ................. Year-End, 2012 .......... pg. 4 Repeal of LIFO and Other Inventory Accounting Methods .......................................... Year-End, 2012 .......... pg. 4 Strategy for a Dealer to Minimize LIFO Recapture When the Manufacturer Terminates a Franchise ..................................................... Mid-Year, 2011.......... pg. 7 Form 3115 & Instructions … New Revisions & New Concerns Terminating LIFO Elections … Section 263A CAM Ramifications ....................... Mid-Year, 2010.......... pg. 36 2009 NADA Convention … Dealer Tax Update by the IRS MVTA* Cost Segregation Studies for Auto Dealerships ....................................................... Mid-Year, 2009.......... pg. 8 Procedures for Terminating LIFO Elections ................................................................. Mid-Year, 2009.......... pg. 9 What’s New from the IRS Point of View …Tracking Recent MVTA Presentations* .. Mid-Year, 2008.......... pg. 5 LIFO Terminations … Automatic vs. Non-Automatic ............................................ Mid-Year, 2008.......... pg. 12 W.J. De Filipps’ Seminar Outline on LIFO Reserve Recapture Issues * ...................... September, 2003 ........ pg. 23 GM Pulls the Plug on Olds … & LIFO Tax Reserves Go Down the Drain * ............... December, 2000 ......... pg. 1 GM Dealers Low on LIFO Inventory May Face Stiff Recapture Consequences* ........ June, 1998 .................. pg. 18 †For all LIFO-related entries, see also the Index of Articles for LIFO Lookout (March 1991 - December 2012) Parts & Accessories Inventories - Use of Replacement Cost Method for Valuing P&A Inventories Revised Procedures for Securing Automatic Consent from the IRS to Make Changes in LIFO and Other Methods of Accounting (Rev. Proc. 2008-52)*......................... Year-End, 2008 .......... pg. 14 Section-by-Section Analysis .................................................................................... Year-End, 2008 .......... pg. 24 Automatic CAMs Related to Parts Inventories - Automobile Dealers ..................... Year-End, 2008 .......... pg. 35 Automatic CAMs Related to Parts Inventories - Heavy Equipment Dealers ........... Year-End, 2008 .......... pg. 36 Heavy Equipment Dealers’ Use of Replacement Cost for Valuing Parts Inventories Gets Official Approval from the IRS (Watch Out #10) … Rev. Proc. 2006-14 ...... December, 2005 ......... pg. 4 What the IRS Giveth Today … It May Taketh Away Tomorrow (Watch Out #11) ..... December, 2005 ......... pg. 4 W.J. De Filipps’ Seminar Outline on Parts &Accessories Inventories .......................... September, 2003 ........ pg. 25 Can Dealers Use Replacement Cost for Valuing Parts? ................................................ March, 2000 ............... pg. 2 1999 AICPA Auto Dealership Conf. IRS MVTA Update Comments* ........................ December, 1999 ......... pg. 5 The Two Biggest Tax Problems for Dealers Right Now Are the Use of Replacement Cost & Mountain State Ford Truck Sales .......................................... September, 1999 ........ pg. 1 Dealers Can’t Use Replacement Cost for Parts Inventories .......................................... March, 1999 ............... pg. 2

DEALER TAX WATCH


PAGE 26 I. ACCOUNTING & TAX ISSUES (continued) LEASING & TERMINAL RENTAL ADJUSTMENT CLAUSES (TRACs) Substance vs. Form and Other Issues (IRS Industry Specialist Update) * .......................... December, 1999 ......... pg. 7 Tax Court Says Ignore Terminal Rental Adjustment Clauses (TRACs) in Determining the Substance of Leasing Transactions … (Peaden v. Commissioner) .......................... December, 1999 ......... pg. 14 LEGAL - PROFESSIONAL FEES, DEDUCTIBILITY OF Allocation of Professional Fees Paid in the Acquisition of a Dealership ... West Covina Motors, Inc. Revisited* ............................................................................ Mid-Year, 2010.......... pg. 46 Step-by-Step Analysis of Computation Allowed by Tax Court* .................................. Mid-Year, 2010.......... pg. 50 West Covina Motors, Inc. … Aggressive Dealership Deductions Disallowed * Deductibility of Legal Fees re: Bankruptcy & Dealership Acquisition ........................ Mid-Year, 2009.......... pg. 26 Hood v. Comm. … Deductibility of Legal Fees & Expenses Paid for Another Party ......... Mid-Year, 2009.......... pg. 32 LIKE-KIND EXCHANGES - SECTION 1031 Passenger Automobiles & SUVs Are “Like-Kind” Sec. 1031 Property (Watch Out #10) . March, 2005 ............... pg. 6 LOANER VEHICLES Automotive Alert: Dealership Loaner Vehicle Fleets and Depreciation (January 2009) .... Mid-Year, 2009.......... pg. 16 2009 NADA Convention … Dealer Tax Update by the IRS MVTA* Depreciation of “Free Loaner” Vehicles ....................................................................... Mid-Year, 2009.......... pg. 15 LOANS TO DEALER-SHAREHOLDER & CONSTRUCTIVE DIVIDEND ISSUES One Dealership Family’s Consistent Losses to the IRS in its 10-Year War Over Constructive Dividends & Other Questionable Transactions* ............................. June, 2003 .................. pg. 11 At A Glance … The Cordes Saga ................................................................................. June, 2003 .................. pg. 12 IRS Audit Guide on Shareholder Loans vs. Constructive Dividends* .............................. June, 2001 .................. pg. 14 At a Glance. ................................................................................................................... June, 2001 .................. pg. 15 12 Critical or Key Factors ............................................................................................. June, 2001 .................. pg. 16 Checklist for Identifying Problem Areas .............................................................. PG... June, 2001 .................. pg. 20 Disguised Dividends Lurking in Related Party Transactions ........................................ June, 2001 .................. pg. 22 “Advances” from Offshore PORC to Dealer Are Taxable Dividends … W. F. McCurley . September, 1997 ........ pg. 30 Horse Operations: IRS Tells Dealership: “Quit Horsin’ Around” with Equine Assets* .... March, 1997 ............... pg. 26 Loans TO … And … FROM Shareholders (From Used Car Audit Guide)* ...................... September, 1996 ........ pg. 21 The Out-Of-Control (Unreasonable) Dealer Receivable … Yarbrough Olds Cadillac, et al. ... December, 1995 ......... pg. 3 The Ominous 8 Issues, Constructive Dividends and Fraud ........................................... December, 1995 ......... pg. 5 Factors the Tax Court Considered ................................................................................. December, 1995 ......... pg. 9 The Darker Side: Fraud Additions to Tax .................................................................... December, 1995 ......... pg. 14 Checklist for Identifying Possible Loan-Constructive Dividend Problem Areas ....... PG .. December, 1995 ......... pg. 10 Constructive Dividends Come in All Sizes, Shapes & From All Angles................... PG .. December, 1995 ......... pg. 12

DEALER TAX WATCH


PAGE 27 I. ACCOUNTING & TAX ISSUES (continued) MEALS & ENTERTAINMENT SUBSTANTIATION - SECTION 274(d) Tax Court Denies Car Salesman’s Unsubstantiated Business Expenses…Kevin O’Brien .......... September, 2000 ........ pg. 3 Salesman’s “Diary” Strongly Upsets Everybody’s Stomach …Raymond Strong .............. June, 1997 .................. pg. 7 NET OPERATING LOSS (CARRYBACKS) Tax Refunds May Be Larger under Year-End WHBA Change in Tax Law (Watch Out #7) .... Year-End, 2009 .......... pg. 6 More on Tax Relief Afforded by the 9/11/2001 Legislation (Watch Out #2)* ................... June, 2002 .................. pg. 2 Recent Tax Relief (Job Creation and Worker Assistance Act of 2002) May Require Amended Returns … Extended Carryback Period for Net Operating Losses ............... March, 2002 ............... pg. 5 PERSONAL HOLDING COMPANIES Metro Leasing & Development Corp. … A Really Good Case Study ............................... June, 2002 .................. pg. 12 Personal Holding Company Status/Classification Worksheet ................................... PG .. June, 2002 .................. pg. 30 PREPAID EXPENSES Deducting Prepaid Expenses under the “12-Month” Rule (Watch Out #12) .................... March, 2005 ............... pg. 32 PRODUCER OWNED REINSURANCE COMPANIES (PORCs) - INCLUDING VEHICLE SERVICE CONTRACTS (VSCs) Dealer PORCs Update (Watch Out #8) .............................................................................. Year-End, 2008 .......... pg. 6 A Few Current IRS Audit Scenarios … Reinsurance Companies ...................................... September, 2006 ........ pg. 8 Abusive Reinsurers (Watch Out #9) * ................................................................................ June, 2006 .................. pg. 3 IRS Automotive Alert! … October, 2000 … Service Contract “Overpayment” Programs May Improperly Divert Dealership Income................................................................... March, 2006 ............... pg. 46 IRS TAMs on PORCs Now Say They’re OK (Watch Out #3) … (TAMs 200453012 & -013).......March, 2005 ............... pg. 2 PORC & Insurance Arrangements in Two TAMs … Are Not Shams ................................ March, 2005 ............... pg. 18 Favorable Rulings on Reinsurance Programs by the IRS ................................................... March, 2005 ............... pg. 24 IRS Updates Its Audit Technique Guide for Automobile Dealerships * Vehicle Service Contracts Audit Technique Flowchart................................................. March, 2005 ............... pg. 13 Dealer Agent & Dealer Obligor Programs … Tax Issues & IRS Audit Techniques .........March, 2005 ............... pg. 14 VSCs & Suspect Oversubmit Situations ........................................................................ March, 2005 ............... pg. 15 Possible Income Diversion & Oversubmit Programs .................................................... March, 2005 ............... pg. 16 PORC Update Conference … Nov. 2004 - Dallas, Texas … A Summary Report ............ December, 2004 ......... pg. 9 Update & Significant PORC Changes Made by the Pension Funding Equity Act of 2004 ....... September, 2004 ........ pg. 15 Notice 2002-70 Disclosure Requirements … Including “Grandfather” Exemption Position & More Forms 8886 Proformas ....... September, 2004 ........ pg. 16 New Tax Changes for PORCs for 2004 ........................................................................ September, 2004 ........ pg. 21 Automotive News PORC Article Stirs Controversy ....................................................... September, 2004 ........ pg. 26 California’s New Disclosure Legislation … How “Bad” Are These Requirements? .... September, 2004 ........ pg. 28 IRS Notice 2004-65 … Dealer PORCs Set Free ........................................................... September, 2004 ........ pg. 30 2004 NADA Workshop Summary Report on PORCs ........................................................ March, 2004 ............... pg. 8

DEALER TAX WATCH


PAGE 28 I. ACCOUNTING & TAX ISSUES (continued) PRODUCER OWNED REINSURANCE COMPANIES (PORCs) - INCLUDING VEHICLE SERVICE CONTRACTS (VSCs) (continued) IRS Audit of PORC Activities & 2003 Tax Return Reporting - Disclosure Issues ............ December, 2003 ......... pg. 14 IRS Audit of PORC Activities ............................................................................................ December, 2003 ......... pg. 15 Form 8886 Instructions ....................................................................................................... December, 2003 ......... pg. 20 Form 8886 Pro Forma ........................................................................................................ December, 2003 ......... pg. 21 W.J. De Filipps’ Seminar Outline on PORCs ..................................................................... September, 2003 ........ pg. 19 PORC Update … What’s the IRS Really up to? … Is the IRS Eating More PORK? ......... June, 2003 .................. pg. 4 An Update on PORCs and Notice 2002-70 ......................................................................... March, 2003 ............... pg. 3 The IRS Broadens its Attack on Tax Shelters to Include Dealer PORCs … Notice 2002-70 .... December, 2002 ......... pg. 4 IRS Recent Activity Against (Abusive) Tax Shelters* ................................................. December, 2002 ......... pg. 6 At a Glance … Putting Notice 2002-70 into Perspective .............................................. December, 2002 ......... pg. 8 Full Text of Notice 2002-70 & IRS Outline Notes ........................................................ December, 2002 ......... pg. 10 Industry Insider: Background, Update & Conclusions About Abusive Tax Shelters .... December, 2002 ......... pg. 14 Disclosure Statements in Income Tax Returns for Reportable or Listed Transactions* “Old” & “New” Reg. Sec. 6011-4T Requirements .................................................. December, 2002 ......... pg. 18 Disclosure Statements … Form & Content .............................................................. December, 2002 ......... pg. 22 Tax Return Instructions for Tax Shelter Disclosure Statements .............................. December, 2002 ......... pg. 23 One-Size-Fits-All (?) Disclosure Statement … Reg. Sec. 6011-4T/Form 8886 .PG .. December, 2002 ......... pg. 24 Checklist for Evaluating PORC Exposure to IRS Attack ..................................... PG .. December, 2002 ......... pg. 26 Dealers Can’t Have Fast Write-Off of Premiums Paid for Vehicle Service Contract Insurance ... Appeals Court Upholds Tax Court in Bob Wondries Motors, Inc. ............ December, 2001 ......... pg. 24 Dealer Reinsurance Company Arrangements … Favorable Developments ....................... June, 2001 .................. pg. 2 Dealers Can’t Have Fast Write-Off of Premiums Paid for Vehicle Service Contract Insurance … IRS Prevails Again in Toyota Town, Inc. ....... June, 2000 .................. pg. 14 1999 AICPA Auto Dealership Conf. IRS MVTA Update Comments on PORCs* ............ December, 1999 ......... pg. 8 Dealer Off-Shore Reinsurance Arrangements Get Some Favorable Guidance From LTR 199924001, FSA 1999-953 & ITA 199932007 ........................................... September, 1999 ........ pg. 17 Appeals Court Upholds Immediate Tax on Rameau Johnson’s Service Contract Sales, But Allows Immediate Deduction for Matching Costs ................................................. September, 1999 ........ pg. 6 Issues & Holdings in Rameau Johnson .................................................................... September, 1999 ........ pg. 7 VSCs, Dealer Obligors & the Service Warranty Income Method (SWIM) ........................ September, 1999 ........ pg. 10 How the SWIM Method Works: Rev. Proc. 97-38 ....................................................... September, 1999 ........ pg. 12 Checklist for VSC Issues & Problem Areas .............................................................. PG .. September, 1999 ........ pg. 14 PORCs: More Attractive After TRA ‘97 ........................................................................... March, 1998 ............... pg. 16 VSCs, Rev. Procs. 97-37 & 38, and the SWIM Method ..................................................... September, 1997 ........ pg. 6 Advances from Offshore PORC to Dealer Are Taxable Dividends - W. F. McCurley * .... September, 1997 ........ pg. 30 Dealers Using Escrow Funds for VSCs Can’t Avoid Full Tax on Proceeds in Year of Sale…Rameau Johnson ................................................................................ September, 1997 ........ pg. 15 What the Tax Court Said in Rameau Johnson ......................................................... September, 1997 ........ pg. 23 VSC-PORC Conference Report .......................................................................................... September, 1997 ........ pg. 26 PORCs: Current Hot and Emerging Tax Issues ................................................................. December, 1996 ......... pg. 9 PORC Conference: Oink … Oink * ................................................................................... September, 1996 ........ pg. 10 Money on the Table … A PORC Primer Resource ............................................................. March, 1996 ............... pg. 3 Hinshaw’s, Inc. - Tax Treatment of VSCs … LTR 9417028 .............................................. September, 1994 ........ pg. 22

DEALER TAX WATCH


PAGE 29 I. ACCOUNTING & TAX ISSUES (continued) REBATE COUPONS Dealership Denied Accrual Basis Deduction Upon Issuance of Rebate Coupons - Spitzer Columbus, Inc. ................................................................................................... September, 1995 ........ pg. 8 RECOVERY OF LEGAL FEES FROM IRS Recovery of Legal Fees When IRS is Unreasonable … Section 7430 & Beaver Bolt ........ March, 1997 ............... pg. 24 RENT PAYMENTS … TIMING, DEDUCTIBILITY & SECTION 467 Dealership Facility Rent Payments & Section 467 (Watch Out #12) ................................. Mid-Year, 2010.......... pg. 6 S CORPORATIONS … SHAREHOLDER BASIS IN STOCK & IN INDEBTEDNESS Creating Basis (in Stock & in Debt) so that S Corp. Losses Can Be Currently Deducted (Watch Out #6) .............................................................................................. Year-End, 2012 .......... pg. 2 Creating Basis (in Stock & in Debt) So That S Corp. Losses Can Be Currently Deducted ...... Year-End, 2012 .......... pg. 18 James Maguire et al. v. Comm. … Good Tax Planning Pays Off ................................. Year-End, 2012 .......... pg. 18 Proposed Regulations & Transactions to Increase Basis in Indebtedness ..................... Year-End, 2012 .......... pg. 24 SCHEDULE M-3 … RECONCILIATION OF BOOK-TAX DIFFERENCES Schedule M-3 … Draft for 2005 … Continuously Evolving .............................................. September, 2005 ........ pg. 16 Schedule M-3 … Is It Really a Problem for Dealership CPAs? (Watch Out #4) ............... March, 2005 ............... pg. 3 New Schedule M-3 … Draft as of October 25, 2004 … Closer to the Final Version ......... December, 2004 ......... pg. 16 New Schedule M-3 for 2004 … More Tax Return Detail Work & Disclosure* ................. June, 2004 .................. pg. 2 Lifting the Veil of Obscurity … Transparency and the IRS’ Great Expectations ......... June, 2004 .................. pg. 3 At A Glance, Practitioner Comments & Comparison of 1st and 2nd Drafts of Sch. M-3 ... June, 2004 .................. pg. 6 Draft of Final Version … July 7, 2004 .......................................................................... June, 2004 .................. pg. 14 IRS Guidance for Completing Schedule M-3 and Frequently Asked Questions (FAQs) ..... June, 2004 .................. pg. 20 Timing Differences, Income-Loss Items & Expense & Deduction Items ............... June, 2004 .................. pg. 17 Action Plan for Complying with New Schedule M-3 Reporting Requirements ... PG ... June, 2004 .................. pg. 24 SEC. 401(k) PLAN CONTRIBUTIONS WITHHELD FROM EMPLOYEES, REMITTANCE TO PLAN ADMINISTRATORS Dealerships Must Promptly Remit Section 401(k) Plan Contributions Withheld from Employees Dept. of Labor Enforcement Letter ............................................................................... December, 2007 ......... pg. 26 IRS & Prohibited Transactions Problems - Form 5330 Filings ..................................... December, 2007 ......... pg. 29 Revenue Ruling 2006-38 … Computation of First Tier (15%) Prohibited Transaction Excise Tax (Sec. 4975) When Payments to the Plan Are Not Timely Remitted ...... December, 2007 ......... pg. 32 SEC. 531 PENALTY TAX ON UNREASONABLE ACCUMULATION OF EARNINGS Metro Leasing & Development Corp. … A Really Good Case Study Metro’s Liability for Penalty Tax on the Unreasonable Accumulation of Earnings* ... June, 2002 .................. pg. 24

DEALER TAX WATCH


PAGE 30 I. ACCOUNTING & TAX ISSUES (continued) SETTLEMENTS & AWARDS Dealer Fully Taxed on Proceeds from Franchise-Related Settlement: Wade H. Griffin III* ..........March, 2001 ............... pg. 18 Possible Implications for Dealers in Transition* ........................................................... March, 2001 ............... pg. 20 SPIN-OFFs & SPLIT-OFFs - SECTION 355 Tax-Free Spin-Offs and Split-Offs for Dealerships Over 5 Years Old* ............................. September, 1998 ........ pg. 4 Corporate Business Purposes for Spin-Offs, Split-Offs & Split-Ups*................................ September, 1998 ........ pg. 12 LTR 9829050: A Tax-Free Split-Off to Settle Shareholder Disputes* .............................. September, 1998 ........ pg. 14 LTR 9616023: A Tax-Free Spin-Off to Reduce Inventory Financing Costs* .................... September, 1998 ........ pg. 17 LTR 8712043: A Tax-Free Split-Off to Satisfy the Factory…A Project 2000 Precursor* September, 1998 ........ pg. 20 LTR 9522036: A Tax-Free Split-Off to Separate Parents from Their Children* ............... September, 1998 ........ pg. 23 Rev. Rul. 75-337: A Tax-Free Split-Off to Protect a 70-Year Old Dealer’s Franchise* ... September, 1998 ........ pg. 24 TAX RETURN PENALTIES & DISCLOSURES - PREPARER PENALTIES, TAXPAYER (ACCURACY-RELATED) PENALTIES, ETC. All Tax Returns - Section 6662 & 2007 Amendments to Section 6694 De Filipps’ 2010 AICPA Presentation … Practitioner’s Nightmare: Uncertainty & Dealership Tax Issues IRS Movement to Deputize CPAs to Become More Like IRS Agents ............... Year-End, 2010 .......... pg. 51 Business Acquisitions & the Broad Reach of Sec. 197 … Accuracy-Related Penalties Were Not Assessed in Recovery Group, Inc. ............................................ Mid-Year, 2010.......... pg. 43 Standard for Tax Return Preparer Penalties Is Relaxed - But, There’s More (Watch Out #10) ....... Year-End, 2008 .......... pg. 7 Standard for Undisclosed Positions & “Substantial Authority” under Sec. 6662 .... Year-End, 2008 .......... pg. 7 Stricter Standards for Avoidance of Preparer Penalties Require More Due Diligence Small Business & Work Opportunity Act of 2007 … Amendments to Section 6694...... December, 2007 ......... pg. 24 Notices 2008-11, -12, -13 ........................................................................................ December, 2007 ......... pg. 24 FIN 48 … Financial Accounting Standards Board (FASB) Interpretation No. 48 (FIN 48) … Accounting for Uncertainty in Income Taxes Fin 48 Postponement of Effective Date (Watch Out #7) ............................................... December, 2007 ....... pg. 5

DEALER TAX WATCH


PAGE 31 I. ACCOUNTING & TAX ISSUES (continued) TAX RETURN PENALTIES & DISCLOSURES - PREPARER PENALTIES, TAXPAYER (ACCURACY-RELATED) PENALTIES, ETC. (continued) Income Tax Returns - Section 6662 & Pre-2007 Amendments to Section 6694 West Covina Motors, Inc. … Aggressive Dealership Deductions Disallowed* Accuracy-Related Penalties ..................................................................................... Mid-Year, 2009.......... pg. 30 The IRS Broadens its Attack on Tax Shelters to Include Dealer PORCs … Notice 2002-70 Disclosure Statements in Income Tax Returns for Reportable or Listed Transactions* “Old” & “New” Reg. Sec. 6011-4T Requirements .............................................. December, 2002 ......... pg. 18 Disclosure Statements … Form & Content .......................................................... December, 2002 ......... pg. 22 Tax Return Instructions for Tax Shelter Disclosure Statements ........................... December, 2002 ......... pg. 23 One-Size-Fits-All (?) Disclosure Statement ................................................ PG .. December, 2002 ......... pg. 24 Adequate Disclosure in Tax Returns Avoids Penalties: Rev. Proc. 94-74 ................... December, 1994 ......... pg. 3 Burien Nissan, Inc. … Dealer Non-Compete Agreement Trapped by Section 197....... June, 2001 .................. pg. 10 Froehlich, Lee D. … Dealers Repayment on Floorplan Guarantee Gets Limited Tax Benefits ....................................................................................... December, 1996 ......... pg. 18 Johnson, Michael H. … Auto Dealer Allowed to Defer Gain on Sale of Property Sold Under Threat of Condemnation: Ultimately, Relief & No Penalties ...................... March, 1999 ............... pg. 15 McCurley, William F. … “Advances” from Off-Shore PORC to Dealer Are Dividends .... September, 1997 ........ pg. 31 Metro Leasing & Development Corp. … Accuracy-Related Penalty Issues ................. June, 2002 .................. pg. 28 Peacock, James R. … Tax Court Sustains 20% Accuracy Penalties re: Fishing Losses .... September, 2002 ........ pg. 11 Shotgun Delivery, Inc. … Reimbursement Plan - Penalties Reversed by Appeals Court .... December, 2001 ......... pg. 23 Shotgun Delivery, Inc. … Reimbursement Plan - Penalties Applied by Tax Court ...... March, 2000 ............... pg. 8 Strong, Raymond … Salesman’s “Diary” Strongly Upsets Everybody’s Stomach ....... June, 1997 .................. pg. 10 Yarbrough Olds Cadillac et al. v. Comm. … The Darker Side: Fraud Additions to Tax .... December, 1995 ......... pg. 14

*Note: All of the cases above are listed separately by topic, etc. elsewhere. Gift Tax Returns Inadequate Disclosure of LLC Interest in Gift Tax Return Fails to Start Statute of Limitations* ....................................................................... March, 2003 ............... pg. 18 Final Regulations Tell How Adequate Disclosure Will Prevent IRS from Revaluing Prior Gifts * ...................................................................................... March, 2000 ............... pg. 12 Adequate Disclosure Requirements ......................................................................... March, 2000 ............... pg. 18 Qualified Appraisal and Appraiser Standards .......................................................... March, 2000 ............... pg. 19 Suggestions for Working with the New Adequate Disclosure Standards ....... PG ... March, 2000 ............... pg. 20 Examples of (In)Adequate Disclosures .................................................................... March, 2000 ............... pg. 22 Effective Date Rules ................................................................................................ March, 2000 ............... pg. 24 Preliminary vs. Final Regulations ............................................................................ March, 2000 ............... pg. 25

DEALER TAX WATCH


PAGE 32 I. ACCOUNTING & TAX ISSUES (continued) TAX SHELTERS - ABUSIVE TAX SHELTERS IRS Is Still Looking for Listed Transactions - IDRs Used by IRS for Mandatory Tax Shelter Information ................................................................................................ June, 2006 .................. pg. 6 Abusive Reinsurers (Watch Out #9) * ................................................................................ June, 2006 .................. pg. 3 The IRS Broadens its Attack on Tax Shelters to Include Dealer PORCs … Notice 2002-70* ......December, 2002 ......... pg. 6 IRS Red Flags for Spotting Abusive Tax Shelters* ............................................................ September, 2000 ........ pg. 23 TECHNICIAN TOOL PLANS - SECTION 62(c) ACCOUNTABLE & NONACCOUNTABLE PLANS, OTHER REIMBURSEMENT ARRANGEMENTS & RENTAL PROGRAMS Rev. Rul. 2012-25 … Four More Nails in the Coffin for Tool Plans (Watch Out #13) ...... Year-End, 2012 .......... pg. 9 IRS Finds Another Non-Compliant Tool Plan … ILM 201120021 .................................... Mid-Year, 2011.......... pg. 46 IRS Approves a “Tool Reimbursement Plan” in LTR 200930029 ..................................... Year-End, 2009 .......... pg. 38 2009 NADA Convention … Dealer Tax Update by the IRS MVTA* Employment Tax Issues of Employer Tool (Reimbursement) Plans ............................ Mid-Year, 2009.......... pg. 10 What’s New from the IRS Point of View …Tracking Recent MVTA Presentations* ....... Mid-Year, 2008.......... pg. 5 Employee Tool & Equipment Plans .............................................................................. Mid-Year, 2008.......... pg. 9 Tool Equipment Plans Update ........................................................................................... Mid-Year, 2008.......... pg. 48 IRS Task Force Alert Advises Tool Plans to “Take a Cautious Approach” .................. Mid-Year, 2008.......... pg. 49 IRS Revised Coordinated Issue Paper Hammers Employee Tool Plans (July, 2008) .. Mid-Year, 2008.......... pg. 50 Technicians’ Tool Reimbursement Plans - Update ............................................................. December, 2007 ......... pg. 34 IRS MVTA 2007 Conference Presentation Slides on Employee Tool & Equipment Plans .................................................................................................. December, 2007 ......... pg. 35 ILM 200745018 … Tool Reimbursement Plan is a Nonaccountable Plan Overview .................................................................................................................. December, 2007 ......... pg. 34 Facts ......................................................................................................................... December, 2007 ......... pg. 37 Analysis ................................................................................................................... December, 2007 ......... pg. 42 Discussion of Law .................................................................................................... December, 2007 ......... pg. 46 Sec. 62(c) Tool Reimbursement Accountable Plans Update .............................................. June, 2007 .................. pg. 20 IRS Information Document Request (IDR) re: Tool Plans (Form 4564) ..................... June, 2007 .................. pg. 21 Section 6700 Tax Shelter Investigation Letter re: Tool Plans ...................................... June, 2007 .................. pg. 28 2006 AICPA Auto Dealership Conference IRS MVTA Update on Tool Plans .................. December, 2006 ......... pg. 15 A Second Check on Tool Reimbursement Plans ................................................................ December, 2006 ......... pg. 22 Accountable Plans under Sec. 62(c) for Reimbursing Technicians for their Tool Costs .... September, 2006 ........ pg. 10 Namyst Loses Again Because Excess Reimbursements Were Not Returned to Employer ....June, 2006 .................. pg. 4 IRS Automotive Alert! … Jan., 2006… Revenue Ruling 2005-52 ...................................... March, 2006 ............... pg. 38 2005 AICPA Auto Dealership Conference IRS MVTA Update on Tool Plans .................. December, 2005 ......... pg. 10 Rev. Rul. 2005-52 Emphasizes Strict Compliance … Obviously Flawed Plans Take a Hit ...September, 2005 ........ pg. 11 Additional Criteria IRS Will Apply in Considering Proposals Re: Accountable Plans ...... September, 2005 ........ pg. 14 Tool Plan Revenue Ruling (2005-52) Doesn’t Say Anything New .................................... September, 2005 ........ pg. 15

DEALER TAX WATCH


PAGE 33 I. ACCOUNTING & TAX ISSUES (continued) TECHNICIAN TOOL PLANS - SECTION 62(c) ACCOUNTABLE & NONACCOUNTABLE PLANS, OTHER REIMBURSEMENT ARRANGEMENTS & RENTAL PROGRAMS (continued) A Comprehensive Report on Technicians’ Tool Reimbursement Plans Under Section 62(c) .......June, 2005 .................. pg. 4 Executive Summary....................................................................................................... June, 2005 .................. pg. 7 Background Considerations Generalities, Practicalities & Broad Range of Application ...................................... June, 2005 .................. pg. 10 “Typical” Technician Profile ................................................................................... June, 2005 .................. pg. 11 The Technician’s Toolbox ....................................................................................... June, 2005 .................. pg. 12 Multiplicity of “Reimbursement Plans” in the Marketplace .................................... June, 2005 .................. pg. 13 Taxability of Employer Reimbursements ...................................................................... June, 2005 .................. pg. 16 15 Years of Limited IRS Guidance 1990 … Treasury Decision 8324 .............................................................................. June, 2005 .................. pg. 19 1999 … First Warnings as IRS Discusses Accountable Plans for Auto Dealers at an AICPA Dealership Conference .......................................................... June, 2005 .................. pg. 20 2000 … Coordinated Issue Paper … Generally Negative on Tool Reimbursement Payments to Auto Dealer Service Technicians ........................................... June, 2005 .................. pg. 22 2002 … Rev. Proc. 2002-41 … Using Accountable Plans to Pay “Deemed Substantiated” Hourly Rates to Pipeline Rig Welders ................................ June, 2005 .................. pg. 27 2004 … Rev. Rul. 2004-1 … Using Accountable Plan Arrangements to Pay Mileage Allowances to Delivery / Courier Employees .............................. June, 2005 .................. pg. 28 2004 … Namyst in the Tax Court ............................................................................. June, 2005 .................. pg. 31 Timeline of Selected Sec. 62(c) Tool Plan Cases, Rulings & Developments … 1997-2005 . June, 2005 .................. pg. 32 2001 … FSA 200127004 ......................................................................................... June, 2005 .................. pg. 33 2001 … FSA 200132003 ......................................................................................... June, 2005 .................. pg. 34 2000 … Trucks, Inc. v. U.S. ..................................................................................... June, 2005 .................. pg. 34 2000 … Trans-Box Systems, Inc. v. U.S................................................................... June, 2005 .................. pg. 35 2000 … DePaz, et al. v. Comm. ............................................................................... June, 2005 .................. pg. 35 2000 … ILM 200006005 ......................................................................................... June, 2005 .................. pg. 36 2000 … Shotgun Delivery, Inc. v. U.S. .................................................................... June, 2005 .................. pg. 36 1999 … ILM 199921003 ......................................................................................... June, 2005 .................. pg. 37 1999 … ILM 199917011 ......................................................................................... June, 2005 .................. pg. 37 Visualizing the Components ............................................................................................... June, 2005 .................. pg. 38 “Wage Recharacterization” A Difficult, Technical Issue ..................................................................................... June, 2005 .................. pg. 39 Toward Resolving Opposing Viewpoints ................................................................ June, 2005 .................. pg. 40 Dangers in the Handling of “Return of Excess” Reimbursements ................................ June, 2005 .................. pg. 41 Questions Needing Answers … If I Could Write the Rules, Here Are the Points I’d Cover ................................. June, 2005 .................. pg. 42 … But, Since I Can’t, Here Are Some Practical Suggestions .................................. June, 2005 .................. pg. 44 Considerations in Evaluating Exposure to Plan Challenges by the IRS ............... PG ... June, 2005 .................. pg. 45

DEALER TAX WATCH


PAGE 34 I. ACCOUNTING & TAX ISSUES (continued) TECHNICIAN TOOL PLANS - SECTION 62(c) ACCOUNTABLE & NONACCOUNTABLE PLANS, OTHER REIMBURSEMENT ARRANGEMENTS & RENTAL PROGRAMS (continued) Tool Plans … “IRS Unfairly Attacks the Tools Industry” .................................................. March, 2005 ............... pg. 4 Tool Reimbursement Plans … An Update (Watch Out #2) ................................................ March, 2005 ............... pg. 1 Year-End Tax Planning Opportunities Letter for Dealer Clients re: Tool Plans ....... PG ... September, 2004 ........ pg. 9 Update on Accountable Plans for Service Technicians’ Tool Expenses ............................. September, 2004 ........ pg. 7 2004 NADA Workshop Summary Report on Tool Plans ................................................... March, 2004 ............... pg. 9 2003 AICPA Auto Dealership Conference IRS MVTA Update on Tool Plans .................. December, 2003 ......... pg. 10 W.J. De Filipps’ Seminar Outline on Tool Plans ................................................................ September, 2003 ........ pg. 18 Dealer Tax Issues Strike Out (Watch Out #4)..................................................................... September, 2003 ........ pg. 2 Request for Guidance from the IRS under Industry Issue Resolution Program .................. June, 2003 .................. pg. 6 Update on Recent Revenue Procedures on Tool Plans for Other Industries (Watch Out #6) .... June, 2002 .................. pg. 3 Appeals Court Reverses Shotgun Delivery Summary Judgment on Penalty Assessments .....December, 2001 ......... pg. 23 Two FSAs (200127004 & 200132003) Shed More Light on IRS Objections to Plans ....... September, 2001 ........ pg. 6 IRS Issues Negative Opinion … ILM 200006005 .............................................................. September, 2000 ........ pg. 4 IRS Finalized Coordinated Issue Paper (June, 2000) .......................................................... September, 2000 ........ pg. 6 Considerations in Evaluating Exposure…Service Tech Tool Plans .......................... PG... September, 2000 ........ pg. 12 Another Arrangement Fails to Deliver Equipment Rental Benefits - De Paz, v. Comm. .... June, 2000 .................. pg. 12 IRS Hammers Auto Dealer Plan While Shotgun Delivery’s Plan Is Shot Down in Court ......... March 2000 ................ pg. 6 1999 AICPA Auto Dealership Conference IRS MVTA Update* ....................................... December, 1999 ......... pg. 7 Technician Tool Rental & Reimbursement Plans - Part 2 .................................................. December, 1999 ......... pg. 10 The Two Biggest Tax Problems for Dealers Right Now … Technician Tool Plans ........... September, 1999 ........ pg. 1 Tool Plans … A Free Lunch … With Some Indigestion? (ILMs 199917011 & 199921003) .......June, 1999 .................. pg. 3 The Accountable Plan Requirements Under Section 62(c) ................................................. June, 1999 .................. pg. 8 Five Warnings re: Service Technician Tool Rental Plans .................................................. June, 1999 .................. pg. 9 So You Want to Be a Test Case, Do You? … Here’s Some of What the IRS Will Want to Know ..June, 1999 .................. pg. 11 Technician Tool Rentals: Sound Plans or Schemes? ......................................................... September, 1998 ........ pg. 3 TRANSFEREE LIABILITY Auto Dealer Held Not Responsible for Unpaid Luxury Vehicle Excise Taxes (Watch Out #3) ....September, 2002 ........ pg. 2 UNCERTAIN TAX POSITIONS, DISCLOSURE IN SCHEDULE UTP OF TAX RETURN Schedule UTP for Reporting Uncertain Tax Positions Looms Somewhat Larger this Year (Watch Out #11) ............................................................... Year-End, 2012 .......... pg. 8 Frequently Asked Questions - March 23, 2011 (Watch Out #7) ......................................... Mid-Year, 2011.......... pg. 8 Reporting Uncertain Tax Positions to the IRS .................................................................... Year-End, 2010 .......... pg. 17 The IRS’ New Reporting Initiative for 2010 ...................................................................... Mid-Year, 2010.......... pg. 8 UNCLAIMED FUNDS Dealers Holding Unclaimed Funds Should Treat Them Properly ...................................... September, 1999 ........ pg. 3

DEALER TAX WATCH


PAGE 35 I. ACCOUNTING & TAX ISSUES (continued) VEHICLE CREDITS & ALTERNATIVE MOTOR VEHICLE CREDITS - SECTION 30B Automotive Alert!… Alternative Motor Vehicle Credits … Notice 2006-9 (Jan. 2006) ..... March, 2006 ............... pg. 33 2005 AICPA Auto Dealership Conference IRS MVTA Update ......................................... December, 2005 ......... pg. 12 Practice Development Opportunity Buried in Recent Automotive Alert! … Phase-Out Dates for Clean-Fuel Property and Certain Electric Vehicles (Watch Out #9) ... March, 2005 ............... pg. 6 VEHICLE SERVICE CONTRACTS (VSCs) … See PRODUCER OWNED REINSURANCE COMPANIES (PORCs) in this section WORKER CLASSIFICATION: EMPLOYEE VS. INDEPENDENT CONTRACTOR STATUS Used Car Salespersons are Not Employees … Appeals Court Overturns District Court & IRS ........September, 1996 ........ pg. 14 Springfield D/B/A Douglas Motors (District Court, December 4, 1994) ............................ March, 1995 ............... pg. 12 Section 530 Safe Harbor Relief Flowchart ......................................................................... September, 1996 ........ pg. 17 Revenue Ruling 87-41: 20 Factors - Long Form ............................................................... March, 1995 ............... pg. 20 Worker Classification Analysis Worksheet ............................................................... PG .. March, 1995 ............... pg. 22 Worker Classification Questionnaire ......................................................................... PG .. March, 1995 ............... pg. 23 Worker Classification Selected References ........................................................................ March, 1995 ............... pg. 24

DEALER TAX WATCH


PAGE 36 II. UNICAP - UNIFORM INVENTORY COST CAPITALIZATION REQUIREMENTS (SECTION 263A) IRC Section 263A: Capitalization & Inclusion of Certain Expenses in Inventory Costs REVENUE PROCEDURE 2010-44 … DEALERSHIP SECTION 263A SAFE HARBOR ELECTIONS Section 263A … Choppy Waters Beyond the Safe Harbor Limits .................................... Year-End, 2011 .......... pg. 22 Purchasing Costs … Allocation & Capitalization ......................................................... Year-End, 2011 .......... pg. 24 Initial Tax Return Statement of Elections ..................................................................... Year-End, 2011 .......... pg. 26 Evaluating Form 3115 Filed by Dealerships (Checklist #1) ................................. PG ... Year-End, 2011 .......... pg. 27 Evaluating Dealership Compliance Beyond the Safe Harbors (Checklist #2)......... PG ... Year-End, 2011 .......... pg. 28 Section 263A … Closure at Last! (Watch Out #2) ............................................................. Mid-Year, 2011.......... pg. 3 Filing Forms 3115 for Sec. 263A Safe Harbor Elections for Auto Dealerships ................. Mid-Year, 2011.......... pg. 18 Executive Summary....................................................................................................... Mid-Year, 2011.......... pg. 19 25-Year UNICAP Timeline for Dealerships … 1986 - 2011 ........................................ Mid-Year, 2011.......... pg. 21 Completing Form 3115 ... A Page-by-Page Overview .................................................. Mid-Year, 2011.......... pg. 24 Template for Form 3115 Narrative Statement Attachment ........................................... Mid-Year, 2011.......... pg. 29 Template Appendix: Additional Disclosures to Be Considered ................................... Mid-Year, 2011.......... pg. 32 Supplementary Information & Attachments Dealership-Related Automatic Changes in Method of Accounting under Sec. 263A #22 … Certain UNICAP Methods Used by Resellers & Reseller-Producers .......... Mid-Year, 2011.......... pg. 34 #23 … Certain UNICAP methods Used by Producers & Reseller-Producers ........ Mid-Year, 2011.......... pg. 36 #150 … Change to Treat Certain Sales Facilities as Retail Sales Facilities ....... Mid-Year, 2011.......... pg. 37 #151 … Change to Be Treated as Reseller Without Production Activities ........ Mid-Year, 2011.......... pg. 37 IRS Automotive Alert (January, 2011) … “Rev. Proc. 2010-44 Provides UNICAP Relief” ................................................ Mid-Year, 2011.......... pg. 38 Checklist for Evaluating Dealership Compliance with Sec. 263A ....................... PG ... Mid-Year, 2011.......... pg. 41 Section 263A - IRS Finally Issues Guidance for Dealerships … Some Good News - Some Bad News ............................................................................ Year-End, 2010 .......... pg. 22 Summary of RP 2010-44 Ramifications ........................................................................ Year-End, 2010 .......... pg. 23 Text of Revenue Procedure 2010-44 ............................................................................. Year-End, 2010 .......... pg. 35 Template for Form 3115 Narrative Statement Disclosures ........................................... Year-End, 2010 .......... pg. 40

DEALER TAX WATCH


PAGE 37 II. UNICAP - UNIFORM INVENTORY COST CAPITALIZATION REQUIREMENTS (SECTION 263A) (continued) IRC Section 263A: Capitalization & Inclusion of Certain Expenses in Inventory Costs MORATORIUM ON RAISING SEC. 263A ISSUES (2009-2010) Section 263A Issues Discussion at 2010 AICPA (IRS Update Workshop) ........................ Year-End, 2010 .......... pg. 10 Sec. 481(a) Adjustments & Presentation Format for Sec. 481(a) Adjustment with 2 Components* ...................................................................................................... Mid-Year, 2010.......... pg. 33 Changes in Inventory (Section 263A) Methods … Form 3115, Schedule D, Part III* .................................................................................. Mid-Year, 2010.......... pg. 34 Sec. 263A Issues Workshop at NADA ............................................................................... Mid-Year, 2010.......... pg. 19 IRS Moratorium on Raising Sec. 263A Issues Urges Dealerships to File Forms 3115 to Change Their Accounting Methods … What Should a Dealership Do? … LMSB Industry Directors Directive (IDD - September 2009) ...................................... Year-End, 2009 .......... pg. 14 Timeline of Recent Developments under Section 263A … 2007-2009 ........................ Year-End, 2009 .......... pg. 14 IRS Notice 2009-25 Requests Comments on Updating Sec. 263A Regulations ........... Year-End, 2009 .......... pg. 15 IRS Retail Counsel Responds to Comments Relating to Property Acquired for Resale ......... Year-End, 2009 .......... pg. 15 IRS Declares Moratorium on Raising Sec. 263A Issues in Audits ................................ Year-End, 2009 .......... pg. 16 The Case for Dealerships Changing Sec. 263A Methods at This Time ........................ Year-End, 2009 .......... pg. 17 The Case Against Dealerships Changing Sec. 263A Methods at This Time ................. Year-End, 2009 .......... pg. 18 Summary of Sec. 263A Issues Raised in TAM 200736026 .......................................... Year-End, 2009 .......... pg. 19 The Case Against Dealerships “Jumping the Gun” to Change 263A Methods at this Time … Some (Random) Thoughts.......................................................... PG ... Year-End, 2009 .......... pg. 22 NADA Comments in Response to IRS Notice 2009-25 ................................................ Year-End, 2009 .......... pg. 24 IRS “Audit Tool Kit” for Fixing Sec. 263A Problems .................................................. Year-End, 2009 .......... pg. 25 Full Text of LMSB Industry Directors Directive (IDD - September 2009) .................. Year-End, 2009 .......... pg. 26 Summary of IRS MVTA Webinar (Nov. 18, 2009) on IDD Presented by NADA .......... Year-End, 2009 .......... pg. 28 NADA’s Request to IRS for Section 263A Relief (Dec. 1, 2009) ................................ Year-End, 2009 .......... pg. 30 Sec. 263A … The IRS Muddies the Waters … Even More … If That’s Possible (Watch Out #2) ................................................................................. Year-End, 2009 .......... pg. 2 INTERIM (2008 - MID-2009) A Modest Proposal to Resolve the IRS-Dealership Impasse on Cost Cap. ......................... Year-End, 2009 .......... pg. 4 More Accounting Method Changes Become Automatic & Some Clarifications Will Affect Section 263A Cost Capitalization Practices (Watch Out #5) ........................................ Year-End, 2009 .......... pg. 5 2009 NADA Convention … Dealer Tax Update by the IRS MVTA* Sec. 263A … Application of Inventory Cost Capitalization Rules to Dealerships ........... Mid-Year, 2009.......... pg. 12 What’s New from the IRS Point of View …Tracking Recent MVTA Presentations* .......... Mid-Year, 2008.......... pg. 5 Section 263A Inventory Cost Capitalization ................................................................. Mid-Year, 2008.......... pg. 7 NADA Letter to IRS (March 26, 2008) Requests More IIR Guidance ............................... Mid-Year, 2008.......... pg. 14 IRS Automotive Alert (Jan. 2008) re: Dealership UNICAP Issues in TAM 200736026 ............. Mid-Year, 2008.......... pg. 17 Update on IRS Guidance on Section 263A Cost Capitalization (Watch Out #2) .................. December, 2007 ......... pg. 1

DEALER TAX WATCH


PAGE 38 II. UNICAP - UNIFORM INVENTORY COST CAPITALIZATION REQUIREMENTS (SECTION 263A) (continued) IRC Section 263A: Capitalization & Inclusion of Certain Expenses in Inventory Costs TAM 200736026 (SEPTEMBER 2007) TAM 200736026: Application of Inventory Cost Capitalization Rules to Automobile Dealerships My Personal Odyssey (Watch Out #3) .......................................................................... September, 2007 ........ pg. 2 A Plea for Practical Guidance … 20 Years Ago ........................................................... September, 2007 ........ pg. 4 Overview of TAM 200736026 ............................................................................................ September, 2007 ........ pg. 8 Questions & Ramifications ............................................................................................ September, 2007 ........ pg. 11 Facts: Activities & Operations of the Dealership Subject to the TAM ........................ September, 2007 ........ pg. 12 Summary of 3 General Issue Areas Addressed by TAM ............................................... September, 2007 ........ pg. 14 Issue-by-Issue … Discussion & Analysis of the 12 TAM Issues Production & Handling Activities (6 Issues) ........................................................... September, 2007 ........ pg. 17 Retail Sales Facility (3 Issues) On-Site Sales vs. Off-Site Sales.......................................................................... September, 2007 ........ pg. 27 Dual-Function & Off-Site Storage Facilities ...................................................... September, 2007 ........ pg. 27 Identification & Allocation of Costs (3 Issues) Purchasing, Storage & Handling......................................................................... September, 2007 ........ pg. 28 Mixed Service Costs & Simplified Service Cost Method ................................... September, 2007 ........ pg. 30 Acceptable Method(s) of Accounting for Cost Cap ............................................ September, 2007 ........ pg. 31 IRS Information Document Requests (IDRs) ................................................................ September, 2007 ........ pg. 24 Selected Definitions, Allocation Rules & de minimis Exceptions ................................. September, 2007 ........ pg. 26 Analysis of Selected Sec. 263A Regulations General Allocation Formula (Without Historic Absorption Ratio Election ............. September, 2007 ........ pg. 34 Example 1 - Taxpayer Using FIFO Inventory Method ............................................ September, 2007 ........ pg. 36 Example 2 - Taxpayer Using Dollar-Value LIFO Inventory Method ...................... September, 2007 ........ pg. 37 Selected Regulation Examples - Simplified Resale Method ......................................... September, 2007 ........ pg. 34 Practice Guide … Can Your Dealership Get a Better Cost Cap Result? ............. PG ... September, 2007 ........ pg. 38 GENERAL & PRE-TAM ARTICLES (MID-2007 & BEFORE) Sec. 263A Cost Cap Update ................................................................................................ June, 2007 .................. pg. 4 NADA’s Letter to the IRS … 2007 .................................................................................... June, 2007 .................. pg. 5 IRS Automotive Alert! on Sec. 263A .................................................................................. June, 2007 .................. pg. 8 2006 AICPA Auto Dealership Conf. IRS MVTA Update Comments ................................ December, 2006 ......... pg. 15 Are CPAs Oversimplifying the “Simplified” Resale Method? … Determining Amounts to Be Capitalized & Avoiding Capitalizing Unnecessary Amounts ............ PG ... December, 2006 ......... pg. 20 Section 263A Issues, Including “Producer” vs. “Retailer” Status for Dealerships ............. September, 2006 ........ pg. 9 Should Auto Dealerships Be Treated as “Producers” or as “Retailers” under Sec. 263A? ........... March, 2006 ............... pg. 3 Some Technical Background Basics ............................................................................. March, 2006 ............... pg. 6 A Plea for Simplicity … A Long Time Ago ....................................................................... March, 2006 ............... pg. 10 A Practical Alternative Calculation for the Parts Department Handling Costs ................... March, 2006 ............... pg. 12 2004 NADA Workshop Summary Report .......................................................................... March, 2004 ............... pg. 6 Rev. Proc. 94-49: Last Chance Relief to Adopt Cost Cap Without Penalty ...................... December, 1994 ......... pg. 9 Regulations Finalized for 1994 and Historic Absorption Ratio Method ............................. December, 1994 ......... pg. 10 Simplified Resale Method ................................................................................................... December, 1994 ......... pg. 14 Dilemma for CPAs and Dealers Not Complying with Section 263A ................................. December, 1994 ......... pg. 2 Sec. 263A Sample Computation ................................................................................ PG .. December, 1994 ......... pg. 12

DEALER TAX WATCH


PAGE 39 III. USED VEHICLES & BUY-HERE, PAY-HERE (BHPH) DEALERS ACCOUNTING METHODS & ISSUES - LOWER OF COST OR MARKET (LCM) WRITEDOWN VALUATIONS 2009 NADA Convention … Dealer Tax Update by the IRS MVTA* Used Vehicle Writedowns ............................................................................................. Mid-Year, 2009.......... pg. 14 West Covina Motors, Inc. … Aggressive Dealership Deductions Disallowed* Used Vehicle (Lower-of-cost-or-Market) Writedowns ................................................. Mid-Year, 2009.......... pg. 28 Automotive Alert … Tax Court Rules on Inventory Writedowns: West Covina Motors, Inc. (January 2009) ................................................................ Mid-Year, 2009.......... pg. 36 Determining the Cost Basis for Trade-Ins (IRS Retail Industry Audit Technique Guide) ............. Mid-Year, 2009.......... pg. 38 Trade-In Valuation and LCM Adjustments (IRS Retail Industry Audit Technique Guide) .......... Mid-Year, 2009.......... pg. 39 Used Vehicle Writedown Worksheet ......................................................................... PG ... Mid-Year, 2009.......... pg. 40 Revised Procedures for Securing Automatic Consent from the IRS to Make Changes in LIFO and Other Methods of Accounting (Rev. Proc. 2008-52)* .............................. Year-End, 2008 .......... pg. 14 Section-by-Section Analysis.......................................................................................... Year-End, 2008 .......... pg. 24 Automatic CAMs Related to Changes in the Official Used Vehicle Guide Utilized in Valuing Used Vehicles .......................................................................... Year-End, 2008 .......... pg. 36 Used Car Write-Downs (IRS Industry Specialist Update)* ................................................ December, 1999 ......... pg. 4 IRS Concedes Used Car Write-Downs at Year-End to Industry Book Value ..................... September, 1999 ........ pg. 2 ACCOUNTING METHODS & ISSUES - OTHER ISSUES Best Auto Sales Fails to Apply Best Tax Practices … Sloppy Recordkeeping Defeats Used Car Dealer & Forfeits Deductions ................. March, 2003 ............... pg. 14 PPC’s Specialized Industry Tax Guide, Chapter 8, Used Car Dealers’ Tax & Accounting Problems.......................................................................................... December, 1999 ......... pg. 2 Cordes Finance Loses Big Time to the IRS…Supreme Court Denies Certiorari* ............ September, 1999 ........ pg. 3 IRS Change in Cordes Finance Corporation’s Accounting for Interest Income & $300,000 Underpayment Penalty Upheld by Tenth Circuit Court of Appeals* ........ December, 1998 ......... pg. 23 IRS Changes RFCs Accounting for Interest Income in Cordes Finance Corp.* ................ June, 1997 .................. pg. 22 BHPH Dealer Must Inventory Used Vehicles: Securities Dealer, Auto Dealer, or Both? … Possible Section 475 Application … LTR 9723004* ................................ June, 1997 .................. pg. 18

DEALER TAX WATCH


PAGE 40 III. USED VEHICLES & BUY-HERE, PAY-HERE (BHPH) DEALERS (continued) BUY-HERE, PAY-HERE (BHPH) OPERATIONS & RELATED FINANCE COMPANIES (RFCs) 2012 AICPA National Auto Dealership Conference (Las Vegas, NV) Buy-Here, Pay-Here: Is It Right for Your Dealership? (by Kenneth Shilson) ............. Year-End, 2012 .......... pg. 16 Resurgence in Buy-Here, Pay-Here (BHPH) Activity (Watch Out #10) ............................ Mid-Year, 2009.......... pg. 4 Static Pool Analysis … One of the Keys to Greater BHPH Profitability............................ June, 2007 .................. pg. 24 BHPH Dealer Note/Loan Portfolio Presentation (Sample Formats) ............................. June, 2007 .................. pg. 27 BHPH Industry Trends & Benchmarks............................................................................... June, 2007 .................. pg. 22 The IRS at the National Buy-Here, Pay-Here Conference ............................................ June, 2007 .................. pg. 23 BHPH Dealers … Form 1099-C The Debt Discharge Reporting Dilemma........................ March, 2007 ............... pg. 7 BHPH Dealers Face Special Problems in Meeting Their Cash Reporting Responsibilities ... June, 2006 .................. pg. 22 Special Rules, Definitions & Terms .............................................................................. June, 2006 .................. pg. 24 LTR 9718003 & TAM 200501016 ................................................................................ June, 2006 .................. pg. 28 BHPH Dealers Critical Cash Reporting Questions & Suggested Answers ......................... June, 2006 .................. pg. 30 BHPH Tax Issues … New Resource Available (Watch Out #5)* ...................................... June, 2006 .................. pg. 3 10 Steps to Successful BHPH Operations ........................................................................... March, 2006 ............... pg. 48 New Financial Accounting Reporting Rules ....................................................................... December, 2004 ......... pg. 14 10 Ways BHPH Dealers Can Improve Collections ............................................................. December, 2004 ......... pg. 15 New Financial Reporting Rules for Automotive Finance Companies (Watch Out #7) ...... September, 2004 ........ pg. 2 Form 1099-C … Reporting Requirements (Watch Out #8) ................................................ September, 2004 ........ pg. 4 More on the Use of the Cash Method by BHPH Dealers in Notice 2001-76 ...................... June, 2002 .................. pg. 4 IRS Ponders Allowing BHPH Dealers to Use the Cash Method in Notice 2001-76 .......... March, 2002 ............... pg. 6 More on Used Car BHPH Dealer Sales of Notes to Loan Servicing Company .................. June, 2001 .................. pg. 3 Related Finance Company Checklist ......................................................................... PG... December, 2000 ......... pg. 15 1999 AICPA Auto Dealership Conference IRS MVTA Update* ....................................... December, 1999 ......... pg. 4 How to Start and Implement Your Own Finance Company … A “How To” Resource ..... June, 1999 .................. pg. 14 IRS 13 Commandments for RFCs ...................................................................................... June, 1999 .................. pg. 15 Should a BHPH Dealer Even Bother With an RFC? Is There a $2 Million de minimis? .. June, 1997 .................. pg. 21 Transfer of Notes to RFC Lacks Economic Substance … LTR 9704002 ........................... March, 1997 ............... pg. 10 Comparing Winning & Losing RFC Structures .................................................................. March, 1997 ............... pg. 11 IRS Audit Activity: Information Document Request* ...................................................... March, 1997 ............... pg. 12 IRS Recomputation Adjustments* .................................................... March, 1997 ............... pg. 14 Issue Development Summary* ......................................................... March, 1997 ............... pg. 16 7 Good Reasons to Set Up RFCs ........................................................................................ September, 1996 ........ pg. 25 Tax Issues Created by RFCs ............................................................................................... September, 1996 ........ pg. 26 Checklist of Substance vs. Form Factors ................................................................... PG .. September, 1996 ........ pg. 27 LTR 9534023 Allows Deduction for Loss on Sale of Notes to Related Finance Entity ..... September, 1995 ........ pg. 19

DEALER TAX WATCH


PAGE 41 III. USED VEHICLES & BUY-HERE, PAY-HERE (BHPH) DEALERS (continued) BUY-HERE, PAY-HERE (BHPH) OPERATIONS & UNRELATED LOAN SERVICING COMPANIES 1999 AICPA Auto Dealership Conference IRS MVTA Update* ....................................... December, 1999 ......... pg. 4 IRS Gives Green Light in LTRs 199909002 & -003 … But No Real Direction … to BHPH Sales of Sub-Prime Notes to Unrelated Loan Servicing Companies ............. March, 1999 ............... pg. 8 Transfers of Sub-Prime Customers’ Notes by Used Car Dealership to Unrelated Loan Servicing Company Are “Sales” in LTR 9840001 ............................................... December, 1998 ......... pg. 10 “Sale” vs. “Financing” … Factor-by-Factor Analysis ............................................ December, 1998 ......... pg. 17 Determination of “Amount Realized” … Code, Regs. & Case Analysis ................. December, 1998 ......... pg. 20 DONATION PROGRAMS FOR USED VEHICLES TO CHARITIES Used Car Dealer’s Not-So-Charitable Car Donation Scheme Backfires, with Penalties … TAM 200243057 ........................................................................................................... March, 2003 ............... pg. 21 How to Do It Right: Revenue Ruling 2002-67 ............................................................. March, 2003 ............... pg. 24 IRS AUDITS & TAX ISSUES FOR USED VEHICLE DEALERS Used Car Dealer Hit with Back-Up Withholding for Not Filing Forms 1099 in LTR 199906037 ........................................................................................................ March, 1999 ............... pg. 12 IRS Used Car Dealers Audit Guide … Summary of April, 1996 Guide ............................. September, 1996 ........ pg. 18 Audit Techniques: Is It All There? … Where? ............................................................. September, 1996 ........ pg. 20 Loans TO … And … FROM Shareholders * ................................................................ September, 1996 ........ pg. 21 Used Car Write-Downs & LIFO Procedures * ............................................................. September, 1996 ........ pg. 23 Summary of April, 1995 DRAFT of Used Car Dealers IRS Audit Manual ................. September, 1995 ........ pg. 11 Income Recognition & Reporting Issues ....................................................................... September, 1995 ........ pg. 16

DEALER TAX WATCH


PAGE 42 IV. GENERAL TAX PLANNING FOR DEALERS & DEALERSHIPS DEALER GIFT & ESTATE PLANNING 2005 AICPA National Auto Dealership Conference - Presentation Summary ................... December, 2005 ......... pg. 22 Form 709 Alert if You’re Preparing Gift Tax Returns for 2003 (Watch Out #5) ............... December, 2003 ......... pg. 2 Inadequate Disclosure of LLC Interest in Gift Tax Return Fails to Start Statute of Limitations* ............................................................................. March, 2003 ............... pg. 18 De Filipps 4th Annual CPA-Auto Dealership Niche Conference - Presentation Summaries Valuing Dealerships in the Trenches* ........................................................................... September, 2001 ........ pg. 10 What’s a Franchise Worth?* ......................................................................................... September, 2001 ........ pg. 13 Indirect Gifts … Marie Bies v. Comm. ............................................................................... December, 2000 ......... pg. 3 Gift Reporting Update & Revenue Procedure 2000-34 ...................................................... December, 2000 ......... pg. 3 Final Regulations Tell How Adequate Disclosure Will Prevent IRS from Revaluing Prior Gifts * ........................................................................................... March, 2000 ............... pg. 12 Adequate Disclosure Requirements ............................................................................... March, 2000 ............... pg. 18 Qualified Appraisal and Appraiser Standards ............................................................... March, 2000 ............... pg. 19 Suggestions for Working with the New Adequate Disclosure Standards ............. PG ... March, 2000 ............... pg. 20 Examples of (In)Adequate Disclosures ......................................................................... March, 2000 ............... pg. 22 Effective Date Rules ...................................................................................................... March, 2000 ............... pg. 24 Preliminary vs. Final Regulations ................................................................................. March, 2000 ............... pg. 25 1998 NADA Workshop Summary Report .......................................................................... March, 1998 ............... pg. 18 Gifting Dealership Stock & Other Assets: Amending Prior Gift Tax Returns to Claim Larger Discounts and Tax Benefits … LTR 9718004 .................................... June, 1997 .................. pg. 11 Gifting Dealership Stock … IRS Change in Reporting Valuation Discounts on Forms 709 ..........March, 1997 ............... pg. 3 Project 2000: What CPAs Say About Dealership Valuations* .......................................... June, 1996 .................. pg. 21 1995 NADA Workshop Summary Report .......................................................................... March, 1995 ............... pg. 4 DEALERSHIP CONTINUITY, RESTRUCTURING, EXPANSION & OTHER PLANNING Will the Dealership Survive as a Family Enterprise? (2004 AICPA Conf. Report) .......... December, 2004 ......... pg. 6 Larry Miller’s Practical Approach to Dealership Acquisitions (2004 AICPA Conf. Report)........December, 2004 ......... pg. 6 IRS Treats Dealer’s Acquisition of a New Franchise As an “Expansion” of his Existing Business in Revenue Ruling 2003-18 .................... March, 2003 ............... pg. 10 De Filipps 4th Annual CPA-Auto Dealership Niche Conference - Presentation Summaries Valuing Dealerships in the Trenches* ........................................................................... September, 2001 ........ pg. 10 What’s a Franchise Worth?* ......................................................................................... September, 2001 ........ pg. 13 Disguised Payments for Dealer’s Benefit after Dealership Restructuring Were Really Taxable Income to the Dealer from a Sale … Henry Misle v. Comm. ........................... December, 2000 ......... pg. 3 Tax-Free Spin-Offs and Split-Offs for Dealerships Over 5 Years Old * ............................ September, 1998 ........ pg. 4 Corporate Business Purposes for Spin-Offs, Split-Offs & Split-Ups *............................... September, 1998 ........ pg. 12 LTR 9829050: A Tax-Free Split-Off to Settle Shareholder Disputes*......................... September, 1998 ........ pg. 14 LTR 8712043: A Tax-Free Split-Off to Satisfy the Factory…A Project 2000 Precursor* ......September, 1998 ........ pg. 20 LTR 9522036: A Tax-Free Split-Off to Separate Parents from Their Children* ........ September, 1998 ........ pg. 23 Rev. Rul. 75-337: A Tax-Free Split-Off to Protect a 70-Year Old Dealer’s Franchise * ......September, 1998 ........ pg. 24 One Man’s Game Plan: A Study in Dealer Entity Structuring * .............................. PG .. September, 1996 ........ pg. 11

DEALER TAX WATCH


PAGE 43 IV. GENERAL TAX PLANNING FOR DEALERS & DEALERSHIPS (continued) ENTITY CHOICES … C, S, LLC Watch Basis in S Corps for Purposes of Deducting Losses in 2008 (Watch Out #9) ......... Year-End, 2008 .......... pg. 6 Form 709 Alert if You’re Preparing Gift Tax Returns for 2003 (Watch Out #5) ............... December, 2003 ......... pg. 2 Inadequate Disclosure of LLC Interest in Gift Tax Return Fails to Start Statute of Limitations * ............................................................................ March, 2003 ............... pg. 18 C, S, LLP or LLC … Which Should a Dealership Be? ....................................................... December, 1996 ......... pg. 20 S Corp. Dealership Converting to LLC/“Partnership” Avoids LIFO Recapture Tax* ......December, 1996 ......... pg. 26 S Corp. Rule Changes in 1997 of Special Interest to Dealer Advisors .......................... December, 1996 ......... pg. 29 Comparison of LLCs with Other Entities ...................................................................... December, 1996 ......... pg. 30 One Man’s Game Plan: A Study in Dealer Entity Structuring* ................................ PG .. September, 1996 ........ pg. 11 INDIVIDUAL INCOME TAX RETURNS & PLANNING New 2011 Income Tax Return Disclosures for Certain Dealers to Report Foreign Financial Assets on Form 8938 (by G. Petrowski) ........................... Year-End, 2011 .......... pg. 18 Some Items to Watch Out for In Preparing 1040s for Your Dealers & Other Clients ........ December, 2005 ......... pg. 5 Proposed Revenue Procedure Will Mean Trouble … Before Disclosing Any Tax Return Information, Read Notice 2005-93 First ........................................................................ December, 2005 ......... pg. 6 Year-End Tax Planning Opportunities Letter for Dealer Clients …* Reduced Tax Rates for Qualified Dividend Income ............................................. PG ... September, 2004 ........ pg. 8 2004 NADA Workshop Summary Report … JGTRRA Changes ....................................... March, 2004 ............... pg. 4 Enhancing Client Relationships by Explaining Their Tax Savings from Reduced Tax Rates for Qualified Dividend Income … 5%-15% Preferential Rates under JGTRRA - A Practice Development Opportunity … 4 Case Studies ................... March, 2004 ............... pg. 19 W.J. De Filipps’ Seminar Outline … JGTRRA Rate Reductions & Other Changes ........... September, 2003 ........ pg. 18

DEALER TAX WATCH


PAGE 44 IV. GENERAL TAX PLANNING FOR DEALERS & DEALERSHIPS (continued) OTHER SPECIALIZED PLANNING TECHNIQUES Dealer Personal Insurance Cost Reduction (Watch Out #9) ............................................... December, 2006 ......... pg. 10 How to Reduce Dealers’ Premiums on Existing Life Insurance Policies .............................. March, 2005 ............... pg. 26 Advisory Service (“Dealer Participation Program”) Helps Dealers Collect Commissions on Life Insurance Policies They Sell to Themselves and to Other Family Members .... June, 1999 .................. pg. 2 LTR 9616023: A Tax-Free Spin-Off to Lower Inventory Financing Costs* ..................... September, 1998 ........ pg. 17 Capital Gains Taxation: A Look at Some Special Schedule D Situations ......................... March, 1998 ............... pg. 10 See Also: Buy-Sell Agreements and Allocations, Changes in Accounting Methods, Compensation (Reasonable), Loans & Constructive Dividend Issues, and VSC/PORCs REAL ESTATE INVESTMENT TRUSTS How Dealerships Can Use REITs in Their Planning ......................................................... September, 2004 ........ pg. 12 YEAR-END TAX PLANNING OPPORTUNITIES FOR DEALER CLIENTS Practice Guide … Discussion Agenda for Dealership Year-End Review Meetings . PG ... Year-End, 2010 .......... pg. 20 Major Income Tax Planning Opportunity Is Still Available for Dealers ............................ Year-End, 2008 .......... pg. 9 Strategies to Minimize Dealership Tax Burden … (2005 AICPA Conf. Presentation Summary) ... December, 2005 ......... pg. 19 Year-End 2005 Dealer Tax Update… (De Filipps’ Dec. 2005 Teleconference Outline)* .....December, 2005 ......... pg. 24 Dealership Tax Return Compliance & Planning Opportunities Checklist ................. PG ... December, 2004 ......... pg. 23 (Note: For Full Index of Topics Covered in This Checklist, see Section V: Timelines & Practice Guides) Year-End Tax Planning Opportunities Letter for Dealer Clients …* Reduced Tax Rates for Qualified Dividend Income ............................................. PG ... September, 2004 ........ pg. 8 Accountable Plans for Reimbursing Service Technicians for Using Their Tools ... PG ... September, 2004 ........ pg. 9 Accelerated Deductions by Changing to More Favorable Tax Accounting Methods .... PG ... September, 2004 ........ pg. 10 W.J. De Filipps’ Seminar Outline … Tax Strategies & IRS Activities Update … A Practice Guide Outline for Your Staff & Auto Dealer Client Seminars ..... PG .. September, 2003 ........ pg. 16

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PAGE 45 V. TIMELINES & PRACTICE GUIDES TIMELINES General Calendar Year 2012 … The Year in Review ................................................................. Year-End, 2012 .......... pg. 4 Calendar Year 2011 … The Year in Review ................................................................. Year-End, 2011 .......... pg. 5 Calendar Years 2010, 2009 & 2008 … The Years in Review ....................................... Year-End, 2011 .......... pg. 6 2011 … Developments Jan. 1 to Mid-Year 2011 .......................................................... Mid-Year, 2011.......... pg. 2 2010 … The Year in Review ......................................................................................... Year-End, 2010 .......... pg. 7 2010 … Developments Jan. 1 to Mid-Year 2010 ......................................................... Mid-Year, 2010.......... pg. 2 2009 … The Year in Review (Watch Out #1) ............................................................... Year-End, 2009 .......... pg. 1 2009 … The Year in Review ......................................................................................... Year-End, 2009 .......... pg. 8 January 1, 2009 to Mid-Year ........................................................................................ Mid-Year, 2009.......... pg. 6 2008 … The Year in Review ......................................................................................... Year-End, 2008 .......... pg. 3 January 1, 2008 to Mid-Year ......................................................................................... Mid-Year, 2008.......... pg. 3 Section 263(a) - Tangibles Regulations (2012) Timeline for the New Tangible Property Regulations … 2004-2014 ............................ Year-End, 2012 .......... pg. 46 Section 263A - UNICAP - Uniform Inventory Cost Capitalization Requirements 25-Year UNICAP Timeline for Dealerships … 1986 - 2011 ............................... PG ... Mid-Year, 2011.......... pg. 21 Recent Developments under Section 263A … 2007-2009 ............................................ Year-End, 2009 .......... pg. 14 Other - Specific Electronic Recordkeeping Requirements & Developments… 1997 - 2007 .................. March, 2007 ............... pg. 10 Selected Sec. 62(c) Tool Plan Cases, Rulings & Developments … 1997-2005 ............ June, 2005 .................. pg. 32 PRACTICE GUIDES BY SPECIFIC TOPIC OR ISSUE Accounting Software & IRS Electronic Recordkeeping Requirements Rev. Proc. 98-25 Compliance Considerations & Practice Suggestions ................ PG ... March, 2007 ............... pg. 24 Adequate Disclosure Standards for Reporting Gifts ............................................ PG ... March, 2000 ............... pg. 20 Aircraft Planning & Documentation Checklist ...................................................... PG ... June, 1996 .................. pg. 7 Capitalizable Expenditures vs. Deductible Expenses - Buildings & Equipment … Improvements vs. Repairs … Section 263(a) Executive Summary - The New “Tangibles” Regulations - Impact on Auto Dealerships .... Year-End, 2012 .......... pg. 44 Selected CAMs More Generally Acceptable to Dealerships* ....................................... Year-End, 2012 .......... pg. 56 Executive Summary - The New Tangibles Regulations ................................................ Mid-Year, 2012.......... pg. 37 Detailed Matrix of Depreciable Lives (Recovery Periods) for Dealership Fixed Assets LMSB Detailed Depreciation Matrix - Alphabetically by Asset Class ........... PG ... Mid-Year, 2008.......... pg. 28 Alternative Presentation - By Class Life (5-7-15-39-Non-Depreciable) ......... PG ... Mid-Year, 2008.......... pg. 38 Cash Reporting Checklist & Summaries of Related Code Sections ........................ PG .. June, 2006 .................. pg. 17

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PAGE 46 V. TIMELINES & PRACTICE GUIDES (continued) PRACTICE GUIDES BY SPECIFIC TOPIC OR ISSUE (continued) Changes in Accounting Methods (CAMs) Selected CAMs More Generally Applicable to Dealerships* ....................................... Year-End, 2012 .......... pg. 56 Automatic CAMs Frequently Encountered in Auto Dealerships.......................... PG ... Mid-Year, 2011.......... pg. 11 Ten Suggestions for Form 3115 Filings ............................................................... PG ... Mid-Year, 2010.......... pg. 38 What If the Tax Return for the Year of Change Is Due Before the IRS Grants Approval to Make the Change? .................................. PG ... Mid-Year, 2010.......... pg. 40 Flowchart for Methods, Changes & Approval Disputes ....................................... PG .. June, 1998 .................. pg. 11 Basic CAM Rules & Terms .................................................................................. PG .. June, 1998 .................. pg. 12 In CAM Disputes, the Commissioner Is Always Right … Usually...................... PG .. June, 1998 .................. pg. 14 Rev. Proc. 97-27 … IRS Advance Consent Required CAMs … At A Glance .... PG .. March, 1998 ............... pg. 7 Rev. Proc. 97-37 At A Glance............................................................................... PG .. March, 1998 ............... pg. 8 Constructive Dividends Constructive Dividends Come in All Sizes, Shapes & from All Angles .............. PG ... June, 2001 .................. pg. 22 Constructive Dividends - Shareholder Loan Issues Checklist .............................. PG ... June, 2001 .................. pg. 20 Constructive Dividends Come in All Sizes, Shapes & from All Angles .............. PG ... December, 1995 ......... pg. 12 Constructive Dividends - Shareholder Loan Issues Checklist .............................. PG ... December, 1995 ......... pg. 10 Dealer Compensation Compensation Planning Lessons Inspired by Metro Leasing & Develop. Corp. .... PG ... June, 2002 .................. pg. 13 Corporate Minutes Checklist for Defending ......................................................... PG ... June, 1994 .................. pg. 11 Suggestions for Determining, Documenting & Defending................................... PG ... September, 1994 ........ pg. 20 Dealership Employee Compensation Plans Sample Compensation Programs for Salespersons ............................................... PG ... September, 2001 ........ pg. 26 Sample Compensation Programs for Closer-Assistant Sales Manager ................ PG ... September, 2001 ........ pg. 29 Dealer Franchise Protection Provisions - A Checklist of Suggestions ................. PG ... Year-End, 2008 .......... pg. 5 Dealership Red Flags … A “Watch It” List ........................................................... PG ... June, 2000 .................. pg. 11 Demonstrator Vehicles Rev. Proc. 2001-56 New IRS Guidelines for Valuing Demo Use…At A Glance ....PG .. December, 2001 ......... pg. 5 Sample Letter on IRS Safe Harbor Demonstrator Usage Rules ........................... PG ... December, 2001 ......... pg. 3 Calculation of Whether Demo Use Is Considered Limited .................................. PG ... December, 2001 ......... pg. 11 IRS-Approved Demo Plan Language ... Full Exclusion Method.......................... PG ... December, 2001 ......... pg. 20 IRS-Approved Demo Plan Language ... Partial Exclusion Method ..................... PG ... December, 2001 ......... pg. 22 Sample Demonstrator Agreement (Note: Superceded by Rev. Proc. 2001-56) .... PG .. December, 2000 ......... pg. 4 Sample Demonstrator Agreement (Note: Superceded by Rev. Proc. 2001-56) .... PG ... September, 1995 ........ pg. 17 Domestic Production Activities Deduction (Sec. 199) … At A Glance .................. PG ... December, 2005 ......... pg. 15 Factory/Manufacturer Programs - Facilities Programs & Payments Checklist for Evaluating Ramifications of Dealership - Manufacturer Facility Programs ............................................................................................ PG ... Mid-Year, 2012.......... pg. 23 Hobby Losses - Considerations in Evaluating Exposure to Disallowance of Losses for Activities Not Engaged in for Profit ............................................................... PG .. September, 2002 ........ pg. 16 IRS Lifestyle & “Economic Reality” Audit Questions Raising a Controversy ..... PG ... June, 1995 .................. pg. 12 LIFO Financial Statement Conformity Requirements Updated Conformity Flowcharts - Calendar Year & Fiscal Year Dealerships ........ PG ... Year-End, 2011 .......... pg. 14 Calendar Year Dealerships (Flowchart) ............................................................... PG ... September, 1995 ........ pg. 22 Fiscal Year Dealerships (Flowchart) .................................................................... PG ... September, 1995 ........ pg. 23

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PAGE 47 V. TIMELINES & PRACTICE GUIDES (continued) PRACTICE GUIDES BY SPECIFIC TOPIC OR ISSUE (continued) One Man’s Game Plan: A Study in Dealer Entity Structuring........................... PG ... September, 1996 ........ pg. 11 Personal Holding Company Status / Classification Worksheet .............................. PG ... June, 2002 .................. pg. 30 PORCs … One-Size-Fits-All Disclosure Statement … Reg. Sec. 6011-4T/Form 8886 ......PG .. December, 2002 ......... pg. 24 Sample Filled-In Form 8886 for 2003 Returns ..................................................... PG ... December, 2003 ......... pg. 20 Checklist for Evaluating PORC Exposure to IRS Attack ..................................... PG .. December, 2002 ......... pg. 26 Related Finance Companies (RFCs) Checklist....................................................... PG... December, 2000 ......... pg. 15 RFC Checklist of Substance vs. Form Factors ..................................................... PG ... September, 1996 ........ pg. 27 Schedule M-3 … Action Plan for Complying with New Reporting Requirements . PG ... June, 2004 .................. pg. 24 Safeguarding Customer Information - Dealership Requirements for Compliance PG ... September, 2003 ........ pg. 4 Technicians’ Tool Accountable Plans & Sec. 62(c) - Considerations in Evaluating Exposure .... PG... June, 2005 .................. pg. 45 Service Technician Tool Plans - Considerations in Evaluating Exposure ............ PG... September, 2000 ........ pg. 12 UNICAP - Sec. 263A Inventory Cost Capitalization Rules for Automobile Dealers 25-Year UNICAP Timeline for Dealerships … 1986 - 2011 ............................... PG ... Mid-Year, 2011.......... pg. 21 Evaluating Form 3115 Filed by Dealerships (Checklist #1) ................................. PG ... Year-End, 2011 .......... pg. 27 Evaluating Dealership Compliance Beyond the Safe Harbors (Checklist #2) ...... PG ... Year-End, 2011 .......... pg. 28 Checklist for Evaluating Dealership Compliance with Sec. 263A ....................... PG ... Mid-Year, 2011.......... pg. 41 IRS Moratorium on Raising Sec. 263A Issues Urges Dealerships to File Forms 3115 The Case Against Dealerships “Jumping the Gun” to Change 263A Methods at this Time … Some (Random) Thoughts .................................................... PG ... Year-End, 2009 .......... pg. 22 Determining Amounts to Be Capitalized & Avoiding Capitalizing Unnecessary Amounts ..... PG ... December, 2006 ......... pg. 20 Sample Computation ............................................................................................ PG ... December, 1994 ......... pg. 12 TAM 200736026 … Can Your Dealership Get a Better Cost Cap Result? .......... PG ... September, 2007 ........ pg. 38 Used Vehicle Inventories … Year-End Writedown Documentation Worksheet ..... PG ... Mid-Year, 2009.......... pg. 40 Vehicle Service Contracts Checklist for Issues & Problem Areas ....................... PG ... September, 1999 ........ pg. 14 Worker Classification … Employee vs. Independent Contractor Status ................. PG ... March, 1995 ............... pg. 22 YEAR-END REVIEW MATERIALS Discussion Agenda for Year-End Meeting with Dealer Discussion Agenda for Dealership Year-End Review Meetings .......................... PG ... Year-End, 2010 .......... pg. 20 Year-End Dealership Tax Return Compliance & Planning Opportunities Checklist Dealership Summary ............................................................................................ PG ... December, 2004 ......... pg. 23 Cash Transactions Reporting ................................................................................ PG ... December, 2004 ......... pg. 23 Inventories, Proper Recording at Cost .................................................................. PG ... December, 2004 ......... pg. 23 New Vehicles, LIFO Matters, Inventories & Operations, VSCs, PORCs ............ PG ... December, 2004 ......... pg. 24 Used Vehicles Inventories & Operations ............................................................. PG ... December, 2004 ......... pg. 25 Parts & Accessories, Inventories & Operations.................................................... PG ... December, 2004 ......... pg. 25 Section 263A Cost Capitalization (UNICAP) ...................................................... PG ... December, 2004 ......... pg. 26 Fixed Assets … Buildings, Equipment, Depreciation & Cost Segregation Studies PG ... December, 2004 ......... pg. 26 Pre-Paid Expenses, Intangibles, Goodwill, etc. .................................................... PG ... December, 2004 ......... pg. 27 Other Expenses, Including Employee Benefits .................................................... PG ... December, 2004 ......... pg. 27

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PAGE 48 V. TIMELINES & PRACTICE GUIDES (continued) YEAR-END REVIEW MATERIALS (continued) Year-End Dealership Tax Return Compliance & Planning Opportunities Checklist (continued) Possible Unrelated Business Activities ................................................................ PG ... December, 2004 ......... pg. 28 Demonstrator Vehicles Provided to Employees ................................................... PG ... December, 2004 ......... pg. 28 Deductions for Payments to Shareholders, Constructive Dividends - Shareholder Loans PG ... December, 2004 ......... pg. 28 Shareholder Equity, Retained Earnings, Capital Stock Transfers ........................ PG ... December, 2004 ......... pg. 29 Alternative Minimum Tax …Form 4626 ............................................................. PG ... December, 2004 ......... pg. 29 Net Operating Losses ........................................................................................... PG ... December, 2004 ......... pg. 30 Corporate Minutes, Recordkeeping, Record Retention, etc. ................................ PG ... December, 2004 ......... pg. 30 “Retroactive” Tax Planning for Last Year ............................................................ PG ... December, 2004 ......... pg. 30 Other Planning Considerations Not Covered Elsewhere ...................................... PG ... December, 2004 ......... pg. 31 Action Plan ........................................................................................................... PG ... December, 2004 ......... pg. 31 PRACTICE DEVELOPMENT SUGGESTIONS FOR CPAS WITH AUTO DEALERSHIP PRACTICES Take Your Practice to Another Level by Becoming (More) Familiar with State Dealer Franchise Law (Watch Out #6) ........................................................ PG ... December, 2006 ......... pg. 8 Opportunities for CPAs Involved with Dealer - Factory Conflicts ............................ PG ... December, 2006 ......... pg. 40 Sample Letter for Dealer Clients Discussing Year-End Tax Planning Opportunities Reduced Tax Rates for Qualified Dividend Income ............................................. PG ... September, 2004 ........ pg. 8 Accountable Plans for Reimbursing Service Technicians for Using Their Tools ....... PG ... September, 2004 ........ pg. 9 Accelerated Deduction Benefits by Changing to Favorable Tax Accounting Methods .... PG ... September, 2004 ........ pg. 10 A Seminar Outline for Your Staff & Auto Dealer Clients … Tax Strategies & IRS Activities Update for Auto Dealers .................................... PG ... September, 2003 ........ pg. 16 How Much Are You Investing in Your Niche? ......................................................... PG ... June, 1996 .................. pg. 3 Project 2000 Dealer Downsizing Survival Suggestions & Practice Opportunities .... PG ... June, 1996 .................. pg. 13

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PAGE 49 VI. AUTO DEALER INDUSTRY & DEALER-MANUFACTURER (FACTORY) ISSUES AUTO DEALER INDUSTRY - GENERAL 2012 AICPA National Auto Dealership Conference (Las Vegas, NV) The Shape of Things to Come (by James Ziegler) ........................................................ Year-End, 2012 .......... pg. 11 Dealers Overwhelmed by Federal Regulations (by Paul Metrey) ................................. Year-End, 2012 .......... pg. 14 Factory Facilities Programs … NADA Research Project … The Mercer Report (Summary) .. Year-End, 2012 .......... pg. 35 Mercer Report on Factory Upgrade Programs (February 2012)* ....................................... Mid-Year, 2012.......... pg. 12 Manufacturer Bankruptcies - SIGTARP Report on GM & Chrysler Dealership Closings* ..... Year-End, 2010 .......... pg. 5 Advisory to Chrysler & GM Dealers* ................................................................................ Year-End, 2009 .......... pg. 12 “The Franchise System” - Automotive News Summary ...................................................... December, 2006 ......... pg. 9 “State of the Retail Industry” (2006 AICPA Conf. Presentation Summary) (Watch Out #5) ........December, 2006 ......... pg. 4 General Motors … Will It Survive or Not? ........................................................................ March, 2006 ............... pg. 26 What Lies Ahead? Dealer Concerns at NADA 2007 Convention................................................................ March, 2007 ............... pg. 40 Dealer Concerns at NADA 2006 Convention................................................................ March, 2006 ............... pg. 24 Dealer Concerns at NADA 2005 Convention................................................................ March, 2005 ............... pg. 28 Dealer Concerns at NADA 2004 Convention................................................................ March, 2004 ............... pg. 10 Dealer Concerns at NADA 2003 Convention................................................................ March, 2003 ............... pg. 26 Dealer Concerns at NADA 2002 Convention................................................................ March, 2002 ............... pg. 22 Dealer Concerns at NADA 2001 Convention................................................................ March, 2001 ............... pg. 21 Dealer Concerns at NADA 2000 Convention................................................................ March, 2000 ............... pg. 9 Dealer Challenges: Automotive Industry Trends & Future Prospects ............................... September, 2004 ........ pg. 5 De Filipps 4th Annual CPA-Auto Dealership Niche Conference - Presentation Summary ........ September, 2001 ........ pg. 21 Dealers Going Public … or Considering Alternatives Tax Concerns & Conf. Highlights .....December, 1997 ......... pg. 3 Dealerships on the Brink: Ten Danger Signs ..................................................................... December, 1996 ......... pg. 13 CPAs With Dealership Practices: How Much Are You Investing in Your Niche?... PG .. June, 1996 .................. pg. 3 Benchmarking for Profits .................................................................................................... March, 1995 ............... pg. 10 Expense Control: How to Cut Costs in Every Department ................................................ March, 1995 ............... pg. 8 Overview of the Automotive Industry ................................................................................ December, 1994 ......... pg. S-1 How the Auto Dealer and the CPA Can Work Together Effectively.................................. December, 1994 ......... pg. 5

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PAGE 50 VI. AUTO DEALER INDUSTRY & DEALER-MANUFACTURER (FACTORY) ISSUES (continued) DEALERS IN TRANSITION: DEALER-MANUFACTURER (FACTORY) ISSUES 2012 AICPA National Auto Dealership Conference (Las Vegas, NV) The Legal Horizon for the Franchised Auto Dealer (by Richard N. Sox, Esq.) ............ Year-End, 2012 .......... pg. 12 Update on Class Action “Takings” Suits (Watch Out #7) .................................................. Mid-Year, 2012.......... pg. 3 Manufacturer Bankruptcies & Dealership Closings … What Really Happened? (Watch Out #9) ................................................................. Year-End, 2011 .......... pg. 4 2011 AICPA National Auto Dealership Conference (Orlando, FL) Auto Dealer Franchise Legal Update (Richard N. Sox, Esq.) ....................................... Year-End, 2011 .......... pg. 20 Dealerships Under Duress … Pressure from Manufacturers .............................................. Mid-Year, 2011.......... pg. 4 2010 AICPA National Auto Dealership Conference (Phoenix, AZ) Dealer-Factory Issues Update (Richard Sox, Esq.) ....................................................... Year-End, 2010 .......... pg. 15 Lessons (for Everyone) Learned from GM & Chrysler Arbitrations ............................. Year-End, 2010 .......... pg. 16 Manufacturer Bankruptcies - SIGTARP Report on GM & Chrysler Dealership Closings* ..... Year-End, 2010 .......... pg. 5 2009 Dealer Tax Update Seminar Outline …“When Goodwill Goes Bad … Writing Off the Loss” .......Year-End, 2009 .......... pg. 40 Writing-Off Goodwill for Lost or Terminated Franchises (Watch Out #4)* ...................... Year-End, 2009 .......... pg. 5 Advisory to Chrysler & GM Dealers* ................................................................................ Year-End, 2009 .......... pg. 12 Checklist of Suggested Dealer Franchise Protection Provisions ................................ PG ... Year-End, 2008 .......... pg. 5 2008 AICPA National Auto Dealership Conference (Las Vegas, NV) Latest Manufacturer Initiatives Threatening Dealership Viability ................................ Year-End, 2008 .......... pg. 13 2007 AICPA National Auto Dealership Conference Presentation Summary Dealer-Franchise Issues Update …Manufacturer-by-Manufacturer .............................. December, 2007 ......... pg. 12 Emerging Manufacturer Initiatives Impacting Auto Dealers (NADA 2007) ...................... March, 2007 ............... pg. 4 Treatment of Payments Received by Dealerships for the Cancellation of Distributor Agreements (Rev. Rul 2007-37) ................................................................. June, 2007 .................. pg. 13 Emerging Manufacturer Initiatives Impacting Auto Dealers … (2006 AICPA Conf. Presentation Summary) ........................................................... December, 2006 ......... pg. 24 What Bankruptcy (by General Motors or Ford) Could Mean to Dealers ...................... December, 2006 ......... pg. 24 Incentive Programs & Advertising Groups ................................................................... December, 2006 ......... pg. 25 Image / Exclusive Facilities Programs .......................................................................... December, 2006 ......... pg. 27 Manufacturer/Factory Audits … Sales Incentive Programs & Warranty Claims Audits ..... December, 2006 ......... pg. 29 Guide to Manufacturer’s Incentive Warranty Audits … Some Do’s & Don’ts ....... December, 2006 ......... pg. 30 Terminations of Franchises … Actual & Constructive, and Variations on the Theme .....December, 2006 ......... pg. 32 Add Points & Relocations … Know Your Rights & Get Involved ............................... December, 2006 ......... pg. 35 Vehicles Manufactured by Chinese Manufacturers ....................................................... December, 2006 ......... pg. 35 Selected Examples of Dealer Rights & Franchise Protections under Florida & Illinois Law ......December, 2006 ......... pg. 36 Actions by a Dealer that Can Result in Termination of the Dealer’s Selling Agreement .... December, 2006 ......... pg. 39 Practice Development Suggestions for CPAs Involved with Dealer - Factory Conflicts ...... PG ... December, 2006 ......... pg. 40 Become (More) Familiar with State Dealer Franchise Law (Watch Out #6) ............. PG ... December, 2006 ......... pg. 8 “State of the Industry” Seminar Hits the Mark … NADA 2006 Presentation Summary .... March, 2006 ............... pg. 19 Oldsmobile Dealers’ Tax Relief Provisions Not Enacted (AJCA 2004)* ........................... December, 2004 ......... pg. 3

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PAGE 51 VI. AUTO DEALER INDUSTRY & DEALER-MANUFACTURER (FACTORY) ISSUES (continued) DEALERS IN TRANSITION: DEALER-MANUFACTURER (FACTORY) ISSUES (continued) Oldsmobile Dealers & Others in Transition … An Update* Corporate vs. Individual Goodwill ................................................................................ December, 2003 ......... pg. 5 Martin Ice Cream Company … What the Tax Court Said ............................................ December, 2003 ......... pg. 6 Some Possible Tax Relief? … HR 870 (02/25/2003) & S 1305 (06/20/2003) .............. December, 2003 ......... pg. 7 Should You File Amended Returns Based on Pending Legislation? (Watch Out #1 also) ......December, 2003 ......... pg. 8 W.J. De Filipps’ Seminar Outline re: Tax Issues for Dealers in Transition ................. September, 2003 ........ pg. 20 IRS Rules Favorably for Some Oldsmobile Dealers in LTR 200218034 … But Be Careful if You’re Going to Rely on this Ruling* ......................................... March, 2002 ............... pg. 12 W. R. Matthews v. Comm. … Payments to Dealer for His Assistance in Getting GM to Terminate Pontiac Franchise* ..................................................... March, 2002 ............... pg. 14 De Filipps 4th Annual CPA-Auto Dealership Niche Conference - Presentation Summary Legal Issues Facing Dealerships .................................................................................... September, 2001 ........ pg. 8 Dealer Fully Taxed on Proceeds from Franchise-Related Settlement Wade H. Griffin III v. Comm.* ...................................................................................... March, 2001 ............... pg. 18 Possible Implications for Dealers in Transition* ........................................................... March, 2001 ............... pg. 20 GM Pulls the Plug on Oldsmobile … & LIFO Tax Reserves Go Down the Drain* ........... December, 2000 ......... pg. 1 GM Dealers Low on LIFO Inventory May Face Stiff Recapture Consequences … Planning May Lessen the Blow * ............................................................................. June, 1998 .................. pg. 18 PROJECT 2000 ACTIVITIES Project 2000 Update ............................................................................................................ December, 1996 ......... pg. 11 Project 2000 and Dealer Downsizing ......................................................................... PG .. June, 1996 .................. pg. 12 Survival Suggestions & Practice Opportunities ......................................................... PG .. June, 1996 .................. pg. 13 What the Factories Say ....................................................................................................... June, 1996 .................. pg. 14 What Three Consultants Say ............................................................................................... June, 1996 .................. pg. 16 What CPAs Say About Dealership Valuations* ................................................................. June, 1996 .................. pg. 21 What the Lawyers Say ........................................................................................................ June, 1996 .................. pg. 22 DEALER NON-TAX COMPLIANCE ISSUES STANDARDS FOR SAFEGUARDING CUSTOMER INFORMATION & FTC RULES Safeguarding Customer Information … & Saving Your Dealer from the FTC .................. September, 2003 ........ pg. 3 At A Glance … Standards & Compliance Requirements...................................... PG ... September, 2003 ........ pg. 4

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PAGE 52 VII. IRS ACTION, AUDIT ACTIVITY & AUDIT TECHNIQUE GUIDES (Note: See Also Section VIII: Conference - Convention - Seminar (Presentation) Summaries) IRS ACTION & AUDIT ACTIVITY The IRS Reorganizes Itself Yet Again (Watch Out #10) .................................................... Year-End, 2012 .......... pg. 8 What’s on the IRS’ Radar Screen These Days? (Watch Out #4) ........................................ Mid-Year, 2009.......... pg. 3 IRS Employees Continue to Compromise Taxpayers’ Confidential Information, According to Three Treasury Inspector General for Tax Administration (TIGTA) Reports (Watch Out #1) ............................................................................ December, 2007 ......... pg. 1 Senator Baucus Response to TIGTA Reports................................................................ December, 2007 ......... pg. 2 The IRS Is Not Adequately Protecting Taxpayer Data on Laptop Computers And other Portable Electronic Media Devices (TIGTA - Report March 23, 2007) ....December, 2007 ......... pg. 2 (IRS) Employees Continue to Be Susceptible to Social Engineering Attempts that Could Be Used by Hackers (TIGTA Report - July 20, 2007) .................................. December, 2007 ......... pg. 3 Efforts Have Been Made, But (IRS) Manager and Employee Noncompliance with Security Policies and Procedures Puts Personally Identifiable Information at Risk (TIGTA Report - August 13, 2007) ............................................................. December, 2007 ......... pg. 3 Used Vehicles … Year-End Writedown Documentation Worksheet ........................ PG ... December, 2006 ......... pg. 11 IRS Audit Activities … Selected Target Areas (Watch Outs #2 & 3) ................................ December, 2006 ......... pg. 1 What’s Wrong with the TAM Process & How a New Form of IRS Technical Advice … The Generic Legal Advice Memorandum (GLAM) … May Be More Effective .......... September, 2006 ........ pg. 15 Update on Current Auto Dealership IRS Audits … In General .......................................... September, 2006 ........ pg. 3 IRS Audit Discussion Agendas, Agreements & Initiatives Used by the IRS LMSB Division ......September, 2006 ........ pg. 4 Flow-Through Entities Are Very High & Visible on the IRS’ Radar Screen ..................... September, 2005 ........ pg. 5 New Schedule M-3 … Draft as of October 25, 2004 … Closer to the Final Version ......... December, 2004 ......... pg. 16 If the Taxman Ever Knocks at Your Door … Tax Audit for Life … Could Save Your Life* ........September, 2004 ........ pg. 3 New Schedule M-3 for 2004 … More Tax Return Detail Work & Disclosure* ................. June, 2004 .................. pg. 2 Lifting the Veil of Obscurity … Transparency and the IRS’ Great Expectations ......... June, 2004 .................. pg. 3 At A Glance, Practitioner Comments & Comparison of 1st and 2nd Drafts of Sch. M-3 ....June, 2004 .................. pg. 6 Draft of Final Version … July 7, 2004 .......................................................................... June, 2004 .................. pg. 14 IRS Guidance for Completing Schedule M-3 Timing Differences, Income-Loss Items & Expense & Deduction Items ............... June, 2004 .................. pg. 17 Frequently Asked Questions (FAQs) ........................................................................ June, 2004 .................. pg. 20 Action Plan for Complying with New Schedule M-3 Reporting Requirements ... PG ... June, 2004 .................. pg. 24 IRS Unveils New Schedule M-3 (Watch Out #5) ............................................................... March, 2004 ............... pg. 2 Limited Issue Focused Examination (LIFE) Process (Watch Out #8) ................................ March, 2004 ............... pg. 3 Update on IRS Modernization & Compliance Initiatives ................................................... June, 2001 .................. pg. 4 Auto Dealership IRS Tax Issues ......................................................................................... March, 2001 ............... pg. 15 IRS Audit & Compliance Activity … Is It Really Declining? ............................................ March, 2001 ............... pg. 4 IRS Agents’ Ten Deadly Sins … IRS Agents’ Actions that Can Result in Loss of Their Jobs ........ March, 2001 ............... pg. 10 Methods of Proof Where the IRS Suspects Underreporting .......................................... March, 2001 ............... pg. 12 IRS Programs Using Newer Technology ...................................................................... March, 2001 ............... pg. 14

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PAGE 53 VII. IRS ACTION, AUDIT ACTIVITY & AUDIT TECHNIQUE GUIDES (continued) IRS ACTION & AUDIT ACTIVITY (continued) IRS Red Flags for Spotting Abusive Tax Shelters* ............................................................ September, 2000 ........ pg. 23 Some Mid-Year Reflections on IRS Audit Activity & New Standards for Examining Agents .. June, 2000 .................. pg. 19 Mid-Year 1999 Tax Issues Round-Up ................................................................................ June, 1999 .................. pg. 12 The IRS Audit Alphabet … Compliance Checks … MSSP - ISP - MSU … TCMP - DIF - DORA .. June, 1995 .................. pg. 7 More on TCMP and DORA ........................................................................................... June, 1995 .................. pg. 22 Update on Economic Reality (a/k/a “Financial Status”) Audits ......................................... March, 1996 ............... pg. 5 Update on Economic Reality (a/k/a “Financial Status”)Audits ......................................... June, 1995 .................. pg. 6 Lifestyle & “Economic Reality” Audit Questions Raising a Controversy ................. PG .. June, 1995 .................. pg. 12 Emerging Partnership Issues of Special Interest to Dealers ................................................ March, 1996 ............... pg. 6 Checklist Comparison of Dealer Tax Issues ....................................................................... June, 1994 .................. pg. 5 Right From the IRS’ Top MSSP Specialist......................................................................... June, 1994 .................. pg. 6 For additional discussions of IRS presentations describing audit activities, etc., See SECTION VIII. CONFERENCE - CONVENTION - SEMINAR (PRESENTATION) SUMMARIES IRS AUDIT TECHNIQUE GUIDES (ATGs) Retail Industry 2009 Issuance … Overview of ATG … At A Glance .................................................... Mid-Year, 2009.......... pg. 41 Determining the Cost Basis for Trade-Ins ..................................................................... Mid-Year, 2009.......... pg. 38 Trade-In Valuation and LCM Adjustments ................................................................... Mid-Year, 2009.......... pg. 39 Dealership E-Commerce … IRS Internet Investigative Tools, Questions & Techniques ..... Mid-Year, 2009.......... pg. 42 New Automobile Dealerships

2004 Revision … Overview of ATG … At A Glance .................................................... March, 2005 ............... pg. 7 Vehicle Service Contracts Emphasis - Audit Technique Flowchart ........................ March, 2005 ............... pg. 13 Dealer Agent & Dealer Obligor Programs … Tax Issues & IRS Audit Techniques ......March, 2005 ............... pg. 14 VSCs & Suspect Oversubmit Situations .................................................................. March, 2005 ............... pg. 15 Possible Income Diversion & Oversubmit Programs ............................................... March, 2005 ............... pg. 16

2000 Revision … Overview of ATG … At A Glance .................................................... December, 2000 ......... pg. 6 Related Entities Flowchart: An Example ................................................................ December, 2000 ......... pg. 9 PORCs & Captive Transactions Exposure ............................................................... December, 2000 ......... pg. 14 Related Finance Company Checklist .............................................................. PG... December, 2000 ......... pg. 15 When PALs Aren’t Friendly .................................................................................... December, 2000 ......... pg. 17 Initial Interview Questions & Concepts ................................................................... December, 2000 ......... pg. 19

1993 Revision … Overview of ATG … At A Glance .................................................... June, 1994 .................. pg. 8 IRS “Package Audit” Requirements ........................................................................ June, 1994 .................. pg. 19 Dealer (Reasonable) Compensation IRS Manual Instructions for Auditing Compensation ........................................ June, 1994 .................. pg. 16 IRS’ Questionnaire on Compensation ................................................................ June, 1994 .................. pg. 20 IRS’ Demo Usage Worksheet .................................................................................. June, 1995 .................. pg. 21 “Real” Audits ........................................................................................................... June, 1995 .................. pg. 10 IRS Information Document Requests, C Corp. and S Corp. Examples .............. June, 1995 .................. pg. 16 Comments on IRS Document Requests .............................................................. June, 1995 .................. pg. 20

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PAGE 54 VII. IRS ACTION, AUDIT ACTIVITY & AUDIT TECHNIQUE GUIDES (continued) IRS AUDIT TECHNIQUE GUIDES (continued) Used Car Dealers

Determining the Cost Basis for Trade-Ins (IRS Retail Industry Audit Technique Guide) ....... Mid-Year, 2009.......... pg. 38 Trade-In Valuation and LCM Adjustments (IRS Retail Industry Audit Technique Guide) ..... Mid-Year, 2009.......... pg. 39

1996 Revision Summary of APRIL, 1996 Guide .......................................................... September, 1996 ........ pg. 18 Audit Techniques: Is it All There? … Where? ........................................................ September, 1996 ........ pg. 20 Loans TO … And … FROM Shareholders .............................................................. September, 1996 ........ pg. 21 Used Car Write-Downs & LIFO Procedures ........................................................... September, 1996 ........ pg. 23

1995 DRAFT Summary of Used Car Dealers IRS Audit Manual ................................. September, 1995 ........ pg. 11 Income Recognition & Reporting Issues ................................................................. September, 1995 ........ pg. 16

Related Finance Companies IRS Information Document Request ........................................................................ March, 1997 ............... pg. 12 IRS Recomputation Adjustments ............................................................................. March, 1997 ............... pg. 14 IRS Issue Development Summary ........................................................................... March, 1997 ............... pg. 16 Cost Segregation Studies Automotive Alert: Cost Segregation at Auto Dealerships (March 2008)* .................... Mid-Year, 2009.......... pg. 20 What’s New from the IRS Point of View …Tracking Recent MVTA Presentations* .. Mid-Year, 2008.......... pg. 5 Cost Segregation Audit Technique Guide / Studies .................................................. Mid-Year, 2008.......... pg. 6 How Fast Can You Depreciate a Dealership’s Fixed Assets?* (Audit Technique Guide, February 2008) ................................................................. Mid-Year, 2008.......... pg. 22 At a Glance … Summary Tables ............................................................................. Mid-Year, 2008.......... pg. 23 What Is the IRS Looking for in a Cost Segregation Study? ..................................... Mid-Year, 2008.......... pg. 26 LMSB Detailed Depreciation Matrix ....................................................................... Mid-Year, 2008.......... pg. 28 Alternative Presentation - Detailed Matrix of Depreciable Lives (Recovery Periods) For Dealership Fixed Assets ............................................................................... Mid-Year, 2008.......... pg. 38 2004 Revision Summary ............................................................................................... December, 2004 ......... pg. 19 What the IRS Wants … IRS Audit Techniques Guide (Rev. Jan. 2005) .................. September, 2006 ........ pg. 26 Shareholder Loans vs. Constructive Dividends

2001 Revision … Overview of Guide … At A Glance* ................................................ June, 2001 .................. pg. 14 12 Critical or Key Factors ........................................................................................ June, 2001 .................. pg. 16 Checklist for Identifying Problem Areas ........................................................ PG... June, 2001 .................. pg. 20 Disguised Dividends Lurking in Related Party Transactions ................................... June, 2001 .................. pg. 22

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PAGE 55 VIII. CONFERENCE - CONVENTION - SEMINAR (PRESENTATION) SUMMARIES AICPA & NADA … COMPARISON OF MOTOR VEHICLE TECHNICAL ADVISOR PRESENTATIONS What’s New from the IRS Point of View …Tracking Recent MVTA Presentations* ....... Mid-Year, 2008.......... pg. 5 LIFO Pooling & IIR Process ......................................................................................... Mid-Year, 2008.......... pg. 6 Cost Segregation Audit Technique Guide / Studies ....................................................... Mid-Year, 2008.......... pg. 6 Section 263A Inventory Cost Capitalization (UNICAP) ............................................... Mid-Year, 2008.......... pg. 7 Employee Tool & Equipment Plans .............................................................................. Mid-Year, 2008.......... pg. 9 LIFO - Vehicle-Pool Method (Rev. Proc. 2008-23) ...................................................... Mid-Year, 2008.......... pg. 12 LIFO Terminations … Automatic vs. Non-Automatic .................................................. Mid-Year, 2008.......... pg. 12 Other Items of Interest ................................................................................................... Mid-Year, 2008.......... pg. 13 AICPA … AICPA NATIONAL AUTO DEALERSHIP ANNUAL CONFERENCES 2012 AICPA National Auto Dealership Conference (Las Vegas, NV) Conference Report ......................................................................................................... Year-End, 2012 .......... pg. 11 The Shape of Things to Come (by James Ziegler) ........................................................ Year-End, 2012 .......... pg. 11 The Legal Horizon for the Franchised Auto Dealer (by Richard Sox) .......................... Year-End, 2012 .......... pg. 12 Dealers Overwhelmed by Federal Regulations (by Paul Metrey) ................................. Year-End, 2012 .......... pg. 14 Update from the IRS Motor Vehicle Technical Advisor (by Terri Harris) .................... Year-End, 2012 .......... pg. 14 Buy-Here, Pay-Here: Is It Right for Your Dealership? (by Kenneth Shilson) ............. Year-End, 2012 .......... pg. 16 New Tangibles Regulations Tackling the Tough Tax Questions ................................. Year-End, 2012 .......... pg. 17 2011 AICPA National Auto Dealership Conference (Orlando, FL) Conference Report ......................................................................................................... Year-End, 2011 .......... pg. 12 Tax Panel Q & A Session .............................................................................................. Year-End, 2011 .......... pg. 13 Updated LIFO Conformity Flowcharts ................................................................ PG ... Year-End, 2011 .......... pg. 14 NADA Letter to the Federal Trade Commission (Motor Vehicle Roundtable Issues) .. Year-End, 2011 .......... pg. 17 Auto Dealer Franchise Legal Update (Richard N. Sox, Esq.) ....................................... Year-End, 2011 .......... pg. 20 2010 AICPA National Auto Dealership Conference (Phoenix, AZ) IRS Tax Issues Update from the IRS Motor Vehicle Technical Advisor Section 263A Application of UNICAP Rules to Auto Dealerships ......................... Year-End, 2010 .......... pg. 10 Dealership Transition Tax Issues ............................................................................. Year-End, 2010 .......... pg. 11 Depreciation, Capitalization of Costs & Sec. 263(a) Capitalization to Repair … C2R ......................................................................... Year-End, 2010 .......... pg. 12 Dealer-Factory Issues Update ........................................................................................ Year-End, 2010 .......... pg. 15 Lessons (for Everyone) Learned from GM & Chrysler Arbitrations ............................. Year-End, 2010 .......... pg. 16 2008 AICPA National Auto Dealership Conference (Las Vegas, NV) IRS Tax Issues Update from the IRS Motor Vehicle Technical Advisor ...................... Year-End, 2008 .......... pg. 12 Practical Tax Applications for Dealerships ................................................................... Year-End, 2008 .......... pg. 12 Latest Manufacturer Initiatives Threatening Dealership Viability ................................ Year-End, 2008 .......... pg. 13 2007 AICPA Auto Dealership Conference (Orlando, FL) A Report ........................................................................................................................ December, 2007 ......... pg. 7 IRS Tax Issues Update from the IRS Motor Vehicle Technical Advisor ...................... December, 2007 ......... pg. 8 Practitioners Tax Panel .................................................................................................. December, 2007 ......... pg. 10 Dealer-Franchise Issues Update …Manufacturer-by-Manufacturer .............................. December, 2007 ......... pg. 12

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PAGE 56 VIII. CONFERENCE - CONVENTION - SEMINAR (PRESENTATION) SUMMARIES (continued) AICPA … AICPA NATIONAL AUTO DEALERSHIP ANNUAL CONFERENCES (continued) 2006 AICPA Auto Dealership Conference (Phoenix, AZ) Summary of “State of the Retail Industry” … Larry Van Tuyl (Watch Out #5) ........... December, 2006 ......... pg. 4 Tax Panel Topics Highlight Planning Areas & Issues ................................................... December, 2006 ......... pg. 5 IRS Tax Issues Update from the IRS Motor Vehicle Technical Advisor ...................... December, 2006 ......... pg. 12 IRS Audit Activity - Examinations, etc. .................................................................. December, 2006 ......... pg. 12 Electronic Records Retention Obligations (Rev. Proc. 98-25) ................................. December, 2006 ......... pg. 12 Technician’s Tool Reimbursement Programs .......................................................... December, 2006 ......... pg. 15 Application of Sec. 263A Inventory Cost Capitalization Rules to Dealerships ....... December, 2006 ......... pg. 15 Changes in the Form of Future IRS Guidance ......................................................... December, 2006 ......... pg. 18 Are CPAs Oversimplifying the “Simplified” Resale Method? ................................ December, 2006 ......... pg. 20 Eliminating Trade Discounts from Inventory Costs & LIFO Eligibility .................. December, 2006 ......... pg. 21 See also Dealers in Transition: Dealer-Manufacturer (Factory) Issues Emerging Manufacturer Initiatives Impacting Auto Dealers ................................... December, 2006 ......... pg. 24 2005 AICPA National Auto Dealership Conference (Baltimore, MD) ............................... December, 2005 ......... pg. 8 IRS Tax Update at the 2005 AICPA National Auto Dealership Conference ................ December, 2005 ......... pg. 10 Technicians’ Accountable Plans for Tool Reimbursements .................................... December, 2005 ......... pg. 10 Energy Policy Act of 2005 … Alternative Motor Vehicle Credits .......................... December, 2005 ......... pg. 12 Domestic Production Activities Deduction … Section 199 ..................................... December, 2005 ......... pg. 12 Electronic Records Retention & Compliance with Rev. Proc. 98-25 ...................... December, 2005 ......... pg. 14 Update on Rulings and Cases & Other Matters ....................................................... December, 2005 ......... pg. 14 Strategies to Minimize Dealership Tax Burden ............................................................. December, 2005 ......... pg. 19 Estate Planning for Dealers & Dealerships ................................................................... December, 2005 ......... pg. 22 2004 AICPA National Auto Dealership Conference (Las Vegas, NV) IRS Update .................................................................................................................... December, 2004 ......... pg. 5 Will the Dealership Survive as a Family Enterprise? .................................................... December, 2004 ......... pg. 6 Larry Miller’s Practical Approach to Dealership Acquisitions ..................................... December, 2004 ......... pg. 6 2003 Conference Summary Report on IRS & Tax Issues (San Antonio, TX) 2003 AICPA National Auto Dealership Conference (Watch Out #7) ........................... December, 2003 ......... pg. 3 IRS Audit Activities ...................................................................................................... December, 2003 ......... pg. 9 Electronic Recordkeeping Requirements ...................................................................... December, 2003 ......... pg. 10 Cost Segregation Studies ............................................................................................... December, 2003 ......... pg. 10 Section 62(c) Accountable Plan Reimbursement Rules for Technicians’ Tools ........... December, 2003 ......... pg. 10 Changes in Accounting Methods to Remove Trade Discounts and Certain Advertising Expenses from Inventory Costs ............................................... December, 2003 ......... pg. 11 Demonstrator Vehicles - IRS Pub. 4230........................................................................ December, 2003 ......... pg. 12 PORC Activities & 2003 Tax Return Reporting Issues ................................................ December, 2003 ......... pg. 14 Form 8886 Instructions ............................................................................................ December, 2003 ......... pg. 20 Form 8886 Pro Forma ............................................................................................. December, 2003 ......... pg. 21

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PAGE 57 VIII. CONFERENCE - CONVENTION - SEMINAR (PRESENTATION) SUMMARIES (continued) AICPA … AICPA NATIONAL AUTO DEALERSHIP ANNUAL CONFERENCES (continued) 1999 Conference Summary Report on Dealership Tax Issues* Used Car Write-Downs ................................................................................................. December, 1999 ......... pg. 4 Sub-Prime Financing & Related Finance Companies ................................................... December, 1999 ......... pg. 4 Dealer Software & Replacement Cost for Parts Inventories ......................................... December, 1999 ......... pg. 5 Leasing Issues: Substance vs. Form and Other Issues .................................................. December, 1999 ......... pg. 7 Technician Tool Rental and Reimbursement Plans ....................................................... December, 1999 ......... pg. 7 Extended Service Contracts ........................................................................................... December, 1999 ......... pg. 8 Manufacturers’ Incentive Payments .............................................................................. December, 1999 ......... pg. 8 Depreciable Life of Certain Dealer Realty .................................................................... December, 1999 ......... pg. 8 Demonstrator Vehicles - Coming Soon: A Bright-Line Test ....................................... December, 1999 ......... pg. 9 Reporting Factory Finance Assistance Payments .......................................................... December, 1999 ......... pg. 10 1996 AICPA Auto Dealership Conference .......................................................................... December, 1996 ......... pg. 3 1995 AICPA Auto Dealership Conference .......................................................................... December, 1995 ......... pg. 15 1994 AICPA National Auto Dealership Conference ........................................................... December, 1994 ......... pg. 4 NADA … NATIONAL AUTOMOBILE DEALERS ASSOCIATION ANNUAL CONVENTION 2012 Dealer Tax Issues Workshop - NADA Convention ................................................... Mid-Year, 2012.......... pg. 8 NADA’s Request for LIFO Relief under Section 473 ................................................... Mid-Year, 2012.......... pg. 8 IRS Motor Vehicle Technical Advisor .......................................................................... Mid-Year, 2012.......... pg. 8 Industry Panelists Comments ........................................................................................ Mid-Year, 2012.......... pg. 9

2009 NADA Convention - Dealer Tax Update by the IRS Motor Vehicle Technical Advisor Cost Segregation Studies for Auto Dealerships ............................................................. Mid-Year, 2009.......... pg. 8 Procedures for Terminating LIFO Elections ................................................................. Mid-Year, 2009.......... pg. 9 Employment Tax Issues of Employer Tool (Reimbursement) Plans ............................ Mid-Year, 2009.......... pg. 10 LIFO Pooling, Including Procedures for Combining LIFO Pools for All New Vehicles Under the Vehicle-Pool Method and Pooling Treatment of Crossover Vehicles (Where the Vehicle-Pool Method Is Not Used) ....................................................... Mid-Year, 2009.......... pg. 11 Sec. 263A … Application of Inventory Cost Capitalization Rules to Dealerships ........... Mid-Year, 2009.......... pg. 12 Used Vehicle Writedowns ............................................................................................. Mid-Year, 2009.......... pg. 14 New Vehicle Writedowns .............................................................................................. Mid-Year, 2009.......... pg. 14 Depreciation of “Free Loaner” Vehicles ....................................................................... Mid-Year, 2009.......... pg. 15 Payments Received for Discontinuation of Franchise ................................................... Mid-Year, 2009.......... pg. 15 Concern Over Aggressive Tax Return Positions ........................................................... Mid-Year, 2009.......... pg. 15

2008 NADA Convention … See AICPA & NADA … COMPARISON OF MOTOR VEHICLE TECHNICAL ADVISOR PRESENTATIONS, What’s New from the IRS Point of View … Tracking Recent MVTA Presentations*............................... Mid-Year, 2008.......... pg. 5

2007 NADA Convention Walking Around ............................................................................................................ March, 2007 ............... pg. 2 Emerging Manufacturer Initiatives Impacting Auto Dealers ......................................... March, 2007 ............... pg. 4 Dealer Concerns - Issues from Make Meetings ............................................................. March, 2007 ............... pg. 40

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PAGE 58 VIII. CONFERENCE - CONVENTION - SEMINAR (PRESENTATION) SUMMARIES (continued) NADA … NATIONAL AUTOMOBILE DEALERS ASSOCIATION ANNUAL CONVENTION (continued) 2006 NADA Convention Walking Around ............................................................................................................ March, 2006 ............... pg. 13 Current Dealer-CPA Association Members .................................................................. March, 2006 ............... pg. 17 “State of the Industry” Seminar Hits the Mark .............................................................. March, 2006 ............... pg. 19 Dealer Concerns - Issues from Make Meetings ............................................................. March, 2006 ............... pg. 24

2005 NADA Convention Wandering Around at the 2005 NADA Convention ..................................................... March, 2005 ............... pg. 27 What Lies Ahead? Dealer Concerns at the NADA 2005 Convention .......................... March, 2005 ............... pg. 28

2004 NADA Convention Tax Strategies for Dealers - NADA Workshop ............................................................. March, 2004 ............... pg. 4 Dealer Concerns ............................................................................................................ March, 2004 ............... pg. 10

1995 NADA Convention Convention Overview .................................................................................................... March, 1995 ............... pg. 3 Tax Update - IRS “Short List” Workshop ..................................................................... March, 1995 ............... pg. 19

1994 NADA Convention Tax Update - IRS Audit Issues Workshop .................................................................... June, 1994 .................. pg. 7 NABD … NATIONAL ALLIANCE OF BUY-HERE, PAY-HERE DEALERS CONFERENCES 2006 National Conference for Buy-Here, Pay-Here Dealers (Watch Out #4) .................... June, 2006 .................. pg. 2 2000 National Buy-Here, Pay-Here Dealers Convention & Related Developments .......... June, 2000 .................. pg. 4 DE FILIPPS’ DEALER TAX UPDATE SEMINAR SUMMARIES De Filipps’ 2010 AICPA Presentation … Practitioner’s Nightmare: Uncertainty & Dealership Tax Issues ................................ Year-End, 2010 .......... pg. 46 Revised Form 3115 for Changes in Accounting Methods & Revised Instructions .. Year-End, 2010 .......... pg. 47 Importance of the Concept of “Separate Trades or Businesses” .............................. Year-End, 2010 .......... pg. 48 Terminated Dealerships & Franchises: Writing Off Intangibles ............................. Year-End, 2010 .......... pg. 49 IRS Movement to Deputize CPAs to Become More Like IRS Agents .................... Year-End, 2010 .......... pg. 51 LIFO (Last-In, First-Out) Inventory Valuation Matters ........................................... Year-End, 2010 .......... pg. 53 De Filipps’ Year-End 2009 Dealer Tax Update Seminar Outline ...................................... Year-End, 2009 .......... pg. 40 De Filipps’ Year-End 2008 Dealer Tax Update Chief Counsel Memo on Combining LIFO Pools ......................................................... Year-End, 2008 .......... pg. 46 Personal Goodwill in Business Sales (Solomon & Muskat Cases) ................................ Year-End, 2008 .......... pg. 48 De Filipps’ Mid-Year 2008 Dealer Tax Update … Tax Strategies & IRS Activities .......... Mid-Year, 2008.......... pg. 63 De Filipps’ Dec. 2005 Teleconference … Year-End 2005 Dealer Tax Update (Outline)* .... December, 2005 ......... pg. 24

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PAGE 59 VIII. CONFERENCE - CONVENTION - SEMINAR (PRESENTATION) SUMMARIES (continued) DE FILIPPS’ CPA-AUTO DEALERSHIP NICHE CONFERENCES 2001 De Filipps 4th Annual CPA-Auto Dealership Niche Conference Legal Issues Facing Dealerships … Dan Myers ............................................................ September, 2001 ........ pg. 8 Valuing Dealerships in the Trenches … Tim York ...................................................... September, 2001 ........ pg. 10 What’s a Franchise Worth? … Mark Schmitz .............................................................. September, 2001 ........ pg. 13 IRS Current Tax Hot Topics for Auto Dealers - IRS Perspective … Terri Harris ........ September, 2001 ........ pg. 15 Auto Dealer-IRS Current Tax Issues - Practitioner’s Perspective … Will De Filipps .. September, 2001 ........ pg. 17 Tax Panel Questions & Answers ................................................................................... September, 2001 ........ pg. 19 Technology Trends in the Automobile Industry … Sandi Jerome ................................ September, 2001 ........ pg. 21 Employment Issues & Comp. Plans for Key Dealership Employees … John Boggs ... September, 2001 ........ pg. 24 Sample Compensation Programs - Salespersons ............................................. PG ... September, 2001 ........ pg. 26 Sample Compensation Programs - Closer-Assistant Sales Manager ............. PG ... September, 2001 ........ pg. 29 2000 De Filipps 3rd Annual CPA-Auto Dealership Niche Conference ............................... June, 2000 .................. pg. 7 Dealership Red Flags … A “Watch It” List ......................................................... PG ... June, 2000 .................. pg. 11 OTHER CONFERENCES AICPA 2005 National Conference on Federal Taxes (Washington, D.C.) ......................... December, 2005 ......... pg. 8 National CPA / IRS Tax Issues - 2005 Meeting (Washington, D.C.) ................................. December, 2005 ......... pg. 8 Car Dealer Insider Conferences Dealers Going Public or Considering Alternatives Tax Concerns & Highlights (Nov., 1997) ........ December, 1997 ......... pg. 3 Project 2000: “Survive & Thrive Beyond 2000” (April, 1996) .................................... June, 1996 .................. pg. 12 CreditRe PORC Conferences PORC Update Conference … Nov. 2004 - Dallas … A Report ................................... December, 2004 ......... pg. 9 VSC-PORC Conference Report .................................................................................... September, 1997 ........ pg. 26 PORC Conference: Oink … Oink* .............................................................................. September, 1996 ........ pg. 10

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PAGE 60 IX. FINDING LISTS - Cases CASES A.I.D., Inc. ..................... Dealer Reasonable Compensation ............................................. September, 1994 ........ pg. 8 (Automotive Investment Development, Inc.) Alacare H.H.S., Inc. ....... Fixed Assets Costing Under $500 - Capitalization Required .... September, 2001 ........ pg. 4 Bale Chevrolet Co. ......... Denial of Request for Reimbursement of Litigation Costs ........ Year-End, 2010 .......... pg. 9 Beaver Bolt, Inc. ........... Buy-Sell Allocations and Deductions ........................................ December, 1995 ......... pg. 16 ............ Section 7430 & Recovery of Legal Fees ................................... March, 1997 ............... pg. 24 Berger Chevrolet, Inc. ... Deductibility of Commissions Paid for Selling Credit Life Insurance .... December, 1997 ......... pg. 8 Best Auto Sales ............. Used Car Dealer - Inadequate Records & Recordkeeping ......... March, 2003 ............... pg. 14 Bies, Marie v. Comm. ..... Indirect Gifts .............................................................................. December, 2000 ......... pg. 3 BMW of North America ..... Improper Valuation of Demonstrator Vehicle Usage ................ March, 1999 ............... pg. 4 Bob Wondries Motors† ....... Deductibility of Premiums Paid for VSC Contracts .................... December, 2001 ......... pg. 24 Brown, James, et al. ....... Payment Received by an Individual to Induce Him to Purchase a Minority Stock Interest Was a Non-Taxable Reduction of His Cost Basis - Analysis & Summary ................................ Mid-Year, 2012.......... pg. 28 ............. Analysis & Summary ................................................................. Year-End, 2011 .......... pg. 50 Burien Nissan, Inc. .........Dealer Non-Compete Agreements & Sec. 197 (Watch Out #6) ..................December, 2003 ......... pg. 3 ...... June, 2001 .................. pg. 6 Buyers Home Warranty Co. . Penalty for Waiting Too Long to File Form 3115 ..................... March, 1998 ............... pg. 4 Cordes Finance Corp. .... The Cordes Family, et al. vs. the IRS ........................................ June 2003 ................... pg. 11 ............ Cordes Finance … Supreme Court Denies Certiorari* ............ September, 1999 ........ pg. 3 ............ IRS Change in Dealer’s Accounting for Interest Income & $300,000 Underpayment Penalty Upheld by Court of Appeals ..... December, 1998 ......... pg. 23 ............ IRS Changes RFCs Accounting for Interest Income ................. June, 1997 .................. pg. 22 Cordes, Eddie, Inc., as Transferee .................................................................................... June 2003 ................... pg. 11 Cordes, Eddie, Inc., et al. ................................................................................................... June 2003 ................... pg. 11 Cordes, Edmund & June ................................................................................................... June 2003 ................... pg. 11 Cordes, June, et al. ............................................................................................................. June 2003 ................... pg. 11 David Taylor Enterprises ... Classic Cars - Status as Inventory for an Auto Dealership ....... September, 2005 ........ pg. 22 De Paz, et al. v. Comm. ...... Sec. 62(c) Accountable (Reimbursement) Plans ........................ June, 2005 .................. pg. 35 ...................... June, 2000 .................. pg. 12 ...................... June, 2000 .................. pg. 14 East Ford ........................ Buy-Sell Allocations and Deductions ........................................ June, 1994 .................. pg. 2 Executive Auto Haus, Inc. .. Auto Dealer Held Not Responsible for Unpaid Luxury & Frank Holtham, Sr. Vehicle Excise Taxes (Watch Out #3) ...................................... September, 2002 ........ pg. 2 Freedom Newspapers, Inc. Certain Payments Excludable from Taxable Income ................. Mid-Year, 2012.......... pg. 30 Froehlich, Lee D. ........... Dealer’s Repayment on Floor Plan Guarantee ........................... December, 1996 ......... pg. 14 Frontier Chevrolet Co. ... Dealer Non-Compete Agreements & Sec. 197 .......................... June, 2003 .................. pg. 8 ............................ June, 2001 .................. pg. 6 ............ Cited & Compared in Recovery Group, Inc. .............................. Mid-Year, 2010.......... pg. 41 General Motors Corp. & Subs ............ Footnote #30 - Certain Payments Excludable from Taxable Income ................................................................ Mid-Year, 2012.......... pg. 28 Griffin, Wade H. v. Comm. . Tax on Proceeds from Franchise-Related Settlement ..................... March, 2001 ............... pg. 18

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PAGE 61 IX. FINDING LISTS - Cases (continued) CASES (continued) Haddad Motor Group..... Dealership Successfully Sues CPA Firm for Improper Tax Advice over Built-in Gains Tax ......................... Mid-Year, 2010.......... pg. 14 Hampton Pontiac, Inc. .... Payments to Dealer for Assistance in Franchise Termination ........ March, 2002 ............... pg. 14 Heritage Auto Center, Inc. .. Buy-Sell Allocations and Deductions ........................................ March, 1996 ............... pg. 7 ........................................ September, 1995 ........ pg. 3 Hinshaw’s, Inc. ............ Deductibility of Premiums Paid for VSC Contracts .................. September, 1994 ........ pg. 22 Hood v. Comm. ............ Deductibility of Legal Fees & Expenses Paid for Another Party..... Mid-Year, 2009.......... pg. 32 Howard Pontiac-GMC ... Covenant Not to Compete Allocations ...................................... December, 1997 ......... pg. 11 Jensen, Donald L. vs. US ... Form 8300 & Money Laundering .............................................. December, 1995 ......... pg. 19 Johnson, Michael H. ...... Proceeds From Property Sold Under Threat of Condemnation ...... March, 1999 ............... pg. 14 Johnson, Rameau .......... Tax on & Deductibility of Premiums Paid for VSC Contracts .. September, 1999 ........ pg. 6 … ...... Taxation of Payments Received for VSCs ................................. September, 1997 ........ pg. 15 … ...... What the Tax Court Said in Rameau Johnson ........................... September, 1997 ........ pg. 23 McCurley, William F. .... “Advances” from Offshore PORC to Dealer Are Dividends ..... September, 1997 ........ pg. 30 Maguire, James et al. ..... Creating Basis in S Corp. Stock So Losses Can Be Currently Deducted … (Watch Out #6) .................................... Year-End, 2012 .......... pg. 2 ........................................ Good Tax Planning Pays Off ............ Year-End, 2012 .......... pg. 18 Martin Ice Cream Co. .... Dealership Sales … Corporate vs. Individual Goodwill ............ December, 2003 ......... pg. 6 Matthews, W. R. ............. Payments to Dealer for Assistance in Franchise Termination ....... March, 2002 ............... pg. 14 Menard, Inc. v. Comm. .. Reasonable Compensation: A Case to Remember When Dealership Times Are Better (Watch Out #11) ........................ Mid-Year, 2009.......... pg. 5 Metro Leasing & Development Corp. Reasonable Compensation & Sec. 531 Penalty Tax on Unreasonable Accumulation of Earnings ................................. June, 2002 .................. pg. 6 Misle, Henry v. Comm. .... Disguised Payments for Dealer’s Benefit after Restructuring ......... December, 2000 ......... pg. 3 Mountain State Ford Truck Sales, Inc. ....... Use of Replacement Cost Method for Valuing Parts Inventories .... December, 1999 ......... pg. 5 .... September, 1999 ........ pg. 1 .... March, 1999 ............... pg. 2 Muskat, Irwin v. USA .... Personal Goodwill in Business Sales ......................................... Year-End, 2008 .......... pg. 48 Namyst, Steven & Terry .... Sec. 62(c) Accountable (Reimbursement) Plans .........................June, 2006 .................. pg. 4 ........................ June, 2005 .................. pg. 31 O’Brien, Kevin ............... Tax Court Denies Car Salesman’s Unsubstantiated Expenses ... September, 2000 ........ pg. 3 Peacock, James R. .......... Fishing Losses - Treatment as Section 183 Hobby Activities ... September, 2002 ........ pg. 3 Peaden, Harry E. Jr. ...... Terminal Rental Adjustment Clauses (TRACs) & Leasing ....... December, 1999 ......... pg. 14 Recovery Group, Inc. .... Covenants Not to Compete Are Subject to 15-Year Amortization (Watch Out #7) .................................... Year-End, 2011 .......... pg. 3 .... Business Acquisitions & the Broad Reach of Section 197 ........ Mid-Year, 2010.......... pg. 41 Richardson, E. W. Corporate Aircraft - Deductibility ................................................... September, 1996 ........ pg. 5 ............................................... June, 1996 .................. pg. 4

DEALER TAX WATCH


PAGE 62 IX. FINDING LISTS (continued) CASES (continued) Shotgun Delivery, Inc. ... Sec. 62(c) Accountable (Reimbursement) Plans ........................ June, 2005 .................. pg. 36 ........................ December, 2001 ......... pg. 23 ........................ March 2000 ................ pg. 6 Solomon v. Comm. ......... Personal Goodwill in Business Sales ......................................... Year-End, 2008 .......... pg. 48 Spitzer Columbus, Inc. ... Accounting for Issuance of Rebate Coupons ............................. September, 1995 ........ pg. 8 Springfield, Martin, d/b/a Douglas Motors ............ Worker Classification ................................................................ September, 1996 ........ pg. 14 ................................................................. March, 1995 ............... pg. 12 Strong, Raymond ............ Meals & Entertainment Expense Substantiation - Sec. 274(d) ....... June, 1997 .................. pg. 7 Superior Motors, Inc. ..... Dealer Reasonable Compensation ............................................. September, 1994 ........ pg. 17 Toyota Town v. Comm.† ... Deductibility of Premiums Paid for VSC Contracts .................. June, 2000 .................. pg. 14 ................... December, 2001 ......... pg. 24 Trans-Box Systems v. US.. Sec. 62(c) Accountable (Reimbursement) Plans ........................ June, 2005 .................. pg. 35 Trucks, Inc. v. US .......... Sec. 62(c) Accountable (Reimbursement) Plans ........................ June, 2005 .................. pg. 34 Twin City Dodge-Chrysler Dealer Reasonable Compensation ............................................. June, 1997 .................. pg. 4 Tysinger Motor Co. v. US .. Dealership Escapes Major Penalty for Not Filing Forms 8300 ....... June, 2006 .................. pg. 10 West Covina Motors ......... Allocation of Professional Fees Paid in the Acquisition of a Dealership ... West Covina Motors, Inc. Revisited ............ Mid-Year, 2010.......... pg. 46 ................. Step-by-Step Analysis of Computation Allowed by Tax Court . Mid-Year, 2010.......... pg. 50 .................. Aggressive Dealership Deductions Disallowed… A Good Refresher for Some Basic Principles ........................... Mid-Year, 2009.......... pg. 24 White, John B., Inc. ...... Payment by Ford Motor Co. to Induce a Dealership to Relocate Was Taxable Upon Receipt … It Was Not a Contribution to the Dealership’s Capital ....................................................... Mid-Year, 2012.......... pg. 31 ...................................................... Year-End, 2011 .......... pg. 44 Whitehead, Herbert L. ... Buy-Sell Payments - Constructive Dividends ............................ March, 2002 ............... pg. 9 Yarbrough Olds Cadillac .. Loans to Dealer/Shareholder ..................................................... December, 1995 ......... pg. 3

DEALER TAX WATCH


PAGE 63 IX. FINDING LISTS - IRS Documents & Publications (continued) AUTOMOTIVE ALERTS (IRS MOTOR VEHICLE TECHNICAL ADVISOR) October, 2000 … Service Contract “Overpayment” Programs May Improperly Divert Dealership Income ................................................................... March, 2006 ............... pg. 46 January, 2005 … Electronic Records Retention Requirements for Dealerships … R.P. 98-25 . March, 2005 ............... pg. 30 January, 2006 … Alternative Motor Vehicle Credits … Notice 2006-9 ............................. March, 2006 ............... pg. 33 January, 2006 … Service Technicians’ Tool Reimbursement Plans … Rev. Rul. 2005-52 .. March, 2006 ............... pg. 38 March, 2006 … Cash Reporting & Your Dealership … Form 8300 Questions & Answers† March, 2006 ............... pg. 40 † See Updated Alert on Cash Reporting (January 2009) below. January, 2007 … IRC Section 263A … Auto Dealership Questions & Answers ................ June, 2007 .................. pg. 8 January, 2008 … Dealership UNICAP Issues Addressed in TAM 200736026 ................... Mid-Year, 2008.......... pg. 17 January, 2009 … Dealership Loaner Vehicle Fleets and Depreciation ............................. Mid-Year, 2009.......... pg. 16 March, 2008 … Cost Segregation at Auto Dealerships ................................................... Mid-Year, 2009.......... pg. 20 January, 2009 … Cash Reporting Q&A (Updated) ............................................................ Mid-Year, 2009.......... pg. 23 January, 2009 … Tax Court Rules on Inventory Writedowns: West Covina Motors, Inc. . Mid-Year, 2009.......... pg. 36 July, 2009 … “Cash for Clunkers” … Taxability of Payments to Dealerships ............ Year-End, 2009 .......... pg. 13 January, 2011 … Rev. Proc. 2010-44 Provides UNICAP Relief ........................................ Mid-Year, 2011.......... pg. 38 February, 2012 … Factory Image Upgrade Payments ....................................................... Mid-Year, 2012.......... pg. 26 February, 2012 … IRS Issues New Regulations: Deductions & Capitalization of Expenditures Related to Tangible Property ........................................ Mid-Year, 2012.......... pg. 50 CHIEF COUNSEL MEMOS & NOTICES CCM 200825044 … Chief Counsel Memo on Combining LIFO Pools ............................. Year-End, 2008 .......... pg. 46 CC-2006-013 … What’s Wrong with the TAM Process & How the Generic Legal Advice Memorandum (GLAM) … May Be More Effective ............................ September, 2006 ........ pg. 15 COORDINATED ISSUE PAPERS (CIPs) & TASK FORCE ALERTS Covenants Not to Compete (February, 1996) ..................................................................... March, 1996 ............... pg. 19 Depreciable Life for Dealership Service Bays (March, 2000) ............................................ September, 2000 ........ pg. 18 Service Technician Tool Reimbursements (June, 2000) ..................................................... September, 2000 ........ pg. 6 CIP … Generally Negative on Tool Plan Payments to Auto Dealer Service Technicians .. June, 2005 .................. pg. 22 IRS Task Force Alert Advises Tool Plans to “Take a Cautious Approach”........................ Mid-Year, 2008.......... pg. 49 IRS Revised Coordinated Issue Paper Hammers Employee Tool Plans (July, 2008) ........ Mid-Year, 2008.......... pg. 50 FIELD ATTORNEY ADVICE (FAAs) 201111001F … Dealership Non-Deductibility of Purportedly Worthless Goodwill ......... Mid-Year, 2011.......... pg. 16 FIELD SERVICE ADVICE MEMORANDA 1999-953 … Dealer Off-Shore Reinsurance Arrangements Get Favorable Guidance ... September, 1999 ........ pg. 17 1999-1161 … Ad Association Payments: Not Deductible by Dealers until the Year When Economic Performance Occurs ....................................................... September, 1999 ........ pg. 3 199940002 … Service Technician Tool Rental & Reimbursement Plans - Part 2 ............ December, 1999 ......... pg. 10 200127004 … Two FSAs Shed More Light on IRS Objections to Plans .......................... June, 2005 .................. pg. 33 .......................... September, 2001 ........ pg. 6 200132003 … Two FSAs Shed More Light on IRS Objections to Plans .......................... June, 2005 .................. pg. 34 .......................... September, 2001 ........ pg. 6

DEALER TAX WATCH


PAGE 64 IX. FINDING LISTS - IRS Documents & Publications (continued) IRS FACT SHEETS 2003-16 … IRS Emphasizes Form 8300 Reporting & Proper Behavior ......................... September, 2003 ........ pg. 7 ILM … IRS LEGAL MEMORANDA 199917011 … Technician Tool Rental & Reimbursement Programs................................. June, 2005 .................. pg. 37 ................................................................................................................... June, 1999 .................. pg. 3 199921003 … Technician Tool Rental & Reimbursement Programs................................. June, 2005 .................. pg. 37 ................................. June, 1999 .................. pg. 3 199921045 … Cost Segregation Studies Maximize Depreciation Opportunities ............... September, 2000 ........ pg. 14 199952010 … There’s No Such Thing as an Expenditure Too Small to Capitalize ........... March, 2000 ............... pg. 5 200006005 … Technician Tool Rental & Reimbursement Programs................................. June, 2005 .................. pg. 36 … IRS Hammers Dealer’s Technician Tool Reimbursement Plan ................. March 2000 ................ pg. 6 200006005 … IRS Issues Negative Opinion on Service Tech Tool Plans ......................... September, 2000 ........ pg. 4 200221010 … Inadequate Disclosure of LLC Interest in Gift Tax Return Fails to Start Statute of Limitations .................................................................... March, 2003 ............... pg. 18 200745018 … Tool Reimbursement Plan is a Nonaccountable Plan .................................. December, 2007 ......... pg. 34 200935024 … Year-End Planning for Dealers on LIFO .................................................... Year-End, 2009 .......... pg. 34 … IRS Guidance on Section 481(a) Adjustment Issues ................................. Year-End, 2009 .......... pg. 35 200945034 … ILM on Trade Discounts Indirectly Emphasizes that the Proper Treatment for Floorplan Assistance Payments Is to Exclude Them from Inventory Costs ................................................................................. Mid-Year, 2010.......... pg. 5 201120021 … IRS Finds Another Non-Compliant Employee Tool Reimbursement Plan .. Mid-Year, 2011.......... pg. 46 ITA … IRS TECHNICAL ASSISTANCE MEMORANDA 199932007 … Dealer Off-Shore Reinsurance Arrangements Get Favorable Guidance ... September, 1999 ........ pg. 17 LMSB (LARGE & MID-SIZE BUSINESS DIVISION) DIRECTIVES LMSB-4-0909-035 … IRS Moratorium on Raising Sec. 263A Issues Urges Dealerships to File Forms 3115 to Change Their Accounting Methods ......... Year-End, 2009 .......... pg. 14 LMSB-04-1007-069 … IRS Concern Over Possible Abuse of Capital Contribution Provision … (Watch Out #5) ................................. December, 2007 ......... pg. 5 ........................................... IRS Audit Discussion Agendas, Agreements & Initiatives Used by the IRS LMSB Division ............................................. September, 2006 ........ pg. 4

DEALER TAX WATCH


PAGE 65 IX. FINDING LISTS - IRS Documents & Publications (continued) LETTER RULINGS (INCL. TECHNICAL ADVICE MEMORANDA) … AFTER 1998 199906037 … Used Car Dealer Hit with Back-Up Withholding for Not Filing 1099 ........ March, 1999 ............... pg. 12 199909002 … IRS Gives Green Light … But No Real Direction … to BHPH Sales of Sub-Prime Notes to Unrelated Loan Servicing Companies ............... March, 1999 ............... pg. 8 199909003 … IRS Gives Green Light … But No Real Direction … to BHPH Sales of Sub-Prime Notes to Unrelated Loan Servicing Companies ............... March, 1999 ............... pg. 8 199911044 … IRS Gives Advice on Dealer LIFO Pooling Under the Alternative LIFO Method ....................................................................... June, 1999 .................. pg. 2 199924001 … Dealer Off-Shore Reinsurance Arrangements Get Favorable Guidance .... September, 1999 ........ pg. 17 200119039 … Dealer Reinsurance Company Arrangements…Favorable Developments .. June, 2001 .................. pg. 2 200120001 … More on BHPH Dealer Sales of Notes to Loan Servicing Company .......... June, 2001 .................. pg. 3 200218034 … IRS Rules Favorably for Some Oldsmobile Dealers ................................... March, 2002 ............... pg. 12 .......... Treatment of Payments Received by Dealerships for the Cancellation of Distributor Agreements ........................................................ June, 2007 .................. pg. 13 200243057 … Used Car Dealer’s Not-So-Charitable Car Donation Arrangement Disallowed .. March, 2003 ............... pg. 21 200450005 … Passenger Autos & SUVs Are “Like-Kind” Sec. 1031 Property (Watch Out #10) .... March, 2005 ............... pg. 6 200453012 … IRS TAMs on PORCs Now Say They’re OK (Watch Out #3) .................... March, 2005 ............... pg. 2 …PORC & Insurance Arrangements in Two TAMs … Are Not Shams ....... March, 2005 ............... pg. 18 …Favorable Rulings on Reinsurance Programs by the IRS ................................ March, 2005 ............... pg. 24 200453013 … IRS TAMs on PORCs Now Say They’re OK (Watch Out #3) .................... March, 2005 ............... pg. 2 …PORC & Insurance Arrangements in Two TAMs … Are Not Shams ....... March, 2005 ............... pg. 18 …Favorable Rulings on Reinsurance Programs by the IRS ......................................March, 2005 ............... pg. 24 200501016 …Cash Transaction Reporting ........................................................................ June, 2006 .................. pg. 28 200736026 …Sec. 263A Application of Inventory Cost Capitalization Rules to Auto Dealers . September, 2007 ........ pg. 8 200736026 …Dealership UNICAP Issues Addressed in TAM 200736026 ..................... Mid-Year, 2008.......... pg. 17 200930029 …IRS LTR Approves a “Tool Reimbursement Plan”..................................... Year-End, 2009 .......... pg. 38 201111004 …Deferring “Gain” on Involuntary Conversions of LIFO Inventories ........... Mid-Year, 2011.......... pg. 7 …Tax Planning Opportunities for Dealerships in Disaster Areas ................... Mid-Year, 2011.......... pg. 12 201126014 …Missed Form 3115 Filings Dates Require Extensions ................................. Year-End, 2011 .......... pg. 30 201128002 …Missed Form 3115 Filings Dates Require Extensions ................................. Year-End, 2011 .......... pg. 30 201237003 …Be Careful When Filing Copies of Form 3115 ........................................... Year-End, 2012 .......... pg. 10

DEALER TAX WATCH


PAGE 66 IX. FINDING LISTS - IRS Documents & Publications (continued) LETTER RULINGS (INCL. TECHNICAL ADVICE MEMORANDA) … BEFORE 1999 8712043 … A Tax-Free Split-Off to Satisfy the Factory… A “Project 2000” Precursor ... September, 1998 ........ pg. 20 9417028 … Tax Treatment of Vehicle (Extended) Service Contracts (VSCs) ................... September, 1994 ........ pg. 22 9522002 … No Write-Downs of Demonstrator Vehicles at Year-End ............................... June, 1995 .................. pg. 3 9522036 … A Tax-Free Split-Off to Separate Parents from Their Children ...................... September, 1998 ........ pg. 23 9525003 …IRS Rulings on Manufacturer Incentive Payments .......................................... December, 1998 ......... pg. 8 9525003 … Factory Incentive Payments - Who Pays the Employer’s FICA? .................... June, 1995 .................. pg. 4 9534023 … BHPH Dealer Allowed Deduction for Loss on Sale of Notes to RFC ............ September, 1995 ........ pg. 19 9535009 … Auto Dealership Financial Statement Conformity Requirement ..................... September, 1995 ........ pg. 22 9535010 … Auto Dealership Financial Statement Conformity Requirement ..................... September, 1995 ........ pg. 23 9616023 … A Tax-Free Spin-Off to Reduce Inventory Financing Costs ........................... September, 1998 ........ pg. 17 9644027 … S Corp. Converting to LLC/Partnership Avoids LIFO Recapture Tax ........... December, 1996 ......... pg. 26 9647003 … IRS Rulings on Manufacturer Incentive Payments ......................................... December, 1998 ......... pg. 7 9704002 … Transfer of Notes to RFC Lacks Economic Substance ................................... March, 1997 ............... pg. 10 9718003 … Cash Transaction Reporting ............................................................................ June, 2006 .................. pg. 28 9718004 … Gifting Dealership Stock & Other Assets: Amending Prior Gift Tax Returns to Claim Larger Discounts and Tax Benefits ................. June, 1997 .................. pg. 11 9723004 … BHPH Dealer Must Inventory Used Vehicles: Securities Dealer, Auto Dealer, or Both? … Possible Section 475 Application? .................... June, 1997 .................. pg. 18 9801002 … Taxable Fringe Benefits for Drivers & Big Tax Liabilities for Auto Dealership Created by Demonstrator Use ................................... December, 1997 ......... pg. 15 9816007 … Another Demo Ruling … With an Even More Disturbing Message ............... June, 1998 .................. pg. 5 9829050 … A Tax-Free Split-Off to Settle Shareholder Disputes ...................................... September, 1998 ........ pg. 14 9840001 … Transfers of Sub-Prime Customers’ Notes by Used Car Dealership to Unrelated Loan Servicing Company Are “Sales” .................................. December, 1998 ......... pg. 10 9853003 … Used Car LIFO Computations Take a Hit (“52 Week” Method) .................... March, 1999 ............... pg. 2 NOTICES 98-31 … Rules for Agents Changing Taxpayers’ Accounting Methods on Audit ............. September, 1998 ........ pg. 3 98-31 … Better Think Twice about Waiting for the IRS to Come in and Make You Change Methods .......................................................................... June, 1998 .................. pg. 8 2000-65 … Valuation of Demonstrator Usage by Dealership Employees ......................... June, 2001 .................. pg. 12 2001-48 … Valuation of Demonstrator Usage by Dealership Employees ......................... June, 2001 .................. pg. 12 2001-76 … Use of the Cash Method by Used Car BHPH Dealers .................................... March, 2002 ............... pg. 6 2001-76 … Use of the Cash Method by Used Car BHPH Dealers .................................... June, 2002 .................. pg. 4 2002-70 … Disclosure Requirements, “Grandfather” Exemption & Forms 8886 Proformas . September, 2004 ........ pg. 16 2002-70 … IRS Audit of PORC Activities & Tax Return Reporting - Disclosure Issues . December, 2003 ......... pg. 14 IRS Audit of PORC Activities ..................................................................... December, 2003 ......... pg. 15 Form 8886 Instructions & Proformas ......................................................... December, 2003 ......... pg. 20 2002-70 … The IRS Broadens its Attack on Tax Shelters to Include Dealer PORCs ........ December, 2002 ......... pg. 4

DEALER TAX WATCH


PAGE 67 IX. FINDING LISTS - IRS Documents & Publications (continued) NOTICES (continued) 2004-65 … Dealer PORCs Set Free ................................................................................... September, 2004 ........ pg. 30 2005-59 … Additional Criteria IRS Will Apply in Considering Proposals Re: Sec. 62(c) Plans for the IRS Industry Issue Resolution (IIR) Program ......................... September, 2005 ........ pg. 14 2005-88 … e-Filing Hardship Waivers May Be Hard to Obtain (Watch Out #12) ............ December, 2005 ......... pg. 4 2005-93 … Disclosure of Tax Return Information - Proposed Regulations ...................... December, 2005 ......... pg. 6 2006-9 … Automotive Alert!… Alternative Motor Vehicle Credits ................................. March, 2006 ............... pg. 33 2008-11… Stricter Standards for Avoidance of Preparer Penalties (Section 6694) .......... December, 2007 ......... pg. 24 2008-12… Stricter Standards for Avoidance of Preparer Penalties (Section 6694) .......... December, 2007 ......... pg. 24 2008-13… Stricter Standards for Avoidance of Preparer Penalties (Section 6694) .......... December, 2007 ......... pg. 24 2009-25… IRS Requests Comments in Response to IRS Notice ..................................... Year-End, 2009 .......... pg. 15 ....... NADA Comments in Response to IRS Notice 2009-25 ......................... Year-End, 2009 .......... pg. 24 2012-73 … Extension of Effective Date for 2012 Tangibles Regulations & Relief .......... Year-End, 2012 .......... pg. 3 ....... Two-Year Postponement of Effective Date ............................................ Year-End, 2012 .......... pg. 31 PUBLICATIONS 3204 … IRS Guidance on Automotive Manufacturers’ Incentive Payments to Salespersons ... March, 1999 ............... pg. 12 4230 … Auto Dealership Demonstrator Vehicles - Federal Income Tax Guidelines ......... December, 2003 ......... pg. 12 REVENUE PROCEDURES 94-49 … Section 263A Inventory Cost Capitalization Rules ............................................ December, 1994 ......... pg. 9 94-61 … LIFO Recapture Tax - Section 1363(d) - in C to S Conversions ........................ December, 1994 ......... pg. 22 94-74 … Adequate Disclosure in Tax Returns Avoids Penalties ....................................... December, 1994 ......... pg. 3 97-22 … Use of Electronic Storage Systems for Books & Records .................................. March, 2007 ............... pg. 34 97-27 … IRS Advance Consent Required CAMs … At A Glance ........................... PG .. March, 1998 ............... pg. 7 97-37 … At A Glance ................................................................................................ PG .. March, 1998 ............... pg. 8 97-37 … VSCs, Rev. Procs. 97-37 & 38, and the SWIM Method ...................................... September, 1997 ........ pg. 6 97-38 … How the SWIM Method Works .......................................................................... September, 1999 ........ pg. 12 97-38 … Checklist for VSC Issues & Problem Areas .............................................. PG .. September, 1999 ........ pg. 14 97-38 … VSCs, Rev. Procs. 97-37 & 38, and the SWIM Method ...................................... September, 1997 ........ pg. 6 97-44 … Auto Dealer LIFO Conformity Penalty Tax: Countdown to May 31, 1998 ...... March, 1998 ............... pg. 22 97-44 … Dealer’s LIFO Conformity Settlement - Problems & Unanswered Questions ... December, 1997 ......... pg. 28 NADA’s Dealer Guide to the LIFO Conformity Settlement ......................... December, 1997 ......... pg. 29 Suggestions for Dealing with Rev. Proc. 97-44 ............................................ December, 1997 ......... pg. 31 98-25 … Electronic Records Retention Requirements for Dealerships … Automotive Alert! ............................................................................................ March, 2005 ............... pg. 30 … Dealership Software Programs Must Save All Required Detail ......................... June, 2000 .................. pg. 2 .......................... December, 1998 ......... pg. 3 … Section-by-Section Analysis of Rev. Proc. 98-25 ............................................... March, 2007 ............... pg. 26 … Electronic Recordkeeping Requirements Update ................................................ June, 2007 .................. pg. 3 98-46 … Medium- & Heavy-Duty Truck Dealers Get Conformity Violation Relief ........ September, 1998 ........ pg. 25 At A Glance & Key Terms & Important Dates ..................................... PG .. September, 1998 ........ pg. 26

DEALER TAX WATCH


PAGE 68 IX. FINDING LISTS - IRS Documents & Publications (continued) REVENUE PROCEDURES (continued) 2000-34 … Gift Reporting Update ..................................................................................... December, 2000 ......... pg. 3 2001-23 … Used Vehicle LIFO … IRS Approves Simplified Method .............................. December, 2000 ......... pg. 2 2001-56 … New IRS Guidelines for Valuing the Use of Demonstrator Vehicles ............. December, 2001 ......... pg. 4 2001-56 … Pub. 4230, Auto Dealership Demonstrator Vehicles - Federal Income Tax Guidelines ..................................................................... December, 2003 ........ pg. 12 (A Complete List of Rev. Proc. 2001-56 Articles Appears under “Demonstrator Vehicles) 2002-9 … Accounting Method Changes & Cost Segregation Studies for Dealerships (Watch Out #4) .................................................................... June, 2002 .................. pg. 2 2002-17 … Use of Replacement Cost … R.P. 2002-17 Modified by Rev. Proc. 2006-14 (Watch Out #11)* .......................................................... December, 2005 ......... pg. 4 2002-19 … Accounting Method Changes & Cost Segregation Studies for Dealerships (Watch Out #4) .................................................................... June, 2002 .................. pg. 2 2002-35 … Recent Rev. Procs. on Tool Plans for Other Industries (Watch Out #6) ......... June, 2002 .................. pg. 3 2002-41 … Using Accountable Plans to Pay “Deemed Substantiated” Hourly Rates to Pipeline Rig Welders .................................................................................. June, 2005 .................. pg. 27 … Recent Rev. Procs. on Tool Plans for Other Industries (Watch Out #6) ......... June, 2002 .................. pg. 3 2005-9 … Deducting Prepaid Expenses under the “12-Month” Rule (Watch Out #12) .. March, 2005 ............... pg. 32 2006-14 … Heavy Equipment Dealers’ Use of Replacement Cost for Valuing Parts Inventories Gets Official Approval from the IRS (Watch Out #10) ...... December, 2005 ......... pg. 4 2006-14 … Use of Replacement Cost … Rev. Proc. 2002-17 Modified by Rev. Proc. 2006-14 (Watch Out #11)* .......................................................... December, 2005 ......... pg. 4 2008-52 … Revised Procedures for Securing Automatic Consent from the IRS to Make Changes in LIFO and Other Methods of Accounting ...................... Year-End, 2008 .......... pg. 14 Section-by-Section Analysis ...................................................................... Year-End, 2008 .......... pg. 24 Automatic CAMs Related to Inventories Other Than LIFO ...................... Year-End, 2008 .......... pg. 34 Automatic CAMs Related to LIFO Inventories ......................................... Year-End, 2008 .......... pg. 38 2010-44 … Section 263A - Safe Harbor Elections for Dealerships … IRS Automotive Alert (Jan. 2011) … “Rev. Proc. 2010-44 Provides Relief” . Mid-Year, 2011.......... pg. 38 Some Good News - Some Bad News ........................................................ Year-End, 2010 .......... pg. 22 Summary of RP 2010-44 Ramifications .................................................... Year-End, 2010 .......... pg. 23 Text of Revenue Procedure 2010-44 ......................................................... Year-End, 2010 .......... pg. 35 Template for Form 3115 Narrative Statement Disclosures ........................ Year-End, 2010 .......... pg. 40 2011-14 … IRS Updates Procedures for Automatic Changes in Accounting Methods ..... Mid-Year, 2011.......... pg. 9 2011-42 … Required Statistical Sampling Procedures....................................................... Year-End, 2012 .......... pg. … Procedures for Filing Forms 3115 for CAMs with Sec. 481(a) Adjustments* Year-End, 2012 .......... pg. 40 … Analysis of Rev. Proc. 2011-42 ...................................................................... Year-End, 2012 .......... pg. 60 2012-19 … CAMs Under 2012 Tangibles Regulations for Certain Expenditures ............. Year-End, 2012 .......... pg. 37 … Procedures for Filing Forms 3115 for CAMs with Sec. 481(a) Adjustments* Year-End, 2012 .......... pg. 40 … Selected CAMs More Generally Acceptable to Dealerships ........................... Year-End, 2012 .......... pg. 56 2012-20 … CAMs Under 2012 Tangibles Regulations Pertaining to General Asset Accounts MACRS Property & Leased Property .................. Year-End, 2012 .......... pg. 37 … The “Roof Replacement” Scenario … Dispositions of Building Components* ... Year-End, 2012 .......... pg. 38 … Use of “Reasonable” Methods to Determine Costs Allocated to Assets that Are Retired* .............................................................................. Year-End, 2012 .......... pg. 39 … Procedures for Filing Forms 3115 for CAMs with Sec. 481(a) Adjustments* Year-End, 2012 .......... pg. 40 … The “Roof Replacement” Scenario … Dispositions of Building Components* ... Year-End, 2012 .......... pg. 58

DEALER TAX WATCH


PAGE 69 IX. FINDING LISTS - IRS Documents & Publications (continued) REVENUE RULINGS 67-107 ...... IRS Concedes Used Car Write-Downs at Year-End to Industry Book Value ... September, 1999 ........ pg. 2 68-624 ...... Technician Tool Rental & Reimbursement Programs ...................................... June, 1999 .................. pg. 9 70-337 ...... IRS Rulings on Manufacturer Incentive Payments ........................................... December, 1998 ......... pg. 7 71-20 ...... Machine Sensible Tax Records ......................................................................... March, 2007 ............... pg. 33 75-337 ...... A Tax-Free Split-Off to Protect a 70-Year Old Dealer’s Franchise .................. September, 1998 ........ pg. 24 75-538 ..... Presumption that Motor Vehicles Are Held by Auto Dealers Primarily for Sale to Customers (and Not as “Property Used in the Trade or Business”) ................. September, 2005 ........ pg. 23 77-316 ..... Dealer Reinsurance Company Arrangements…Favorable Developments ....... June 2001 ................... pg. 2 81-205 ..... Machine Sensible Tax Records ........................................................................ March, 2007 ............... pg. 33 84-11 ...... Amending Prior Gift Tax Returns ..................................................................... June, 1997 .................. pg. 11 87-41 ...... Worker Classification: Employee vs. Independent Contractor Status ............. March, 1995 ............... pg. 20 2001-31 .... Dealer Reinsurance Company Arrangements…Favorable Developments ....... June, 2001 .................. pg. 2 2002-67 .... Used Car Dealer’s Not-So-Charitable Car Donation Arrangement Disallowed ..... March, 2003 ............... pg. 24 2004-1 ....... Mileage Allowance Payments to Delivery-Courier Employees under Sec. 62(c) ......June, 2005 .................. pg. 28 2003-18 .... Acquisition of a New Franchise Is an “Expansion” of Dealer’s Existing Business .. March, 2003 ............... pg. 10 2005-52 .... Technician Accountable Plans - Obviously Flawed Plans Take a Hit in New Rev. Rul... September, 2005 ........ pg. 11 Automotive Alert! January, 2006 .................................................................. March, 2006 ............... pg. 38 2006-38 .... Computation of First Tier (15%) Prohibited Transaction (Section 4975) Excise Tax When Withheld Contributions Are Not Timely Remitted .......... December, 2007 ......... pg. 32 2006-56 .... Section 62(c) Plans & Per Diems ...................................................................... December, 2007 ......... pg. 51 2007-37 .... Treatment of Payments Received by Dealerships for the Cancellation of Distributor Agreements ............................................................................. June, 2007 .................. pg. 13 2012-25 .... IRS Analysis of Four Accountable Plans Under Sec. 62(c) (Watch Out #13) ..... Year-End, 2012 .......... pg. 9 TREASURY DECISIONS 8324 … Explanation of Finalized Regulations under Section 62(c) - Dec. 17, 1990 ......... June, 2005 .................. pg. 19

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PAGE 70 IX. FINDING LISTS LEGISLATION The Tax Relief, Unemployment Reinsurance Reauthorization & Job Creation Act of 2010 .............................................................................................. Year-End, 2011 .......... pg. 9 The Small Business Jobs Act of 2010 ................................................................................ Year-End, 2010 .......... pg. 9 The Health Care Act (Health Care & Education Reconciliation Act of 2010) ................ Year-End, 2010 .......... pg. 7 Worker, Homeownership and Business Assistance Act of 2009 (WHBA) Tax Refunds May Be Larger Under Year-End Change in Tax Law (Watch Out #7) .... Year-End, 2009 .......... pg. 6 Consumer Assistance to Recycle and Save (CARS or “Cash-for-Clunkers”) Act of 2009 IRS Automotive Alert … Taxability of Payments to Dealerships (July 2009) ............... Year-End, 2009 .......... pg. 13 Tax Extenders & Alternative Minimum Tax Relief Act of 2008 Standard for Tax Return Preparer Penalties Is Relaxed - But, There’s More (Watch Out #10) ....... Year-End, 2008 .......... pg. 7 Small Business & Work Opportunity Act of 2007 … Amendments to Section 6694 Stricter Standards for Avoidance of Preparer Penalties Require More Due Diligence Notices 2008-11, -12, -13 .............................................................................................. December, 2007 ......... pg. 24 Energy Policy Act of 2005 IRS Automotive Alert! … Jan., 2006 - Alternative Motor Vehicle Credits … Notice 2006-9 ..March, 2006 ............... pg. 33 2005 AICPA Auto Dealership Conf. - IRS MVTA Update Comments ....................... December, 2005 ......... pg. 12 American Jobs Creation Act (AJCA) of 2004 Section 199 Update … Little Practical Benefit for Dealerships (Watch Out #10) ........ June, 2006 .................. pg. 3 2005 AICPA Auto Dealership Conf. - IRS MVTA Update Comments ....................... December, 2005 ......... pg. 12 At A Glance Summary … Domestic Production Activities Deduction (Sec. 199) PG ... December, 2005 ......... pg. 15 Oldsmobile Dealers’ Tax Relief Provisions Not Enacted ............................................. December, 2004 ......... pg. 3 Corporate Aircraft Expense Deduction Now Limited ................................................... December, 2004 ......... pg. 3 A Freebie for Dealers in the 3%-6%-9% Domestic Manufacturing Deduction? ........... December, 2004 ......... pg. 3 Pension Funding Equity Act of 2004 … New Tax Changes for PORCs .......................... September, 2004 ........ pg. 21 Jobs And Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) Planning Opportunities Using the Reduced Tax Rates for Qualified Dividend Income* ...... PG ... September, 2004 ........ pg. 8 2004 NADA Workshop Summary Report … JGTRRA Changes .................................. March, 2004 ............... pg. 4 Enhancing Client Relationships by Explaining Their Tax Savings from Reduced Tax Rates for Qualified Dividend Income … 5%-15% Preferential Rates under JGTRRA - A Practice Development Opportunity & 4 Case Studies ..... March, 2004 ............... pg. 19 W.J. De Filipps’ Seminar Outline … JGTRRA Rate Reductions & Other Changes...... September, 2003 ........ pg. 18 Job Creation & Worker Assistance Act of 2002 More on Tax Relief Afforded by the 9/11/2001 Legislation (Watch Out #2)* ............. June, 2002 .................. pg. 2 Recent Tax Relief May Require Amended Returns … Extended Carryback Period for Net Operating Losses ......................................................................................... March, 2002 ............... pg. 5 PENDING LEGISLATION Estate Tax Repeal & Alternative Measures Estate Tax Repeal for 2010 Means Headaches for Tax Return Preparers in 2011 ........ Year-End, 2010 .......... pg. 42 Estate Tax Repeal for 2010 & Uncertainty for Survivors & Practitioners (Watch Out #10) ... Mid-Year, 2010.......... pg. 5

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PAGE 71 X. OTHER RESOURCES & REFERENCES REFERENCE REVIEWS (Note: See Also Section VII: IRS Action, Audit Activity, Manuals & Audit Technique Guides)

NADA Dealer Guide to Federal Tax Issues NADA’s Dealer Guide to Federal Tax Issues .............................................................. December, 1994 ......... pg. 6 NADA Revises its Dealer Guide to Federal Tax Issues ............................................... September, 2006 ........ pg. 18

PPC PPC’s Guide to Dealerships, Fourth Edition (September, 1999) .................................. December, 1999 ......... pg. 2 PPC’s Specialized Industry Tax Guide, Chapter 8, Used Car Dealers’ Tax & Accounting Problems .................................................................................... December, 1999 ......... pg. 2

Other How to Start and Implement Your Own Finance Company … A “How To” Resource ........ June, 1999 .................. pg. 14 Money on the Table … A PORC Primer Resource ....................................................... March, 1996 ............... pg. 3 AICPA Auto Dealership Engagement Manual .............................................................. December, 1994 ......... pg. 7 BOOK REVIEWS Corporate Tax Audit Survival … A View of the IRS Through Insider Eyes by Cliff Jernigan....... September, 2005 ........ pg. 6 NEW SERVICES & RESOURCES Tax Issues … Resource for 2006 AICPA Auto Dealership Conf. Discussions (Watch Out #5) .......December, 2006 ......... pg. 6 BHPH Tax Issues … New Resource Available (Watch Out #5) * ..................................... June, 2006 .................. pg. 3 The Wheels of Justice .......................................................................................................... March, 2006 ............... pg. 30 Premium AdvantEdge ......................................................................................................... March, 2006 ............... pg. 32 Current Dealer-CPA Association Members ........................................................................ March, 2006 ............... pg. 17 Current Dealer-CPA Association Members (Watch Out #12) ............................................ June, 2006 .................. pg. 5 Tax Audit for Life … Could Save Your Life … If the Taxman Ever Knocks at Your Door* ... September, 2004 ........ pg. 3 New Services & Resources for Dealer Consultants ............................................................ June, 2000 .................. pg. 23 BIBLIOGRAPHIES & LISTS OF SUGGESTED REFERENCES Asset Acquisitions & Allocations of Price (Section 1060) ................................................. March, 1996 ............. pg. 22 Covenants Not to Compete: Goodwill & Certain Other Intangibles (Section 197) ........... March, 1996 ............. pg. 23 Dealer Reasonable Compensation (Section 162) ................................................................ June, 2002 ................ pg. 31 Limited Liability Companies (LLCs) ................................................................................. December, 1996 ....... pg. 31 Personal Holding Companies (Section 541) ....................................................................... June, 2002 ................ pg. 31 PORC(s) - Producer Owned Reinsurance Companies … Notice 2002-70 & General ........ December, 2002 ....... pg. 5 Revaluation of Prior Gifts (Section 2504(c)) ...................................................................... June, 1997 ................ pg. 17 S Corporation Changes Affected by 1996 Legislation........................................................ December, 1996 ....... pg. 31 Tax-Free Spin-Offs & Split-Offs for Dealerships Over 5 Years Old (Section 355) ........... September, 1998 ...... pg. 11 Tax Return Disclosures - Regulations, Reporting Requirements & Consequences of Engaging in Listed Transactions (Sections 6011, 6111 & 6112) ............................. December, 2002 ....... pg. 5 Unreasonable Accumulation of Earnings Penalty Tax (Section 531) ................................. June, 2002 ................ pg. 31 Worker Classification (Employee vs. Independent Contractor) ......................................... March, 1995 ............. pg. 24

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PAGE 72 X. OTHER RESOURCES & REFERENCES (continued) CONTRIBUTING AUTHORS Battersby, Mark E. … De Filipps 4th Annual CPA-Auto Dealership Niche Conference - Presentation Summaries Legal Issues Facing Auto Dealerships .......................................................................... September, 2001 ........ pg. 8 Valuing Dealerships in the Trenches ............................................................................. September, 2001 ........ pg. 10 What’s a Franchise Worth? ........................................................................................... September, 2001 ........ pg. 13 IRS Current Tax Hot Topics for Auto Dealers - IRS Perspective .................................. September, 2001 ........ pg. 15 Technology Trends in the Automobile Industry ............................................................. September, 2001 ........ pg. 21 Connolly, Joseph P. … How Dealerships Can Use REITs in Their Planning .................... September, 2004 ........ pg. 12 Dockins, Steve … A Second Check on Tool Reimbursement Accountable Plans ............... December, 2006 ......... pg. 22 Freeman, Anthony … Dealer Personal Insurance Cost Reduction (Watch Out #9) ........................................ December, 2006 ......... pg. 10 How to Reduce Dealers’ Premiums on Existing Life Insurance Policies ...................................March, 2005 ............... pg. 26 Mailho, John S. Notice 2002-70 … Background, Update & Conclusions About Abusive Tax Shelters .. December, 2002 ......... pg. 14 PORCs: More Attractive After TRA ‘97 ....................................................................... March, 1998 ............... pg. 16 Mopsick, Steven J. … IRS Unfairly Attacks the Tools Industry … Sec. 62(c) Tool Plans .....March, 2005 ............... pg. 4 Petrowski, Gregory L. … New 2011 Income Tax Return Disclosures for Certain Dealers to Report Foreign Financial Assets on Form 8938 ................ Year-End, 2011 .......... pg. 18 Shilson, Kenneth B., CPA … BHPH Dealers … Form 1099-C The Debt Discharge Reporting Dilemma .................. March, 2007 ............... pg. 7 10 Steps to Successful BHPH Operations ........................................................................... March, 2006 ............... pg. 48 New Financial Accounting Reporting Rules for BHPH Dealers ................................... December, 2004 ......... pg. 14 10 Ways BHPH Dealers Can Improve Collections ....................................................... December, 2004 ......... pg. 15 NABD (National Association of Buy-Here, Pay-Here Dealers) Comment Letter on Rev. Proc. 2002-22: Use of Cash Method by Used Car Dealers ... June, 2002 .................. pg. 4 Weill, Andrew & Craig Gordon … Favorable Rulings on Reinsurance Programs by the IRS … PORC Arrangements: TAMs 200453012 & -013 .................................................. March, 2005 ............... pg. 24 Woodruff, Kevin L., CPA … An Update on PORCs and Notice 2002-70 ......................... March, 2003 ............... pg. 3 Zarret, Scott … Cost Segregation Studies Can Directly Improve Cash Flow for Auto Dealers . September, 2006 ........ pg. 22

* NOTE: To facilitate key word/subject finding:

Certain articles marked (*) are included more than once in the detailed topic/subject listings. Articles relating to IRS Audit manuals, Guides, etc., and PRACTICE GUIDES (identified by PG) are included in the detailed topic/subject listings and in the above FINDING LISTS. (Rev. January, 2013) G:\Group\Word\DTW\DTWIndexofArticles.docx

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