Pittsburgh Chapter boasts full agenda.

• Position: Chapter News

The Pittsburgh Chapter again prepared an ambitious schedule of meetings for the 2002-2003 program year. Through the end of January, half of the eighteen scheduled meetings had been held, consisting of six luncheon meetings, two evening meetings, and one full-day seminar. This report describes the first nine meetings of the Pittsburgh Chapter's current program year.

Lynn Bacon of Alcoa Inc. moderated for the Chapter's first luncheon meeting of the 2002-2003 season. The program topic was Federal Audit Issues/Update. Among the subjects discussed by the group were LMSB reorganization; CEO's signature on corporate tax returns; IRS treatment of merger/acquisition fees; employment tax issues; capitalization of repairs; FSC and TxT/grouping methodology; substantiation of FTC; qualified R&D; capitalized interest; IRS interest computations; CSX Case--FICA/FUTA claims; Competent Authority experiences; Experiences with Joint Committee cases; and TEFRA partnership election.

The September evening meeting featured Les Schneider of Ivins, Phillips & Barker who discussed Current Developments in Tax Accounting and Inventories. Les first reviewed what constitutes an accounting method change in light of recent cases and IRS guidance and then discussed Rev. Proc. 2002-9, which addresses various automatic consent procedures. He illustrated how an automatic consent procedure can be used to permit a taxpayer to decide to make a change after a taxable year is over, provided that a Form 3115 is filed with that prior year's return. Les next covered Rev. Proc. 2002-18, which applies to changes in methods of accounting that are initiated by the IRS on audit. After discussing numerous planning opportunities, Les talked about UNICAP and how taxpayers (in particular manufacturers who use the simplified production method) can often produce a favorable section 481(a) adjustment by changing their UNICAP method to the facts-and-circumstances method. This is because the simplified production method often overcosts the inventory by assuming that every section 263A cost is incurred ratably throughout the process on both raw materials and work-in-process, as well as finished goods. Les concluded his presentation by discussing the pros and cons of the IPIC method of accounting (i.e., simplified LIFO) that many taxpayers are considering in light of the 2002 IPIC final regulations. The final IPIC regulations became more attractive since these regulations permit the LIFO inflationary...