Inventory Price Index Computation (IPIC) LIFO
We provide in-house LIFO calculations and consulting for all industries utilizing the Inventory Price Index Computation (IPIC) LIFO method. The IPIC Method utilizes U.S. Bureau of Labor and Statistics data:
- Consumer Price Indexes (CPI)
- Producer Price Indexes (PPI)
Why Choose the IPIC LIFO Method?
- Newly revised IRS IPIC regulations allow 100% of the index to be utilized
- Taxpayers may select an “appropriate” month
- Taxpayers may “model” the computation to provide the most benefit possible (within some parameters)
- A taxpayer may choose an appropriate month that is prior to fiscal year end, allowing them to quickly perform LIFO calculations shortly after year end
- Allows for accurate estimates – Taxpayers know in advance if an IPIC election is beneficial
- Fewer pools may be required – The fewer pools, the better the tax benefit
- Audit protection
- Provides option of “grouping” and “weighting” inventory categories which could result in greater benefit
- Utilizes domestic indexes that are based on measures of domestic price fluctuations which often exceed those realized by companies with purchasing power
IPIC Consulting and Annual Service Offerings
- Form 3115 preparation
- Fast, accurate estimates
- Computation “modeling” (Determine if beneficial to utilize 10% grouping and weighting rules)
- In accordance with the regulations, review and make any necessary changes to the inventory pools
Benefits of Utilizing Our IPIC Services
- Time investment for LIFO tax computations is reduced to almost nothing
- We perform all of the “modeling” and are able to provide the final computation within days of receiving the data
- We defend our computations and procedures in the event of an IRS audit
- Consistency
- Simplicity