Timber Casualty Loss Audit Techniques Guide
Publication Date: April 2011
NOTE: This guide is current through the publication date. Since changes may have occurred after the publication date that would affect the accuracy of this document, no guarantees are made concerning the technical accuracy after the publication date.
This material was designed specifically for training purposes only. Under no circumstances should the contents be used or cited as sustaining a technical position.
Table Of Contents
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1. Introduction
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2. Determining Audit Scope and Depth
- Pre-Audit Analysis: Return Review
- Materiality Considerations
- Referrals to IRS Foresters
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3. Identification of Property Unit
- Single Identifiable Property (SIP) In General--
- Accounting Records
- Geographic Boundaries
- Determine Single Identifiable Property used to compute casualty loss
- Consequences associated with the Single Identifiable Property (SIP)
- Notice 2006-47 - Qualified Timber Property
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4. Basis Verification of Single Identifiable Property (SIP) used to compute casualty loss
- Audit of Form T
- Accounting Records
- Retroactive Basis Determinations
- Examination Issues
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5. Verification of "Volume Loss"
- Introduction
- Field Sampling Techniques
- Corporate Inventory Systems
- Harvest Records
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6. Diminution of Fair Market Value (FMV): Verification
- Requirement to Value Single Identifiable Property (SIP) Before and After Loss
- Accepted Appraisal Techniques
- Sales Comparison
- Cost Approach
- Income Capitalization Approach
- Performing an appraisal review
- Nonconforming Valuation Methods
- Accepted Appraisal Techniques
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7. Computations
- Loss Computation
- Reconciliation of Form T
- Adjusting Remaining Basis
- Form T - Examples
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8. References
- Initial IDR
- Timber Terminology Relating to Casualty Losses
- IRS Foresters Contact Information
- Reference Material
- Section 165 Regulations
- Section 611 Regulations
- Notice 2006-47: