Sometimes patience and perseverance pays off. Over eight years ago my client, the Automotive Parts Rebuilders Association (APRA), learned that the Internal Revenue Service had issued new internal guidelines directing how rebuilders must value their core inventories for tax purposes. Of particular concern to the industry was the way IRS wanted a rebuilder to value the cores returned by his customer.
With no real input from the industry, the IRS determined that the only proper inventory value for these cores was the credit given to the customer when the core was returned. This valuation conflicted with the historic practice in the industry which generally valued customer cores at core supplier price or less. APRA recognized that if the new IRS policy was implemented and core inventories had to be written up, many rebuilders would have sizeable phantom income on which they would be taxed.
To avoid this potentially devastating result, APRA undertook extensive efforts to convince IRS that its position was erroneous and should be changed. It was supported in these efforts by the Engine Rebuilders Association (AERA) and the Production Engine Remanufacturers Association (PERA). APRA