Sometimes I will occassionally get a question from a building owner and/or investor as to whether or not cost segregation is a legitimate tax strategy. I will let them know it’s been law for well over 20 years now and in fact the IRS publishes a guide for its auditors to evaluate cost segregation. The IRS just published a new cost segregation audit technique guide. It had been many years since the last one was published. It’s 268 pages in case you’re interested in reading it :).

From the IRS document…

This Audit Techniques Guide (ATG) has been developed to assist Internal Revenue Service (Service) examiners in the review and examination of cost segregation studies. The primary goals are to provide examiners with an understanding of:


• Why cost segregation studies are performed for Federal income tax purposes;
• How cost segregation studies are prepared;
• What to look for in the review and examination of these studies; and,
• When certain issues identified in the cost segregation study need further
examination.

The ATG was originally developed by a cross-functional team of Service Engineers and Revenue Agents. It was updated by members of the DCE PN and is not intended as an official IRS pronouncement. Accordingly, it may not be cited as authority.

So if you wonder if you should hire a reputable and trusted firm for cost segregation for your building / investments, just realize the IRS has published a 268 page guide for its auditors to examine the accuracy of your cost segregation study.

If you’d like to talk to a firm with a long history of successfully completing these studies for building owners and investors, please don’t hesitate to reach out to me, John Murphy, CSSI at 864-276-1448.