LIFO Repeal Again Proposed

The Obama administration has proposed eliminating the LIFO
reporting method used by many jewelers, reports
say
.

Repeal of the accounting method has been on the table during
the administration’s negotiations with Republicans over the debt ceiling,
according to The New York Times, which said that government officials feel its repeal could raise billions in revenue. 

LIFO stands for the “last in, first out” reporting method. It is commonly used by jewelers and other dealers in high-value
inventory, as it allows them to record the sale of their most expensive
inventory first, thereby reducing taxes.

Jewelers of
America has called any repeal of LIFO
“a potentially fatal blow” to
companies employing the method. JA recently sent out an action
alert
that gives jewelers a way to contact members of Congress about the
issue.

“Not only would LIFO repeal hurt my own and my colleagues’
businesses directly, it would be a disaster from which many businesses would
not recover,” the alert said. “LIFO is a well-accepted and long-standing method
of accounting for inventory used by hundreds of thousands of businesses of all
sizes to track their costs and accurately measure their income for tax and
financial reporting purposes.”