IRS is getting more than it asked for in comments submitted on the de minimis threshold in the tangible property regulations. 
 
Readers will recall that the current rules limit businesses without an "Applicable Financial Statement" (AFS, also known as an audited financial statement) to a current deduction of $500.  Items with a cost in excess of that amount must be capitalized. By contrast, business with an AFS may deduct items with a cost of up to $5,000.
 
Perhaps sensing this is an incredibly discriminatory and unfair position with respect to small businesses, the IRS asked for comments about the de minimis threshold in February in Rev. Proc. 2015-20, which also granted some small businesses relief from filing a Form 3115, Application for Change in Accounting Method, for tax year 2014.
 
NSA and other commenters pointed out that a majority of small businesses do not have audited financial statements due to cost and because they simply do not need them. Even banks have come to accept compiled or reviewed financial statements from small businesses for loan purposes. Furthermore, capitalizing items above a $500 threshold brings in cell phones, printers, and other common, every day supplies, significantly increasing complexity and cost for the specific market segment—small businesses—least likely to have the manpower necessary to implement the capitalization rules. 
 
The AICPA commented that the de minimis threshold should be increased to $2,500 for companies without an AFS and the amount should be adjusted annually for inflation. H&R Block, meanwhile, said the de minimis threshold should be $5,000 for all businesses, whether or not they have an AFS.
 
The IRS is trying to balance the administrative reporting requirements and relief for businesses of various sizes under the tangible property rules and Section 179 with the clear reflection of income concept.  However, it is widely expected to amend the regulations to raise the threshold and amend the definition of AFS.  Stay tuned.