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ASCSP Releases Industry's First Technical Standards for Cost Segregation Studies
10/23/2009
Washington, D.C. – The American Society of Cost Segregation Professionals (ASCSP) has issued the industry’s first-ever Technical Standards for the preparation of cost segregation studies. This guideline, entitled Minimum Quality Standards for Cost Segregation Studies (MQS 2009-01), has been developed by ASCSP members with more than 100 years of combined cost segregation experience. These members collaborated for two years to develop the Standards, which are closely aligned with the IRS Audit Techniques Guide for Cost Segregation.
“ASCSP is very excited to release the first version of the ASCSP Technical Standards, which we believe will elevate the profession to a higher level within industry practice," said Kurt Heinrich, president of the ASCSP. “The Standards raise the bar for cost segregation studies and develops a framework that allows a quality study to stand on its own merits. The Standards also address the many ways in which an untrained practitioner can knowingly or unknowingly misrepresent unfavorable attributes and/or embellish items that will illegitimately increase benefits to real estate owners. By identifying these potential shortfalls, we hope to help commercial real estate owners, accountants, and taxing authorities have confidence in the quality of reports prepared by ASCSP members.”
Cost segregation – the identification, quantification, and proper supportable classification of costs associated with new or existing buildings for income tax purposes – is one of the most valuable tax strategies available to owners of income-producing and business-related real estate. By properly classifying the maximum amount of costs to shorter depreciable lives, depreciation is accelerated, thereby deferring tax payments and increasing cash flow.
The ASCSP Technical Standards identify the components of critical elements that must be developed and presented in a quality cost segregation study in order to satisfy Internal Revenue Service guidelines. In developing the benchmark Standards for the ASCSP, members worked closely to identify the issues associated with the performance of cost segregation studies with the goal of increasing the likelihood that a study prepared according to the Standards will pass an IRS examination. In the coming year, the ASCSP Technical Standards Committee will recruit new members and solicit industry feedback to update the current version, and to include new content that will address the temporary regulations of various taxing authorities.
Prior to the formation of the ASCSP in 2006 and the release of the new Technical Standards, the cost segregation industry had no professional certification or reporting standards. In addition to the Technical Standards, the ASCSP has also instituted a rigorous certification program that enables cost segregation practitioners to earn the Certified Cost Segregation Professional (CCSP) designation, based on testing and years of cost segregation industry experience.
The new Technical Standards will be a highlight of the 2nd Annual ASCSP Conference, to be held on October 22-23, 2009 at the Mirage Las Vegas in Las Vegas, Nevada. Other Conference sessions will address the Open-Air Parking Structure Coordinated Issue Paper and a mock IRS Audit Examination, as well as training, education, and ethics within the cost segregation industry. Mark D. Ramos, IRS Lead General Engineer, will be the Conference guest speaker.