The Internal Revenue Service announced a new Excel-based calculator to aid businesses on long‑term construction and manufacturing projects with look‑back interest calculations. The tool, called the Percentage‑of‑Completion Method (PCM) Look‑Back Interest Calculator, supports the computations required for Form 8697, Interest Computation Under the Look‑Back Method for Completed Long‑Term Contracts. It follows a three‑step process: reallocating income to previous years, determining tax over‑or under‑payments, and calculating interest on the resulting amounts. IRS officials noted the calculator does not guarantee compliance and should be used alongside authoritative guidance, such as IRC Section 460 and Treasury Regulation 1.460‑6. Tax professionals may submit feedback to the agency through email. Further instructions are available on IRS.gov.
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