IRS to Review IRC Sec. 199 Deductions by TV Broadcasters and Program Distributors

The IRS Large Business and International division (LB&I) is rolling out a series of campaigns focused on specific compliance issues. The division analyzed extensive data as well as suggestions from IRS compliance employees and the tax community to improve large business compliance activities.

Multi-channel Video Programing Distributors (MVPDs) and TV Broadcasters often claim that "groups" of channels or programs are a qualified film eligible for the IRC Section 199 deduction. Taxpayers are asserting that they are the producers of a qualified film when distributing channels and subscriptions packages that often include third-party produced content. Additionally, MVPD taxpayers maintain that they provide online access to computer software for the customers' direct use (incident to taxpayers' transmission activities, including customers' use of the set-top boxes).

LB&I has developed a strategy to identify taxpayers impacted by these issues and will develop training to aid revenue agents in examining them.

For more information on this and other IRS LB&I compliance campaigns, click here: https://www.irs.gov/businesses/large-business-and-international-launches-compliance-campaigns

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