Notice 2007-44

This notice informs taxpayers that the Internal Revenue Service will no longer publish the Department Store Inventory Price Indexes prepared by the United States Bureau of Labor Statistics (BLS) in the Internal Revenue Bulletin but will continue to accept the BLS Department Store Inventory Price Indexes for use by department stores employing the last-in, first-out (LIFO) inventory identification method in conjunction with the retail method of valuing inventories.

The BLS prepares and publishes monthly Department Store Inventory Price Indexes, designed to measure changes in the retail prices for merchandise carried by department stores. The indexes are determined on a national basis and include 23 major groups of departments, three special combinations of those major groups, and store totals. Each month, the Service reproduces the BLS Department Store Inventory Price Indexes and accepts those indexes in accordance with § 1.472-1(k) of the Income Tax Regulations and Rev. Proc. 86-46, 1986-2 C.B. 739, for use by department stores employing the LIFO inventory identification method in conjunction with the retail method of valuing inventories, in a revenue ruling published in the Internal Revenue Bulletin.

The Internal Revenue Service will discontinue republishing the BLS Department Store Inventory Price Indexes in the Internal Revenue Bulletin after the publication of the March 2007 indexes in Rev. Rul. 2007-34, this Bulletin. Although the BLS Department Store Inventory Price Indexes will no longer be published in the Internal Revenue Bulletin, the monthly indexes that are applicable to the goods in question will continue to be accepted by the Service under § 1.472-1(k) and Rev. Proc. 86-46, for appropriate application to inventories of department stores employing the retail and LIFO inventory methods in valuing inventories for tax years ended with, or with reference to, the last day of the applicable month.

The most current monthly BLS Department Store Inventory Price Indexes are available on the BLS website at the Consumer Price Indexes (CPI) page at www.bls.gov/cpi, in the “Tables Created by BLS” section under “Tables and publications containing Consumer Price Indexes” at “Department Store Inventory Price Indexes *** (PDF).” The BLS Department Store Inventory Price Indexes for prior months are also available on the BLS website at the CPI page (www.bls.gov/cpi) in the “Get Detailed CPI Statistics” section under “Create Customized Tables (one screen)” at “Department Store Inventory Price Index.” In addition, directions and links to the BLS Department Store Inventory Price Indexes on the BLS website are available on the Internal Revenue Service website at www.irs.gov, in the “Tax Professionals” section, under “Resources for Tax Pro” and “Tax Law Issues, Nibbles and Bytes,” at “BLS Department Store Inventory Price Indexes.”

Rev. Proc. 86-46 is modified.

The principal author of this notice is John Roman Faron of the Office of Assistant Chief Counsel (Income Tax and Accounting). For further information regarding this notice, contact Mr. Faron at (202) 622-4930 (not a toll-free call).