The LB&I Division of the Internal Revenue Service has just added a new campaign to the list of issues on which LB&I will focus in its audits of companies selling merchandise and maintaining inventories. Find out what is behind the campaign, what benefits may derive from efforts to reclass section 162 and 163 expenses as cost of goods sold (CGS), what ground rules apply in determining the composition of CGS, whether taxpayers have the freedom to change the components of CGS, and what potential tax planning opportunities may be available, in our latest alert.