The IRS Updated Automatic Accounting Method Change Procedures.
On August 12, 2021, the IRS issued a 70-page Revenue Procedure (Rev. Proc. 2021-34) that modifies and amplifies Rev. Proc. 2019-43 to provide procedures to obtain automatic consent of the Commissioner to change methods of accounting to comply with:
- Rules relating to the taxable year of inclusion in gross income under IRC Section 451(b);
- Rules relating to the use of the deferral method for advance payments under IRC Section 451(c);
- Rules clarifying that an item of income that is subject to the timing rules under IRC Section 451(b), such as specified credit card fees, is not taken into account in determining the amount of original issue discount (OID) on a debt instrument.
These rules are generally applicable for taxable years beginning on or after January 1, 2021.
For more insights, please review Mathieu Aimlon’s article in the March 2022 issue of the TaxStringer, the e-tax publication of the New York State Society of Certified Public Accountants (NYSSCPA). The TaxStringer contains original, technical articles and commentaries on several tax topics written by experts in their field or noteworthy specialists in tax.
The NYSSCPA is a 125-year-old institution that serves as an advocate and resource for Certified Public Accountants. It has more than 21,000 members including CPAs, lawyers, bankers, and other professionals from associated industries.