Taxpayers may get automatic consent from the IRS to change their tax accounting methods to follow final regulations relating to simpler methods for small businesses, under new guidance issued Dec. 16.
The final regulations, issued in early 2021 using changes under the Tax Cuts and Jobs Act, generally exempt from more complex requirements businesses with average annual gross recipes of no more than $25 million. The final regulations apply to tax years beginning on or after Jan. 5, 2021.
Small-business taxpayers can find the IRS’ simpler tax accounting methods in Secs. 263A, 448, 460 and 471, effective for tax years starting after Dec. 31, 2017.
Aside from automatic changes to apply small-business taxpayer exemption methods, the final regulations include several other procedures. See them here.