Tax Reform Series 35 – Special Rules for Accrual-Method Taxpayers Based on Financial Accounting Treatment


Plain Language of Change:

  • Two special rules have been added on the proper time for including amounts in income by accrual-method taxpayers for years beginning after December 31, 2017

  • First rule, amounts are generally included in income no later than when the amounts are included for financial accounting purposes

  • Second rule allows taxpayers to elect to defer including certain advance payments in income until the tax year after the tax year in which the payments were received, subject to limitations

  • Applies for Companies with applicable financial statements. Applicable financial statements are those required by the SEC, audited, filed with a federal agency, filed with a foreign government agency or filed with any other regulatory or government agency specified by the IRS.

Detailed Analysis of Special Rules for Accrual-Method Taxpayers Based on Financial Accounting Treatment

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