Small-business taxpayers with average annual gross earnings of $25 million or less in the prior three-year period are now allowed to use the cash method of accounting, according to new guidance from the IRS.
The revenue procedure outlines how eligible small-business taxpayers can obtain automatic consent to change accounting methods now permitted under the Tax Cuts and Jobs Act.
In Section 13102, the tax reform law expanded the number of small-business taxpayers who can use the cash method, and exempted them from certain accounting rules for inventories, cost capitalization and long-term contracts.
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