Recognizing Accounting Method Changes & Effects (Completed)

Date: Monday, December 9, 2019
Instructor: Jennifer Kowal
Begin Time:  9:00am Pacific Time
10:00am Mountain Time
11:00am Central Time
12:00pm Eastern Time
CPE Credit:  2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC

Accounting methods are not just the cash method and the accrual method. The IRS defines a method of accounting as the treatment of any material item that does not permanently affect lifetime income. Under this broad definition, many changes in tax treatment are classified as changes in accounting method, and require following procedures for obtaining permission for such a change. Additionally, the IRS has extensive ability to make "adjustments" to income under I.R.C. section 481 when a taxpayer has used an incorrect accounting method, not subject to any statute of limitation.

This course will explain, with realistic example cases, what qualifies as a change in accounting method, the procedures that taxpayers must follow to obtain permission for a change in accounting method, and the rules relating to adjustments under IRC Section 481.

Who Should Attend
Tax practitioners at all levels who provide advice and return preparation on tax timing issues or the proper year of inclusion of items of income and expenses.

Topics Covered

  • Definition of accounting method
  • Rules for when changes in accounting method are permitted
  • How to make Section 481 adjustments to account for accounting method changes
  • Change in accounting method vs. error correction
  • Distinguish between an error correction allowing tax return amendment vs. change in accounting method
  • Definition of change in accounting method and mechanics of implementing an accounting method change

Learning Objectives

  • Distinguish between an error correction allowing tax return amendment vs. change in accounting method
  • Identify the definition of change in accounting method and mechanics of implementing an accounting method change

Level
Intermediate

Instructional Method
Group: Internet-based

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
A basic understanding of accounting methods, including cash and accrual.

Advance Preparation
None

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