Internal Revenue Service Proposes Amendments to Small Business Taxpayer Exceptions Under Sections 263A, 448, 460, and 471 Pursuant to TCJA

On August 5, 2020, the Internal Revenue Service (IRS) published a notice of proposed rulemaking titled Small Business Taxpayer Exceptions Under Sections 263A, 448, 460 and 471. The proposed rule implements legislative changes pursuant to the Tax Cuts and Jobs Act (TCJA). The TCJA simplified the application of the tax accounting provisions under Internal Revenue Code sections 263A, 448, 460, and 471 for certain small business taxpayers with gross receipts under $25 million, adjusted for inflation. The proposed rule also contains certain special accounting rules for long-term contracts under section 460.  

The proposed rule includes an Initial Regulatory Flexibility Analysis (IRFA) for public comment. Specifically, the agency requests comments on the number of small entities affected and the economic impact the proposed rule will have on those small entities.

The comment period closes on September 14, 2020. The IRS strongly encourages that public comments be submitted electronically. The agency expects to have limited personnel available to process public comments submitted on paper and any such comments will be considered to the extent practicable. A public hearing will be scheduled if requested in writing by any person who timely submits electronic or written comments. Per IRS Announcement 2020-4, 2020-17 I.R.B. 667 (April 20, 2020), all IRS public hearings will be held telephonically until further notice.

  • Review the proposed rule or submit comments here.
  • Advocacy Contact: Charles Jeane at (202) 205-7168.