Proposed Regulations Released on AFS Revenue Conformity Rule of §451(b)

The IRS has released proposed regulations on revenue conformity added by the Tax Cuts and Jobs Act at IRC §451(b). These regulations are available on the Federal Register’s website:

Taxable Year of Income Inclusion under an Accrual Method of Accounting

Some of the key issues found in these proposed regulations:

  • A discussion of the impact of ASC 606 revised revenue recognition standard for GAAP (referred to as “New Standards” in the proposed regulations) and the use of terminology similar to that found in ASC 606 in the regulations

  • The IRS declined to offer a deduction matching rule when revenue is accelerated

  • The IRS provides details on tax accounting methods to which these rules do not apply

A more detailed 16 page discussion of these regulations can be downloaded below:

Kaplan Financial Education: GAAP Meets Tax: Proposed Regulations for Revenue Conformity Under IRC §451(b)