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Final Regulations Under Section 451 Help Taxpayers Compute Revenue  

Author:  Don Reiris.; John Suttora.; Caleb Cordonnier.

Source: Volume 39, Number 02, Winter 2022 , pp.3-22(20)

Journal of Taxation of Investments

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The final revenue recognition regulations under Internal Revenue Code Section 451 (effective for tax years beginning on or after January 1, 2021, with early implementation options), along with the companion procedural guidance, provide both tax planning opportunities and implementation hurdles for taxpayers. The authors explain the new rules and note the issues taxpayers will need to address to determine how to properly apply the new rules to their particular situations, balancing potential tax benefits against administrative complexity.

Keywords: IRC Section 451, T.D. 9941, Rev. Proc. 2022-14, Treas. Reg. Sec. 1.451-3, revenue recognition, automatic method changes, ASC 606, advance payments

Affiliations:  1: Grant Thornton LLP; 2: Grant Thornton LLP; 3: Grant Thornton LLP.

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