Final regulations released to Federal Register: Simplified accounting for small businesses, long-term contracts

Final regulations released to Federal Register

The U.S. Treasury Department and IRS today released for publication in the Federal Register final regulations (T.D. 9942) as guidance implementing changes to sections 263A, 448, 460, and 471 as made by the 2017 tax law (Pub. L. No. 115-97) or the law that is often referred to as the “Tax Cuts and Jobs Act” (TCJA).

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The final regulations [PDF 342 KB] (25 pages as published in the Federal Register on January 5, 2021) include guidance implementing the following changes made by the 2017 tax law:

  • Simplifying the application of tax accounting provisions for certain businesses having average annual gross receipts not exceeding $25 million (adjusted for inflation)
  • Certain special accounting rules for long-term contracts under section 460 for corporate taxpayers

These final regulations will be published in the Federal Register on January 5, 2021.

The IRS on December 23, 2020, posted a version of these final regulations on its website, and that version includes the following statement:

This document has been submitted to the Office of the Federal Register (OFR) for publication and will be pending placement on public display at the OFR and publication in the Federal Register. The version of the final rule released today may vary slightly from the published document if minor editorial changes are made during the OFR review process. The document published in the Federal Register will be the official document.

Read a computer-generated document [PDF 870 KB] that provides a comparison of the version of the final regulations submitted today for publication in the Federal Register against the version posted by the IRS on December 23, 2020. This unofficial document was produced by KPMG for the purpose of showing what changes, if any, were made to the regulations prior to being released to the Federal Register for publication. It has not been reviewed for accuracy.

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

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