Can You See It Now? Section 451 Guidance Provides Additional Clarity for Accrual Method Taxpayers

The final I.R.C. Section 451 regulations issued in December 2020 address the timing of income recognition for accrual basis taxpayers. 86 Fed. Reg. 810 (Jan. 6. 2021). In August 2021, the IRS and Treasury issued two new revenue procedures to help clarify these final regulations. New Revenue Procedure 2021-34 basically expands the number of changes in methods of accounting to which the automatic consent procedures apply. Revenue Procedure 2021-35 modifies prior revenue procedures to reflect the changes that the Tax Cuts and Jobs Act of 2017 made to the accounting treatment of certain credit card fees under I.R.C. Section 451(b).

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• Final Section 451 Regulations Provide Additional Clarity and Limited Relief for Accrual Method Taxpayers
  See how the final regulations supersede proposed guidance issued in September 2019 and provide taxpayers with additional clarity and limited relief related to the acceleration of income and corresponding cost offset, as well as addressing key interactions with ASC 606 (the new revenue recognition standard for financial reporting purposes). See 84 Fed. Reg. 47,191 (Nov. 8, 2019); 86 Fed. Reg. 810 (Jan. 6. 2021)

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