Source: https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section471&num=0&edition=prelim
Timestamp: 2020-01-29 07:06:47
Document Index: 16078048

Matched Legal Cases: ['§ 471', '§471', '§1906', '§803', '§961', '§13102', '§961', '§961', '§238', '§6252']

[USC02] 26 USC 471: General rule for inventories
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26 USC 471: General rule for inventories Text contains those laws in effect on January 28, 2020
From Title 26-INTERNAL REVENUE CODESubtitle A-Income TaxesCHAPTER 1-NORMAL TAXES AND SURTAXESSubchapter E-Accounting Periods and Methods of AccountingPART II-METHODS OF ACCOUNTINGSubpart D-Inventories
§471. General rule for inventories
A method of determining inventories shall not be treated as failing to clearly reflect income solely because it utilizes estimates of inventory shrinkage that are confirmed by a physical count only after the last day of the taxable year if-
(1) the taxpayer normally does a physical count of inventories at each location on a regular and consistent basis, and
(c) Exemption for certain small businesses
In the case of any taxpayer (other than a tax shelter prohibited from using the cash receipts and disbursements method of accounting under section 448(a)(3)) which meets the gross receipts test of section 448(c) for any taxable year-
(A) subsection (a) shall not apply with respect to such taxpayer for such taxable year, and
(B) the taxpayer's method of accounting for inventory for such taxable year shall not be treated as failing to clearly reflect income if such method either-
(ii) conforms to such taxpayer's method of accounting reflected in an applicable financial statement of the taxpayer with respect to such taxable year or, if the taxpayer does not have any applicable financial statement with respect to such taxable year, the books and records of the taxpayer prepared in accordance with the taxpayer's accounting procedures.
(2) Applicable financial statement
For purposes of this subsection, the term "applicable financial statement" has the meaning given the term in section 451(b)(3).
(Aug. 16, 1954, ch. 736, 68A Stat. 159 ; Pub. L. 94–455, title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834 ; Pub. L. 99–514, title VIII, §803(b)(4), Oct. 22, 1986, 100 Stat. 2356 ; Pub. L. 105–34, title IX, §961(a), Aug. 5, 1997, 111 Stat. 891 ; Pub. L. 115–97, title I, §13102(c), Dec. 22, 2017, 131 Stat. 2103 .)
2017-Subsecs. (c), (d). Pub. L. 115–97 added subsec. (c) and redesignated former subsec. (c) as (d).
1997-Subsecs. (b), (c). Pub. L. 105–34 added subsec. (b) and redesignated former subsec. (b) as (c).
1986-Pub. L. 99–514 designated existing provisions as subsec. (a) and added subsec. (b).
Amendment by Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 13102(e) of Pub. L. 115–97, set out as a note under section 263A of this title.
Pub. L. 105–34, title IX, §961(b)(1), Aug. 5, 1997, 111 Stat. 891 , provided that: "The amendment made by this section [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [Aug. 5, 1997]."
Pub. L. 105–34, title IX, §961(b)(2), Aug. 5, 1997, 111 Stat. 891 , provided that: "In the case of any taxpayer permitted by this section [amending this section and enacting provisions set out as a note above] to change its method of accounting to a permissible method for any taxable year-
"(A) such changes shall be treated as initiated by the taxpayer,
"(B) such changes shall be treated as made with the consent of the Secretary of the Treasury, and
"(C) the period for taking into account the adjustments under section 481 [26 U.S.C. 481] by reason of such change shall be 4 years."
Pub. L. 97–34, title II, §238, Aug. 13, 1981, 95 Stat. 254 , directed Secretary of the Treasury to conduct a study of methods of tax accounting for inventory with a view towards development of simplified methods and to report to Congress, not later than Dec. 31, 1982, prior to repeal by Pub. L. 100–647, title VI, §6252(a)(2), Nov. 10, 1988, 102 Stat. 3752 .