Definition: In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Input: SECTION 1. CLARIFICATION OF CASH ACCOUNTING RULES FOR SMALL BUSINESS.

(a) Cash Accounting Permitted.--
(1) In general.--Section 446 of the Internal Revenue Code
of 1986 (relating to general rule for methods of accounting) is
amended by adding at the end the following new subsection:
''(g) Certain Small Business Taxpayers Permitted to Use Cash
Accounting Method Without Limitation.--
''(1) In general.--An eligible taxpayer shall not be
required to use an accrual method of accounting for any taxable
year.
''(2) Eligible taxpayer.--For purposes of this subsection,
a taxpayer is an eligible taxpayer with respect to any taxable
year if--
''(A) for all prior taxable years beginning after
December 31, 2006, the taxpayer (or any predecessor)
met the gross receipts test of section 448(c), and
''(B) the taxpayer is not subject to section 447 or
448.''.
(2) Expansion of gross receipts test.--
(A) In general.--Paragraph (3) of section 448(b) of
such Code (relating to entities with gross receipts of
not more than $5,000,000) is amended by striking
''$5,000,000'' in the text and in the heading and
inserting ''$10,000,000''.
(B) Conforming amendments.--Section 448(c) of such
Code is amended--
(i) by striking ''$5,000,000'' each place
it appears in the text and in the heading of
paragraph (1) and inserting ''$10,000,000'',
and
(ii) by adding at the end the following new
paragraph:
''(4) Inflation adjustment.--In the case of any taxable
year beginning in a calendar year after 2007, the dollar amount
contained in subsection (b)(3) and paragraph (1) of this
subsection shall be increased by an amount equal to--
''(A) such dollar amount, multiplied by
''(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, by substituting 'calendar year
2006' for 'calendar year 1992' in subparagraph (B)
thereof.
If any amount as adjusted under this subparagraph is
not a multiple of $100,000, such amount shall be
rounded to the nearest multiple of $100,000.''.
(b) Clarification of Inventory Rules for Small Business.--
(1) In general.--Section 471 of the Internal Revenue Code
of 1986 (relating to general rule for inventories) is amended
by redesignating subsection (c) as subsection (d) and by
inserting after subsection (b) the following new subsection:
''(c) Small Business Taxpayers Not Required to Use Inventories.--
''(1) In general.--A qualified taxpayer shall not be
required to use inventories under this section for a taxable
year.
''(2) Treatment of taxpayers not using inventories.--If a
qualified taxpayer does not use inventories with respect to any
property for any taxable year beginning after December 31,
2006, such property shall be treated as a material or supply
which is not incidental.
''(3) Qualified taxpayer.--For purposes of this subsection,
the term 'qualified taxpayer' means--
''(A) any eligible taxpayer (as defined in section
446(g)(2)), and
''(B) any taxpayer described in section
448(b)(3).''.
(2) Conforming amendments.--
(A) Subpart D of part II of subchapter E of chapter
1 of such Code is amended by striking section 474.
(B) The table of sections for subpart D of part II
of subchapter E of chapter 1 of such Code is amended by
striking the item relating to section 474.
(c) Effective Date and Special Rules.--
(1) In general.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2006.
(2) Change in method of accounting.--In the case of any
taxpayer changing the taxpayer's method of accounting for any
taxable year under the amendments made by this section--
(A) such change shall be treated as initiated by
the taxpayer;
(B) such change shall be treated as made with the
consent of the Secretary of the Treasury; and
(C) the net amount of the adjustments required to
be taken into account by the taxpayer under section 481
of the Internal Revenue Code of 1986 shall be taken
into account over a period (not greater than 4 taxable
years) beginning with such taxable year.
Output:
Amends the Internal Revenue Code to exempt certain small business taxpayers from the requirements of using the accrual method of accounting and of using inventories. Allows such taxpayers to use a cash method of accounting if they meet the gross receipts test and are not engaged in farming as a corporation. Increases the amount of the gross receipts test to $10 million (currently, $5 million) and permits an annual inflation adjustment of that amount.