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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Preparer

Date & Time
  • event Date

    Tuesday, December 8, 2020

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    110 minutes

Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$197.00
CPE
ALL

This course will cover the proposed regulations issued in July 2020, addressing the simplified tax accounting rules for taxpayers having gross revenues under $26 million (indexed annually for inflation). The panel will discuss adopting the simplified methods related to the use of the cash method, the exception of applying the UNICAP rules, the inventory exception for nonincidental materials and supplies, changing accounting methods when the threshold is exceeded, and the implications to long-term contract measurement.

Faculty

David Strong
Partner
Crowe LLP

Mr. Strong is a leader in the delivery of tax accounting services related to inventory valuation, accounting method issues, tax controversy, and corporate planning and consultation. He has more than 20 years of experience and specializes in monitoring legislative and regulatory changes for communication to firm management. Mr. Strong has also worked extensively with both publicly traded and privately held companies providing tax compliance and consulting services.

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Michael D. Resnick
Attorney
Eversheds Sutherland (US) LLP.

Mr. Resnick focuses his practice on federal taxation matters, including tax accounting methods and compliance, planning, and controversy issues. He regularly counsels clients on the proper tax treatment of costs associated with tangible property, intangible property and corporate transaction costs. He also counsels on tax restructurings and the regulation and taxation of tax-exempt organizations.

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Description

The Tax Cut and Jobs Act of 2017 raised the cap on gross receipts to $25 million (indexed annually for inflation), averaged out over the three prior years of operation in determining if a taxpayer meets the definition of a small business. If an entity qualifies, it can claim small business treatment, which allows the taxpayer to use the cash method of accounting rather than the accrual method.

In addition to being able to use cash-basis accounting, these small business taxpayers qualify for exemption from the 263A and UNICAP reporting. Many of these taxpayers may also be eligible for exemption from using the percentage-complete method for long-term contracts prescribed by Section 460(e). These changes are meant to reduce the tax compliance burden on small business taxpayers.

However, as before, businesses defined as tax shelters may not adopt a simplified method of accounting, and many companies that would otherwise qualify may not change to the cash method of accounting. Tax advisers must verify that the taxpayer does not fall under Section 448 definition of tax shelter before switching to a cash method of accounting.

Although they are proposed regulations, they can be adopted for tax years beginning after Dec. 31, 2017.

Listen as our experienced panel provides a practical guide to the changes in the small business taxpayer threshold for purposes of adopting simplified accounting methods as well as how to apply for an automatic accounting method change in the year a business exceeds the threshold.

Outline

  1. Prior Section 448 provisions
  2. 2017 tax law changes to small business treatment
    • Increased gross receipts thresholds and calculations
    • Cash method of accounting eligibility
    • Simplified inventory reporting
    • Changes to 263A capitalization requirements
    • Elections on long-term construction contract accounting treatment for tax purposes
  3. Proposed regulations issued July 2020
  4. Tax shelter definition and other provisions impacting eligibility for simplified accounting method change
  5. Making the election, including retroactive provisions
  6. Handling previously eligible businesses which exceed the threshold

Benefits

The panel will review these and other relevant issues:

  • Changes to inventory accounting and reporting for eligible small businesses
  • Which businesses may not qualify as small business taxpayers under Section 448 even if they meet the gross receipts test
  • Automatic accounting method changes when a previously eligible business exceeds the threshold
  • Details of long-term contract accounting treatment under the simplified method
 

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Identify which businesses may now qualify as "small business taxpayers" under Section 448 for purposes of adopting cash method of accounting
  • Discern the impact of the changes to long-term contract accounting made by the 2017 law and subsequent IRS guidance
  • Determine whether a business that meets the gross receipts test is ineligible for Section 448 small business taxpayer treatment due to tax shelter characteristics
  • Ascertain when a previously eligible taxpayer may be ineligible

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years+ corporate or firm accounting experience at a mid-level preparing complex tax forms and schedules. Supervising other preparers/accountants. Knowledge and understanding of accounting methods and the filing requirements for Form 3115, Change in Accounting Method. Some familiarity with the 2015 repair regulations, Form 3115 calculations, IRC 481 adjustments, safe harbors and required accounting method changes.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).