- 32 -
taxpayer cease to engage in the trade or business to which that
adjustment relates. As we discussed above, we find the
cessation-of-business acceleration provision a permissible
construction of the statute inasmuch as it fulfills the
congressional objective of coordinating section 448(a) and
section 481(a) in a reasonable manner. In our view, the presence
of a similar provision in Rev. Proc. 84-74 is not sufficient to
defeat its inclusion in the regulations.
The rules and requirements of Rev. Proc. 84-74 were detailed
and complex. The language of section 448(d)(7)(C) and of its
legislative history gives no indication that Congress even
focused on the cessation-of-business acceleration provision
contained in that revenue procedure. Moreover, the requirement
that the balance of a section 481(a) adjustment must be taken
into income when a taxpayer ceases to engage in the trade or
business to which the section 481(a) adjustment relates is not a
condition unique to Rev. Proc. 84-74. Indeed, commencing at
least from the early 1970's, a cessation-of-business acceleration
provision appears to have been included customarily as a
condition to consent to a spread of a section 481(a) adjustment
whenever the Commissioner issued a change in accounting method
ruling. See, e.g., Rev. Rul. 85-134, 1985-2 C.B. 160; Rev. Rul.
80-39, 1980-1 C.B. 112; Rev. Rul. 77-264, 1977-2 C.B. 187; Rev.
Rul. 70-318, 1970-1 C.B. 113; see also Rev. Proc. 85-8, 1985-1
C.B. 495 (procedure for accrual basis taxpayers to change method
Page: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 NextLast modified: May 25, 2011