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year of the change in method of accounting (year of change), there
shall be taken into account those adjustments that are determined
to be necessary solely by reason of the change in order to prevent
amounts from being duplicated or omitted.14
III. Discussion
A. Introduction
A notable feature of section 481 is that the adjustments
called for by the section may be made notwithstanding that the
period of limitations on assessment and collection of tax may have
closed on the years (closed years) in which the events giving rise
to the need for an adjustment occurred. See Superior Coach of
Fla., Inc. v. Commissioner, 80 T.C. 895, 912 (1983). While section
14 Sec. 481(a) provides:
SEC. 481. ADJUSTMENTS REQUIRED BY CHANGES IN METHOD OF
ACCOUNTING.
(a) General Rule.--In computing the taxpayer's
taxable income for any taxable year (referred to in
this section as the "year of the change")--
(1) if such computation is under a method of
accounting different from the method under which
the taxpayer's taxable income for the preceding
taxable year was computed, then
(2) there shall be taken into account those
adjustments which are determined to be necessary
solely by reason of the change in order to prevent
amounts from being duplicated or omitted, except
there shall not be taken into account any
adjustment in respect of any taxable year to which
this section does not apply unless the adjustment
is attributable to a change in the method of
accounting initiated by the taxpayer.
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