Tax News Update    Email this document    Print this document  

December 21, 2020
2020-9060

BREAKING TAX NEWS | United States Treasury and the IRS release final regulations on income recognition under IRC Section 451

The Treasury Department and the IRS have released final regulations under IRC Section 451 (T.D. 9941). These final regulations interpret IRC Section 451 as amended by Public Law No. 115-97, which is known as the "Tax Cuts and Jobs Act." The final regulations are expected to be generally applicable for tax years beginning on or after the later of January 1, 2021, or the date the final regulations are published in the Federal Register. The final regulations include two packages: Treas. Reg. Section 1.451-3 under IRC Section 451(b) (Inclusion not later than for financial accounting purposes) and Treas. Reg. Section 1.451-8 under IRC Section 451(c) (Advance payments for goods, services, and certain other items).

Taxpayers may choose to apply the final regulations, in their entirety and in a consistent manner, to tax years beginning before the effective date or may continue to rely on the proposed regulations (REG-104554-18) for tax years beginning after December 31, 2017, and before the effective date of the final regulations.

The IRS and Treasury Department are expected to publish a Revenue Procedure to provide rules for taxpayers to comply with, and transition to, the final regulations. Tax Alerts on the final regulations and other guidance are forthcoming. An invitation to an upcoming webcast on the final regulations will be sent soon.

 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 1996 – 2024, Ernst & Young LLP

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

EY US Tax News Update Master Agreement | EY Privacy Statement