Analysis of New IRS Tax Accounting Rules

On September 5, 2019, the US Internal Revenue Service (the “IRS”) released two separate, but related, sets of proposed regulations. One set addresses tax accounting for advance payments, and the other addresses accelerated tax income recognition when a taxpayer recognizes income on an applicable financial statement (an “AFS”) prior to the time it recognizes such income under normal accrual method accounting. The Tax Cuts and Jobs Act amended the US tax code to include both of these rules for tax years beginning after 2017. 

The attached Mayer Brown Legal Update, prepared by New York lawyers Mark Leeds, Juan Lopez, Brennan Young and Stephanie Wood, summarizes how these rules impact affected taxpayers. This Legal Update will be published in the BNA/Bloomberg Tax Management Memorandum on September 23, 2019.