General rule for methods of accounting
United States Code
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How this statute sits in the citation network, derived from CiteLaw's graph of published opinions.
★Landmark AuthorityTop 1% most-cited · cited by 196 decisions
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Courts citing this statute
Most recently cited by10
- 2025Conmac Investments, Inc. v. CIR 8th Cir.
- 2024Continuing Life Communities Thousand Oaks, LLC v. Cir 9th Cir.
- 2022Continuing Life Communities Thousand Oaks LLC, Spieker CLC, LLC, Tax Matters Partner, Petitioner T.C.
- 2017Hegar v. Gulf Copper & Manufacturing Corp. Tex. App.
- 2017Glenn Hegar, Comptroller of Public Accounts of the State of Texas And Ken Paxton, Attorney General of the State of Texas v. Gulf Copper and Manufacturing Corporation Tex.
- 2016Giant Eagle, Inc. v. Commissioner 3d Cir.
- 2016Shea Homes, Inc. & Subsidiaries v. Commissioner 9th Cir.
- 2015Conga Corp. v. Commissioner of Revenue Minn.
- 2015Massachusetts Mutual Life Insurance v. United States Fed. Cir.
- 2014Balestra v. United States Fed. Cl.
Counts reflect decisions in the CiteLaw corpus and may lag very recent opinions.
Text
Taxable income shall be computed under the method of accounting on the basis of which the taxpayer regularly computes his income in keeping his books. If no method of accounting has been regularly used by the taxpayer, or if the method used does not clearly reflect income, the computation of taxable income shall be made under such method as, in the opinion of the Secretary, does clearly reflect income. the cash receipts and disbursements method; an accrual method; any other method permitted by this chapter; or any combination of the foregoing methods permitted under regulations prescribed by the Secretary. A taxpayer engaged in more than one trade or business may, in computing taxable income, use a different method of accounting for each trade or business. Except as otherwise expressly provided in this chapter, a taxpayer who changes the method of accounting on the basis of which he regularly computes his income in keeping his books shall, before computing his taxable income under the new method, secure the consent of the Secretary. to prevent the imposition of any penalty, or the addition of any amount to tax, under this title, or to diminish the amount of such penalty or addition to tax. Subject to the provisions of subsections (a) and (b), a taxpayer may compute taxable income under any of the following methods of accounting— If the taxpayer does not file with the Secretary a request to change the method of accounting, the absence of the consent of the Secretary to a change in the method of accounting shall not be taken into account— (Source: (Aug. 16, 1954, ch. 736, 68A Stat. 151; Pub. L. 94–455, title XIX, § 1906 (b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 98–369, div. A, title I, § 161(a), July 18, 1984, 98 Stat. 696.))