Notes on 26 U.S.C. § 481 : US Code - Notes

Search Notes on 26 U.S.C. § 481 : US Code - Notes

(Aug. 16, 1954, ch. 736, 68A Stat. 160; Pub. L. 85-866, title I,
Sec. 29(a), (b), Sept. 2, 1958, 72 Stat. 1626-1628; Pub. L. 91-172,
title V, Sec. 512(f)(4), Dec. 30, 1969, 83 Stat. 641; Pub. L. 94-
455, title XIX, Secs. 1901(a)(70), 1906(b)(13)(A), Oct. 4, 1976,
90 Stat. 1776, 1834; Pub. L. 96-471, Sec. 2(b)(3), Oct. 19, 1980,
94 Stat. 2254.)
REFERENCES IN TEXT
The Internal Revenue Code of 1939, referred to in subsec.
(b)(3)(C), is act Feb. 10, 1939, ch. 2, 53 Stat. 1, as amended.
Prior to the enactment of the Internal Revenue Code of 1986
[formerly I.R.C. 1954], the 1939 Code was classified to former
Title 26, Internal Revenue Code. Chapters 1 and 2 of the Internal
Revenue Code of 1939 were comprised of sections 1 to 482 and 500 to
784, respectively, of former Title 26. Chapters 1 (except sections
143 and 144) and 2 were repealed by section 7851(a)(1) of this
title. For table of comparisons of the 1939 Code to the 1986 Code,
see Table I preceding section 1 of this title. See, also, section
7851(e) of this title for provision that references in the 1986
Code to a provision of the 1939 Code, not then applicable, shall be
deemed a reference to the corresponding provision of the 1986 Code,
which is then applicable.
AMENDMENTS
1980 - Subsec. (d). Pub. L. 96-471 struck out subsec. (d) which
provided that this section was not to apply to a change to which
section 453 of this title, relating to change to installment
method, applied.
1976 - Subsecs. (b)(1), (2). Pub. L. 94-455, Sec. 1901(a)(70)(B),
struck out ", other than the amount of such adjustments to which
paragraph (4) or (5) applies," after "required by subsection
(a)(2)".
Subsec. (b)(4), (5), (6). Pub. L. 94-455, Sec. 1901(a)(70)(A),
struck out par. (4) which related to special rule for pre-1954
general adjustments, par. (5) which related to special rule for pre-
1954 adjustments in case of certain decedents, and par. (6) which
related to the application of the special rule for pre-1954 general
adjustments.
Subsec. (c). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out "or
his delegate" after "Secretary".
1969 - Subsec. (b)(3)(A). Pub. L. 91-172 substituted "loss
carryback or carryover" for "loss carryover".
1958 - Subsec. (a)(2). Pub. L. 85-866, Sec. 29(a)(1), inserted
"unless the adjustment is attributable to a change in the method of
accounting initiated by the taxpayer", after "does not apply".
Subsec. (b)(1). Pub. L. 85-866, Sec. 29(b)(1)-(3), inserted ",
other than the amount of such adjustments to which paragraph (4) or
(5) applies," after "subsection (a)(2)" and substituted "the
aggregate increase in the taxes" for "the aggregate of the taxes"
and "which would result if one-third of such increase in taxable
income" for "which would result if one-third of such increase".
Subsec. (b)(2). Pub. L. 85-866, Sec. 29(b)(1), (4), inserted
"other than the amount of such adjustments to which paragraph (4)
or (5) applies," after "subsection (a)(2)", wherever appearing and
"(or under the corresponding provisions of prior revenue laws)"
after "the net increase in the taxes under this Chapter".
Subsec. (b)(3)(A). Pub. L. 85-866, Sec. 29(b)(5), substituted
"paragraph (1) or (2)" for "paragraph (2)", wherever appearing.
Subsec. (b)(4) to (6). Pub. L. 85-866, Sec. 29(a)(2), added pars.
(4) to (6).
EFFECTIVE DATE OF 1980 AMENDMENT
For effective date of amendment by Pub. L. 96-471, see section
6(a)(1) of Pub. L. 96-471, set out as an Effective Date note under
section 453 of this title.
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by section 1901(a)(70) of Pub. L. 94-455 effective for
taxable years beginning after Dec. 31, 1976, see section 1901(d) of
Pub. L. 94-455, set out as a note under section 2 of this title.
EFFECTIVE DATE OF 1969 AMENDMENT
Amendment by Pub. L. 91-172 applicable with respect to net
capital losses sustained in taxable years beginning after Dec. 31,
1969, see section 512(g) of Pub. L. 91-172, set out as a note under
section 1212 of this title.
EFFECTIVE DATE OF 1958 AMENDMENT
Section 29(d) of Pub. L. 85-866, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
"(1) In general. - The amendments made by this section [amending
this section and section 381 of this title] shall apply with
respect to any change in a method of accounting where the year of
the change (within the meaning of section 481 of the Internal
Revenue Code of 1986 [formerly I.R.C. 1954]) is a taxable year
beginning after December 31, 1953, and ending after August 16,
1954.
"(2) Exception for certain agreements. - The amendments made by
subsections (a), (b)(I), and (c) [amending this section and section
381 of this title] shall not apply if before the date of the
enactment of this Act [Sept. 2, 1958] -
"(A) the taxpayer applied for a change in the method of
accounting in the manner provided by regulations prescribed by
the Secretary of the Treasury or his delegate, and
"(B) the taxpayer and the Secretary of the Treasury or his
delegate agreed to the terms and conditions for making the
change."
CHANGES IN TREATMENT OF POLICYHOLDER DIVIDENDS BY QUALIFIED GROUP
SELF-INSURERS' FUNDS
Pub. L. 101-239, title VII, Sec. 7816(m), Dec. 19, 1989, 103
Stat. 2421, provided that: "If, for the 1st taxable year beginning
on or after January 1, 1987, a qualified group self-insurers' fund
changes its treatment of policyholder dividends to take into
account such dividends no earlier than the date that the State
regulatory authority determines the amount of the policyholder
dividend that may be paid, then such change shall be treated as a
change in a method of accounting and no adjustment under section
481(a) of the Internal Revenue Code of 1986 shall be made with
respect to such change in method of accounting."
TRANSITIONAL PROVISIONS FOR INCOME TAX TREATMENT OF DEALER RESERVE
INCOME
Pub. L. 86-459, May 13, 1960, 74 Stat. 124, authorized any person
who computed taxable income under the accrual method of accounting
for his most recent taxable year ending on or before June 22, 1959,
and who treated dealer reserve income for such taxable year as
accruable for a subsequent taxable year, to elect before Sept. 1,
1960, to have section 481 of this title apply to the treatment for
income tax purposes of dealer reserve income.
ELECTION TO RETURN TO FORMER METHOD OF ACCOUNTING
Section 29(e) of Pub. L. 85-866 authorized an election by certain
taxpayers, who, for any taxable years beginning after Dec. 31,
1953, and ending after Aug. 16, 1954, and before Sept. 2, 1958,
computed their taxable incomes using different accounting methods
in succeeding taxable years, to return to their first method of
accounting, where the election was made within six months after
Sept. 2, 1958. Claims for refunds of overpayments of tax resulting
from the election were to be filed within one year after the date
of the election. Such an election was to be considered a consent to
an assessment of a deficiency resulting from the election, where
the assessment is made within one year after the date of the
election.