NFIB

IRS Announces New Rule for Small Businesses
12/10/2001

Small businesses will have an easier time figuring their income and expenses after today's announcement from the IRS that it will no longer require some small businesses to use the complex accrual and inventory accounting method, the AP reports.

The new rule allows many service-related businesses with average gross annual receipts of $10 million or less to use the cash method. Prior to the announcement, only businesses with $1 million or less in gross receipts could use the simpler method.

The new rules begin with the 2001 tax year.

"In the real world, this will free the independent home builder or repairman from having to account for every nail, board, can of paint or shingle used over the course of the year," said Sen. Kit Bond, ranking Republican of the Senate Small Business Committee.