Pitfalls and opportunities of automatic accounting method changes.

Tax Adviser, The, June, 1999 by Gibbs, Paul K.; Kalis, Frank J., Jr.

An often-misunderstood provision of Section 5.01 of Rev. Proc. 98-60, involves the change from a so-called "hybrid" accounting method to the overall accrual method. A hybrid method may include a method of treating a single item (or a limited number of items) under the cash method, with all other items of income and expense accounted for under the accrual method.

Therefore, a taxpayer otherwise using the overall accrual method that fails to accrue a deduction or income until paid or received (i.e., the cash method), could be eligible to automatically change its method of ...