Tax Tip of the Week
900 N. Kings Highway, Cherry Hill, New Jersey 08034
856.667.4100 ·
215.563.0276 ·
Fax: 856.667.3652
For the week of
May 22, 2000
The IRS has good news for many small businesses
On April 28, 2000, the IRS issued Revenue Procedure 2000-22
that will allow many small businesses to use or change to the "cash" method of accounting instead of
using the "accrual" method.
Businesses with average annual gross receipts of $1 million or less for the past three years can now use the cash
method of accounting even if they deal in inventory items as a major part of their revenue. In the past, many small
businesses were required to use the accrual method by the IRS.
A 1999 tax law change disallowed the use of the installment method of reporting for the sale of assets by accrual-method
taxpayers. This meant that many small business owners would be required to report the entire gain in the year they
sold their businesses, even though they took only a small down payment. This new IRS notice will allow those with
under $1 million gross receipts to use the cash method of accounting and hence the installment method when reporting
the sale of their business.
If you would like to review the potential tax benefits for your business under the new IRS position, please contact
us. We are here to see that you pay no more tax than the law requires.
Please come back next week for a new tax tip.
And tell your friends about this tips page. We are a growing firm, and we appreciate your referrals.
Click here to view previous tax tips.
"Tax Tips" are published weekly to
provide useful tax information. Return to this site every week for helpful tax-cutting suggestions, tax reminders,
and current tax information.
The information contained in this site is of a general nature and should not be acted upon in your specific situation
without further details and/or professional assistance.
If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list
to receive other tax-cutting information from time to time, please contact our office. We're here to help.
