Cash method used by a medical clinic.

• Jurisdiction: United States
• Date: 01 October 1997
• Author: Fleishman, Bernard K.

Sec. 446 and the regulations thereunder provide that taxable income is required to be reported under the method of accounting regularly used by the taxpayer in keeping its books. The IRS permits taxpayers to use any allowable method that clearly reflects income: [] Cash receipts and disbursements method. [] Accrual method. [] Any other method permitted by the Code (e.g., completed contract method). [] Any combination of methods permitted by the regulations.

Generally, individuals, trusts, estates, many partnerships and certain corporations employ the cash method of accounting. Under the cash method...