Rev. Proc. 2011-46 provides a book safe harbor method of accounting for taxpayers using the nonaccrual-experience (NAE) method of accounting under § 448(d)(5) of the Internal Revenue Code and § 1.448-2 of the Income Tax Regulations. This revenue procedure also provides the procedures by which a taxpayer may obtain automatic consent (1) to change to the NAE book safe harbor method, and (2) to make certain changes within the NAE book safe harbor method.

Eligible taxpayers may calculate their uncollectible amount by multiplying the portion of the year-end allowance for doubtful accounts on the taxpayer’s applicable financial statement (AFS) attributable to current year NAE-eligible accounts receivable by 95%. The revenue procedure also provides the mechanisms by which a taxpayer may obtain automatic consent to change to, or make certain changes within, the NAE book safe harbor method.

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The tax attorneys at the Beliveau Law Group provides legal services for federal and state tax law as well as tax returns. The law firm has offices and attorneys in Naples, Florida; Boca Raton, Florida; Danvers, Massachusetts; Waltham, Massachusetts; Quincy, Massachusetts; Manchester, New Hampshire and Salem, New Hampshire.