Natural Business Year Definition What is a Natural Business Year?

The AICPA utilized its July, 1987, CPA Letter to relay an action alert on this issue.The Institute encourages all members to contact their senators and congressmen to ask them to cosponsor and vote for the legislation. Letters should explain the serious problems that the current law is creating for small business owners and for CPA firms,… Ibid.. In the 1980’s, the IRS continued its efforts to reduce the number of taxpayers that could defer income as a result of their interest in “flow through” entities with a different taxable year.

However, as the authors’ research indicates, as soon as the IRS issued a pronouncement, editors of accounting journals were publishing “tax planning” techniques to avoid the pronouncement. Tax reasons, not business reasons, appeared to be the principal concern of entities. This became the reason exclusively mentioned in a number of articles in the 1960’s “Change of Taxable Year … “; “Timely Election … “; and “Change of Accounting Period … “.

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• The NBY “incorporates cyclical flexibility while preserving calendar regularity”