[Code of Federal Regulations]
[Title 26, Volume 6]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.481-4]

[Page 572-573]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.481-4  Adjustments taken into account with consent.

    (a) In addition to the terms and conditions prescribed by the 
Commissioner under Sec. 1.446-1(e)(3) for effecting a change in method 
of accounting, including the taxable year or years in which the amount 
of the adjustments required by section 481(a) is to be taken into 
account, or the methods of allocation described in section 481(b), a 
taxpayer may request approval of an alternative method of allocating the 
amount of the adjustments under section 481. See section 481(c). 
Requests for approval of an alternative method of allocation shall set 
forth in detail the facts and circumstances upon which the taxpayer 
bases its request. Permission will be granted only if the taxpayer and 
the Commissioner agree to the terms and conditions under which the 
allocation is to be effected. See Sec. 1.446-1(e) for the rules 
regarding how to secure the Commissioner's consent to a change in method 
of accounting.
    (b) An agreement to the terms and conditions of a change in method 
of accounting under Sec. 1.446-1(e)(3), including the taxable year or 
years prescribed by the Commissioner under that section (or an 
alternative method described in paragraph (a) of this section) for 
taking the amount of the adjustments under section 481(a) into account, 
shall be in writing and shall be signed by the Commissioner and the 
taxpayer. It shall set forth the items to be adjusted, the amount of the 
adjustments, the taxable year or years for which the adjustments are to 
be taken into account, and the amount of the adjustments allocable to 
each year. The

[[Page 573]]

agreement shall be binding on the parties except upon a showing of 
fraud, malfeasance, or misrepresentation of material fact.

[T.D. 8608, 60 FR 40079, Aug. 7, 1995]