IRS Rev. Proc.: Change to Allowance Charge-Off Method for Bad Debt Rules (IRC §166)

The Internal Revenue Service (IRS) published a revenue procedure allowing taxpayers to change their accounting methods to the Allowance Charge-off Method for taxable years ending on or after December 28, 2023. The IRS provided guidance on how taxpayers may change to the allowance charge-off method for purposes of the bad debt rules in Section 166. The guidance states that a debt instrument held by a regulated financial company or a member of regulated financial group is conclusively presumed to be worthless, in whole or in part, to the extent that the amount of any charge off under Section 166 is ...