,i  #aacth ,,congress  #ast ,session    
,h4 ,r4 #idg  ,,in ,,the ,,house ,,of   
,,representatives  ,march #e1 #bjac ,mr4
 ,schock 7for himself and ,mr4 ,thompson
 of ,california7 introduced the         
following bill2 which was referred to   
the ,committee on ,ways and ,means  ,a  
,,bill  ,to amend the ,internal ,revenue
 ,code of #aihf to expand the           
availability of the cash method of      
accounting for small businesses1 and for
 other purposes4  #a4 ,short title ,this
 ,act may be cited as the ,small        
,business ,accounting and ,tax          
,simplification ,act4  #b4              
,clarification of cash accounting rules 
for small business  7a7 ,cash accounting
 permitted  7#a7 ,in general ,section   
#ddf of the ,internal ,revenue ,code of 
#aihf 7relating to general rule for     
methods of accounting7 is amended by    
adding at the end the following new     
subsection3  7g7 ,certain small business
 taxpayers permitted ,to use cash       
accounting method without limitation    

7#a7 ,in general ,an eligible taxpayer  
shall not be required to use an accrual 
method of accounting for any taxable    
year4  7#b7 ,eligible taxpayer ,for     
purposes of this subsection1 a taxpayer 
is an eligible taxpayer with respect to 
any taxable year if--  7,a7 for all     
prior taxable years beginning after     
,december #ca1 #bjab1 the taxpayer 7or  
any predecessor7 met the gross receipts 
test of section #ddh7;c71 and  7,b7 the 
taxpayer is not subject to section #ddg 
or #ddh4  4  7#b7 ,expansion of gross   
receipts test  7,a7 ,in general         
,paragraph 7#c7 of section #ddh7;b7 of  
such ,code 7relating to entities with   
gross receipts of not more than         
#e1jjj1jjj7 is amended by striking      
#e1jjj1jjj in the text and in the       
heading and inserting #aj1jjj1jjj4  7,b7
 ,conforming amendments ,section        
#ddh7;c7 of such ,code is amended--  7i7
 by striking #e1jjj1jjj each place it   
appears in the text and in the heading  
of paragraph 7#a7 and inserting         

#aj1jjj1jjj1 and  7ii7 by adding at the 
end the following new paragraph3  7#d7  
,inflation adjustment ,in the case of   
any taxable year beginning in a calendar
 year after #bjac1 the dollar amount    
contained in subsection 7b77#c7 and     
paragraph 7#a7 of this subsection shall 
be increased by an amount equal to--    
7,a7 such dollar amount1 multiplied by  
7,b7 the cost-of-living adjustment      
determined under section #a7;f77#c7 for 
the calendar year in which the taxable  
year begins1 by substituting calendar   
year #bjab for calendar year #aiib in   
subparagraph 7,b7 thereof4  ,if any     
amount as adjusted under this           
subparagraph is not a multiple of       
#ajj1jjj1 such amount shall be rounded  
to the nearest multiple of #ajj1jjj4  4 
7b7 ,clarification of inventory rules   
for small business  7#a7 ,in general    
,section #dga of the ,internal ,revenue 
,code of #aihf 7relating to general rule
 for inventories7 is amended by         
redesignating subsection 7c7 as         

subsection 7d7 and by inserting after   
subsection 7b7 the following new        
subsection3  7c7 ,small business        
taxpayers not required ,to use          
inventories  7#a7 ,in general ,a        
qualified taxpayer shall not be required
 to use inventories under this section  
for a taxable year4  7#b7 ,treatment of 
taxpayers not using inventories ,if a   
qualified taxpayer does not use         
inventories with respect to any property
 for any taxable year beginning after   
,december #ca1 #bjab1 such property     
shall be treated as a material or supply
 which is not incidental4  7#c7         
,qualified taxpayer ,for purposes of    
this subsection1 the term qualified     
taxpayer means--  7,a7 any eligible     
taxpayer 7as defined in section         
#ddf7;g77#b771 and  7,b7 any taxpayer   
described in section #ddh7;b77#c74  4   
7#b7 ,conforming amendments  7,a7       
,subpart ,d of part ,,ii of subchapter  
,e of chapter #a of such ,code is       
amended by striking section #dgd4  7,b7 

,the table of sections for subpart ,d of
 part ,,ii of subchapter ,e of chapter  
#a of such ,code is amended by striking 
the item relating to section #dgd4  7c7 
,effective date and special rules  7#a7 
,in general ,the amendments made by this
 section shall apply to taxable years   
beginning after ,december #ca1 #bjab4   
7#b7 ,change in method of accounting ,in
 the case of any taxpayer changing the  
taxpayer's method of accounting for any 
taxable year under the amendments made  
by this section--  7,a7 such change     
shall be treated as initiated by the    
taxpayer2  7,b7 such change shall be    
treated as made with the consent of the 
,secretary of the ,treasury2 and  7,c7  
the net amount of the adjustments       
required to be taken into account by the
 taxpayer under section #dha of the     
,internal ,revenue ,code of #aihf shall 
be taken into account over a period 7not
 greater than #d taxable years7         
beginning with such taxable year4