1. (a) Qualifying small business taxpayers engaged in an eligible trade or business may use the cash receipts and disbursements method of accounting ("cash method") rather than the accrual method of accounting for tax years ending on or after December 31, 2001.

2. (b)

   1. (1) Rev. Proc. 01-76, 2001-52 I.R.B. 613, does not apply to farming operations.

   2. (2) However, taxpayers engaged in the trade or business of farming may use the cash method of accounting unless the taxpayer is:

      1. (A) Required to use the accrual method under I.R.C. § 447; or
      2. (B) Prohibited from using the cash method under I.R.C. § 448.

3. (c)

   1. (1) Rev. Proc. 01-76, 2001-52 I.R.B. 613, does not apply to a taxpayer with average annual gross receipts of one million dollars ($1,000,000) or less.
   2. (2) However, such taxpayers may use the cash method of accounting if authorized to do so under Rev. Proc. 01-10, 2001-2 I.R.B. 272.

Codification Notes: I.R.C. § 447 can be found codified at 26 U.S.C. § 447. I.R.C. § 448 can be found codified at 26 U.S.C. § 448.