---
title: "Screen which federal income-tax accounting method the business may use"
url: "https://ailawframework.com/practice/taxation/screen-which-gst-accounting-method-the-business-may-use/united-states"
type: "task_jurisdiction_version"
site: "AI Law Framework"
id: "A26-PE20261022-21-US"
practice_area: "Taxation"
tier: "yellow"
lawyer_review: "required"
jurisdictions: ["US"]
last_reviewed: "2026-10-22"
---

# Screen which federal income-tax accounting method the business may use

> Record whether the books use the cash method or an accrual method, and whether the entity is one the publication says generally cannot use the cash method.

Canonical page: https://ailawframework.com/practice/taxation/screen-which-gst-accounting-method-the-business-may-use/united-states  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Taxation](https://ailawframework.com/practice/taxation.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| How AI is used | Record whether the books use the cash method or an accrual method, and whether the entity is one the publication says generally cannot use the cash method. |
| What the lawyer must review | Publication 538, revised January 2022, says the cash method generally reports income in the tax year it is received and deducts expenses in the tax year they are paid, and an accrual method generally reports income in the year it is earned and deducts expenses in the year they are incurred. A corporation other than an S corporation, and a partnership that has a corporation other than an S corporation as a partner, generally cannot use the cash method, including a combination that includes the cash method. A corporation or partnership, other than a tax shelter, that meets the gross receipts test can generally use the cash method. The January 2022 publication states that test as average annual gross receipts of $26 million or less for the three prior tax years, and says the figure is indexed for inflation. An entity that fails the test must change to an accrual method and file Form 3115. IRS Office of Professional Responsibility Issue 2026-19 says Circular 230 § 10.22 requires due diligence in papers and in representations to the IRS and to clients, and that the practitioner must review AI-created text and verify facts, citations and calculations before anything is delivered to a client or submitted to the IRS. Do not put tax return information into a public tool: Issue 2026-19 maps unauthorized use or disclosure to IRC §§ 6713 and 7216. |
| Written for | United States |
| Applies to | [Screen which GST accounting method the business may use](https://ailawframework.com/practice/taxation/screen-which-gst-accounting-method-the-business-may-use.md) |

## Checking plan

- What the AI does: Record whether the books use the cash method or an accrual method, and whether the entity is one the publication says generally cannot use the cash method.
- Basis: Checked against the linked sources on 22 October 2026. Confirm the current instrument before reliance.

## Notes

- There is no federal GST and no cash or non-cash GST election. This screen is the federal income-tax method only.
- Do not treat $26 million as the 2026 gross-receipts amount. The publication says the figure is indexed for inflation and the revision date is January 2022. Confirm the current indexed amount.

## Sources

- [IRS Publication 538 (January 2022), Accounting Periods and Methods](https://www.irs.gov/publications/p538) (checked 2026-10-22)
- [IRS Office of Professional Responsibility, Issue 2026-19, Introductory Guidelines for Responsible AI Use in Federal Tax Practice](https://www.irs.gov/pub/opr-taxpros/issue-number-2026-19-introductory-guidelines-for-responsible-ai-use-in-federal-tax-practice.pdf) (checked 2026-10-22)

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*