GILTI as Charged: Automatic Accounting Method Changes for CFCs under the GILTI Tax System

IRS guidance allows automatic accounting method changes for taxpayers who want to adopt a depreciation method conforming to the alternative depreciation system (ADS) for controlled foreign corporations (CFCs) under the global intangible low-taxed income (GILTI) tax system. Adoption of the ADS was initially a nonautomatic accounting method change under IRS rules. But IRS relaxed the rules in Rev. Proc. 2021-26, allowing ADS changes to be automatic for a limited time and providing taxpayer guidance.

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Related Content 

• Treasury and IRS Issue Accounting Method Change Guidance for Foreign Corporations
  See how IRS guidance under Rev. Proc. 2021-26 expands on final regulations issued in 2019 that implement Internal Revenue Code Sec. 951A, regarding GILTI inclusions and reporting. GILTI was established under the Tax Cuts and Jobs Act (TCJA) and applies to tax years beginning after December 31, 2017.

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