The cash basis of accounting is prohibited for income tax purposes.

Name: The cash basis of accounting is prohibited for income tax purposes.
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The cash basis of accounting is allowed for income tax purposes, but only for certain taxpayers such as individuals, small businesses with gross receipts of $5 million or less, and certain types of farming businesses. Most corporations and partnerships must use the accrual basis of accounting for income tax purposes.

The Cash Basis of Accounting Is Prohibited for Income Tax