Recurring Item Exception Method

Recurring Item Exception Method means:
an exception to the economic performance rule; certain items that recur from year to year are treated as incurred if:

1. the all-events test is met during the tax year, 2. the economic performance rule is satisfied within 8V2 months after the end of the tax.

year, 3. the taxpayer treats similar items consistently as incurred in the tax year in which the all-events test is met, and.

4. accrual in the tax year in which the all-events test is met results in a better matching of income and expenses than accrual in the tax year in which the economic performance rule is satisfied.

The recurring item exception method must be elected on a timely filed return. Former IRC (check if this IRC provision is current here) §461.