PUBLIC LAW 97-34—AUG. 13, 1981
95 STAT. 253
the method provided by section 472(b) may elect to use one inventory 26 USC 472. pool for any trade or business of sucb taxpayer. "Qo) EuGiBLE SMALL BUSINESS DEFINED.—For purposes of this section, a taxpayer is an eligible small business for any taxable year if the average annual gross receipts of the taxpayer do not exceed $2,000,000 for the 3-taxable-year period ending with the taxable year. "(c) SPECIAL RULES.—For purposes of this section— "(1) CONTROLLED GROUPS.—
"(A) IN GENERAL.—In the case of a taxpayer which is a member of a controlled group, all persons which are component members of such group at any time during the calendar year shall be treated as one taxpayer for such year for purposes of determining the gross receipts of the taxpayer. "(B) CONTROLLED GROUP DEFINED.—For purposes of subparagraph (A), persons shall be treated as being members of a controlled group if such persons would be treated as a single employer under the regulations prescribed under section 52(b). "(2) ELECTION.—
"(A) IN GENERAL.—The election under this section may be made without the consent of the Secretary and shall be made at such time and in such manner as the Secretary may by regulations prescribe. "(B) PERIOD TO WHICH ELECTION APPLIES.—The election under this section shall apply— "(i) to the taxable year for which it is made, and "(ii) to all subsequent taxable years for which the taxpayer is an eligible small business, unless the taxpayer secures the consent of the Secretary to the revocation of such election. "(3) TRANSITIONAL RULES.—In the case of a taxpayer who changes the number of inventory pools maintained by him in a taxable year by reason of an election (or cessation thereof) under this section— "(A) the inventory pools combined or separated shall be combined or separated in the manner provided by regulations under section 472; "(B) the aggregate dollar value of the taxpayer's inventory as of the beginning of the first taxable year— "(i) for which an election under this section is in effect, or "(ii) after such election ceases to apply, shall be the same as the aggregate dollar value as of the close of the taxable year preceding the taxable year described in clause (i) or (ii) (as the case may be), and "(C) the first taxable year for which an election under this section is in effect or after such election ceases to apply (as the case may be) shall be treated as a new base year in accordance with procedures provided by regulations under section 472." (b) CLERICAL AMENDMENT.—The table of sections for such subpart D is amended by adding at the end thereof the following new item: "Sec. 474. Election by certain small businesses to use one inventory pool." (c) EFFECTIVE DATE.—The amendments made by this section shall
apply to taxable years beginning after December 31, 1981.
26 USC 474 note.