Section 481 Adjustment Clause Samples
A Section 481 Adjustment clause outlines the process for adjusting a taxpayer's income when there is a change in accounting method, as required by Section 481 of the Internal Revenue Code. This clause specifies how previously reported income or deductions must be recalculated to prevent duplication or omission, often resulting in an adjustment spread over several tax years. Its core function is to ensure that the transition to a new accounting method is handled fairly and accurately, preventing distortions in taxable income due to the change.
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Section 481 Adjustment. Parent acknowledges that because of this transaction, the Company will be required to convert from an S corporation to a C corporation for income tax purposes. In connection with the change in tax status, the Company or Parent will be required to compute a Section 481(a) adjustment pursuant to the code as a result of the Company's change of its method of accounting for tax purposes from the cash method to the accrual method. The change in tax status will require the Company or the Parent to incur an additional tax liability related to the change in method of accounting as well as with other differences between financial accounting and tax accounting methods. Such tax liability is not disclosed upon the financial statements of the Company.
Section 481 Adjustment. Without the prior written consent of Old National, St. J▇▇▇▇▇ shall not make or change any election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return (except as set forth in Section 4.15 of the St. J▇▇▇▇▇ Disclosure Schedule), enter into any closing agreement, settle any Tax claim or assessment relating to St. J▇▇▇▇▇, surrender right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any tax claim or assessment relating to St. J▇▇▇▇▇, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax.
Section 481 Adjustment. Except as set forth on ---------------------- Schedule 2.1.6(h), no member of the BHC Group is or will be required to include any adjustment in taxable income for any Post-Closing Tax Period under section 481(c) of the Code (or any similar provision of the Tax laws of any jurisdiction) as a result of a change in method of accounting for a Pre-Closing Tax Period or pursuant to the provisions of any agreement entered into with any Governmental Authority on or before the Closing Date with regard to the Tax liability of any member of the BHC Group for any Pre-Closing Tax Period.