CHANGE IN REPORTING INCOME ON INSTALLMENT BASIS.

SEC. 916. CHANGE IN REPORTING INCOME ON INSTALLMENT BASIS. (a) In General.—Section 453(c) (relating to change from accrual to installment basis of reporting) is amended by adding at the end thereof the following new paragraphs: “(4) Revocation of election.—An election under paragraph (1) to report taxable income on the installment basis may be revoked by filing a notice of revocation, in such manner as the Secretary or his delegate prescribes by regulations, at any time before the expiration of 3 years following the date of the filing of the tax return for the year of change. If such notice of revocation is timely filed— “(A) the provisions of paragraph (1) and subsection (a) shall not apply to the year of change or for any subsequent year; “(B) the statutory period for the assessment of any deficiency for any taxable year ending before the filing of such notice, which is attributable to the revocation of the election to use the installment basis, shall not expire before the expiration of 2 years from the date of the filing of such notice, and such deficiency may be assessed before the expiration of such 2-year period notwithstanding the provisions of any law or rule of law which would otherwise prevent such assessment; and “(C) if refund or credit of any overpayment, resulting from the revocation of the election to use the installment basis, 83 Stat. 724 for any taxable year ending before the date of the filing of the notice of revocation is prevented on the date of such filing, or within one year from such date, by the operation of any law or rule of law (other than section 7121 or 7122), refund or credit of such overpayment may nevertheless be made or allowed if claim therefor is filed within one year from such date. No interest shall be allowed on the refund or credit of such overpayment for any period prior to the date of the filing of the notice of revocation. “(5) Election after revocation.—If the taxpayer revokes under paragraph (4) an election under paragraph (1) to report taxable income on the installment basis, no election under paragraph (1) may be made, except with the consent of the Secretary or his delegate, for any subsequent taxable year before the fifth taxable year following the year of change with respect to which such revocation is made.” (b) Effective Date.—The amendment made by subsection (a) shall apply to an election made for any year of change (as defined in section 453(c)(1) of the Internal Revenue Code of 1954) ending on or after the date of the enactment of this Act, and shall also apply to any such year of change which ended before such date if the 3-year statutory period for assessment of any deficiency for such year has not expired on the date of the enactment of this Act.