what does the irs require for accounting methods 
the irs requires businesses making an average of 25 million or more in sales for the preceding three years to use accrual accounting as for individual taxpayers the irs mandates that they choose an accounting method that accurately reflects their income and be consistent in their choice of accounting method from year to year can a hybrid of the 2 primary accounting methods be used yes by companies but not individuals companies may use a hybrid of accrual accounting and cash accounting under irs rules if specified requirements are met switching between methods is not allowed because it would potentially allow a business to manipulate revenue to minimize its tax burdens the bottom linean accounting method is the rules that a company must follow in reporting revenues and expenses accrual accounting used mostly by companies and cash accounting used mostly by individuals are the two primary accounting methods 