A taxpayer that is a tax shelter, as defined in section 448(d)(3) of the Internal Revenue Code, is not permitted to use the cash method pursuant to section 448(a)(3), and is also not permitted to use the small business taxpayer exemptions contained in sections 163(j)(3) (limitation on business interest), 263A(i) (uniform capitalization), 460(e)(1)(B) (percentage of completion method), and 471(c) (general inventory method). Under section 448(d)(3), a taxpayer that is a "syndicate" is considered a tax shelter. For purposes of section 448(d)(3), a syndicate is a partnership or other entity (other than a C corporation) if more than 35 percent of the losses of such entity during the tax year are allocated to limited partners or limited entrepreneurs. On January 5, 2021, the Treasury Department and IRS issued final regulations for the small business taxpayer exemptions under sections 263A, 448, 460, and 471. The final regulations under section 448 permit a taxpayer to make an annual election to use its allocations made in the immediately preceding tax year, instead of using the current tax year's allocation, to determine whether the taxpayer is a syndicate under section 448(d)(3) for the current tax year. The election is made on the timely-filed original return (including extensions) for the tax year for which it is made. The election is valid only for the tax year for which it is made, and once made, cannot be revoked. See Regulations section 1.448-2(b)(2)(iii)(B)(2) (TD 9942) PDF for guidance on the time and manner of making the annual election. These final regulations are generally applicable for tax years beginning on or after January 5, 2021 (for contracts entered into in such years in the case of the small business exemption final regulations under section 460). However, a taxpayer may apply these regulations for a tax year beginning after December 31, 2017, and before January 5, 2021, provided that the taxpayer satisfies certain requirements. See Applicability Dates of TD 9942. Although the annual election under Regulations section 1.448-2(b)(2)(iii)(B) is not a method of accounting, the application of other aspects of these final regulations may result in a change in method of accounting. See Rev. Proc. 2015-13, 2015-5 I.R.B. 419.