Sample Form 886-A - Explanations of ItemsThe sample form is an example of Form 886-A, which is used as a schedule or exhibit in examination reports. The sample form is an example of a completed form with the following narrative related to IRC 481(a): In the case of a change in method of accounting by a partnership, the adjustments required by IRC Section 481 shall be made with respect to the taxable income of the partnership but the limitations on tax shall apply to the individual partners. Each partner shall take into account his distributive share of the partnership items, as so adjusted, for the taxable year of the change. This applies to a partner whose taxable income is so increased by more than $3,000 as a result of such adjustments to the partnership taxable income. It is not necessary for the partner to have been a member of the partnership for the two taxable years immediately preceding the taxable year of the change of the partnership’s accounting method in order to have the limitation apply. Reg.1.481-2(c)(5)(i).Additionally, there is a note to the examiner regarding RGS input. The IRC Section 481(a) Adjustment must be added twice as an issue:Ordinary income adjustment subject to self-employment tax.Separately stated item: a) In Form 1065 RGS return setup under Other tab add, Sec.481(a) Adjustment for purposes of Sec. 481(b) Tax Comp. and b) Under Issue, Adjustments, Categorization: select Sch. K - Other Items, Amounts to be reported separately, then Sec. 481(a) Adjustment for purposes of Sec. 481(b) Tax Comp.