treatment of a special nonrecurring item or items of cost or income different from that accorded such item or items under the method of accounting employed by the contractor for Federal income tax purposes, a letter type of special accounting agreement may be used. This type of agreement deals with the repositioning of specific amounts between specific fiscal years, and includes other provisions to prevent the double allowance of an item of cost or the double recognition of an item of income. (h) The Board will entertain a request for a special accounting agreement in any case in which the contractor believes that his method of accounting for Federal income tax purposes, either in whole or in part, is manifestly unsuitable for the purpose of renegotiation because it does not properly reflect his profits for a fiscal year and thus does not provide a fair and equitable basis for fiscal year renegotiation. Any such request should ordinarily be made prior to the processing of the case in the Accounting Division of the regional board. (i) Unilateral changes in accounting methods: Ordinarily the need for a change in accounting method to deviate from the Federal income tax basis is met by special accounting agreement. If necessary, however, the Board will exercise its authority under section 103 (f) or (i) of the Act to make such changes without the consent of the contractor. Such changes, when made, are generally designed to match costs with the receipts or accruals to which they relate, and thereby to reflect profits in a manner appropriate to the requirements and objectives of the renegotiation law. As in the case of changes by agreement, any changes in accounting method effected by unilateral action of the Board will be applied in the renegotiation proceedings for the year under review and all subsequent years, whether such proceedings are concluded by agreement or order. [36 F.R. 24058, Dec. 18, 1971; 37 FR 668, Jan. 15, 1972] Any person who willfully fails or refuses to furnish any statement, information, records, or data required of him ✦✦ shall, upon conviction thereof, be punished by a fine of not more than $10,000 or imprisonment for not more than 1 year, or both. (b) The act does not contemplate criminal punishment for a contractor who, through inadvertence or for good cause, fails to submit a report on time and thereby becomes delinquent. However, if a contractor refuses to file or knowingly continues his delinquency, it is imperative that action be taken to impose the sanctions provided by the act. This section describes the procedures that the Board will follow in such instances. (c) A contractor will be considered "recalcitrant" and subjected to the steps outlined below when: (1) He had receipts or accruals under renegotiable contracts or subcontracts which exceeded the applicable statutory floor in his fiscal year; (2) He has been clearly informed of his obligations under the act and provided with the necessary forms and instructions for their use; and (3) He has failed or refused to file. (d) After establishing that a contractor is recalcitrant, the Board will notify the contractor that: (1) Information available to the Board indicates that he is subject to renegotiation for a specified period or periods. (2) He is therefore required to file an appropriate report or reports with the Board. (3) He has theretofore been advised of his obligation under the act and provided with the necessary forms and instructions to discharge such obligation. (4) The act provides criminal sanctions for willful noncompliance with his obligation to file reports or furnish information to the Board under the act. (5) Unless compliance with the statutory requirements is forthcoming on or before a date certain, the Board will consider his continued failure or refusal to file willful and will refer the matter to the Department of Justice for enforcement of such criminal sanctions. (6) If, after the expiration of the stated period, the contractor has not filed, the Board will refer the matter to the Attorney General for criminal prosecution, or for such other action as the Attorney General may deem appropriate. [38 FR 9017, Apr. 9, 1973] INDEX Explanation: The following system of citation is used in this Index: 1. Sections of the regulations are cited by number. 2. Cross reference to index headings appear in Roman type; other directions are italicized. ADMINISTRATOR OF DECEASED Section IN 1498.2 (h). 1459.7(b), (c); 1499.1-26; 1499.2-1; 1499.2-16. DIVIDUAL REFUND AGREEMENT..... ADVERTISING EXPENSE, allocation to renegotiable business AFFILIATED GROUPS, consolidated renegoti- AGREEMENTS. See Clearance; Special account- Administration of refund agreement-- Allocation of excessive profits in.... Assignee. Bankruptcy. Board findings. Conclusive nature of.. Consolidation- Contents__ 1452.2. 1464.7(b). 1461.5. 1462.8 (d). 1498.2 (h). 1498.2(h). 1474.1. 1474.7. 1498.2 (h). 1498.2(g). 1474.2-1474.4. 1461.2-1461.5(c). 1474.3. Federal tax return not filed____ 1498.2(d) (1). Partnership--- 1498.2(d) (3). Profits not all included in Federal tax Limitation on determinations of excessive Limited exemption of certain subcontracts Renegotiation of contracts for ARCHIVES AND RECORDS SERVICE, con- ARMED SERVICES PROCUREMENT REG- ARTICLES, materials defined to include.... ASSIGNMENT OF CLAIMS ACT OF 1940, ASSUMED RISK. See Risk assumed. ATOMIC ENERGY COMMISSION: Named AUTHORIZED RESALE, contracts for ma- 1458.3(b). 1458.3(b). 1455.3(b) (6); 1490.3; 1490.6(d). 1453.5(b) (8). 1459.1(b)(5). 1452.1; 1452.2. 1471.1; 1471.2; 1499.2-15. 1471.1-1471.4; 1499.2-15. 1452.1(a), (b). 1453.5(b)(4). |