474 LAWS OF MARYLAND. [CH. 277

taxpayer, when the taxpayer is directly or indirectly a bene-
ficiary under such policy;

(g) Local improvement assessments.

219. Accounting Basis, Period and Changes Therein, (a)
The income of the taxpayer shall be computed upon the basis
of the taxpayer's annual accounting period (fiscal year or
calendar year, as the case may be) in accordance with the
method of accounting regularly employed in keeping the books
of such taxpayer, but if no such method of accounting has
been employed or if the method employed does not clearly
reflect the true income of the taxpayer, computation shall be
made upon the basis and in such manner, as in the opinion
of the Comptroller does clearly reflect the true income. If
the taxpayer's annual accounting period is other than a
fiscal year, as defined in this sub-title, or if the taxpayer has
no annual accounting period, or does not keep books, the
income shall be computed on the basis of the calendar year.

(b) Unless otherwise required by this sub-title or by regu-
lations of the Comptroller, taxpayers reporting their income
on a cash basis shall account only for amounts actually or
constructively received and actually expended and taxpayers
reporting their income on an accrual basis shall account for
amounts earned, whether received or not, and liabilities in-
curred, whether paid or not.

(c) If the taxpayer files a Federal income tax return,
his income shall be computed for the purposes of this sub-
title on the same basis (cash or accrual) and for the same
calendar or fiscal year as in such Federal income tax return.

(d) If the taxpayer does not file a Federal income tax
return, he may, with the approval of the Comptroller, change
his accounting period from a fiscal year to a calendar year,
from calendar to fiscal year, or from one fiscal year to an-
other, and his income shall thereafter be computed on the
basis of such new accounting period.

(e) If the period of computing income is changed from
fiscal year to calendar year, a separate return shall be filed
for the period between the close of the last fiscal year for
which return was filed and the following December 31st.
If the change is made from calendar year to fiscal year, a
separate return shall be filed for the period between the
close of the last calendar year for which return was filed and
the first succeeding date designated as the close of the fiscal
year. If the change is made from one fiscal year to another
fiscal year, a separate return shall be filed for the period
between the close of the former fiscal year and the first
succeeding date designated as the close of the new fiscal year.