IRS Modifies Automatic Accounting Method Change Procedures


The IRS on Thursday modified the procedures for obtaining automatic consent to change an accounting method. Revenue Procedure 2009-39 amplifies, modifies and clarifies various earlier pieces of guidance that had established the general procedures for taxpayers to secure advance IRS consent to an accounting method change.

 

Last year, the IRS released comprehensive accounting method change guidance in Revenue Procedure 2008-52. The new revenue procedure contains various amendments to that guidance. It addresses:

 

  • When a method change requires an IRC § 481(a) adjustment.
  • When an IRS examination is considered to have begun (“on the date the taxpayer is contacted in any manner by a representative” of the IRS).
  • When a taxpayer is considered to be under examination.
  • When a taxpayer under examination can apply for an accounting method change.
  • When a taxpayer can file a single application for two or more accounting method changes.

 

The revenue procedure also addresses how a taxpayer can change its method of accounting from capitalizing repair or maintenance costs under IRS § 263(a) to treating them as deductible business expenses. It also discusses:

 

  • Accounting for tenant construction allowances.
  • Dispositions of building structural components and other tangible depreciable assets.
  • Certain uniform capitalization methods used by resellers and producers.
  • Timing of incurring various legal liabilities.
  • Changes in the inventory price index method.
  • Changes to dollar-value pools of manufacturers.  

 

The revenue procedure is generally effective for Forms 3115 filed on or after Aug. 27, 2009.

 

SPONSORED REPORT

8 accounting and auditing issues you can’t afford to ignore

Download this sponsored report for an overview of some of the most important developments accountants and auditors are facing today.

DOWNLOAD

Filing season quick guide — Tax year 2014

Tax season started Jan. 20. Download our “quick guide,” a printable card that contains dollar thresholds, tax tables, standard amounts, credits, and deductions to keep at your fingertips during tax season.

TAX NEWS

Expired tax provisions extended for 2014

President Barack Obama signed legislation that retroactively extended more than 50 expired tax provisions for 2014, allowing taxpayers to take advantage of a host of tax incentives during this filing season.