Automatic Procedures for Changing Accounting Methods Updated, Expanded

January 10, 2011

The IRS on Monday released updated procedures under which taxpayers can receive automatic consent to change their accounting methods ( Revenue Procedure 2011-14 ). The revenue procedure updates prior guidance contained in Revenue Procedures 2008-52 and 2009-39 and gives additional accounting method changes for which taxpayers can obtain automatic consent. The revenue procedure also modifies the procedures in Revenue Procedure 97-27 for requesting and obtaining non-automatic advance consent for a change in method of accounting.

 

The 325-page revenue procedure covers dozens of accounting method changes. It also reiterates in detail the rules applicable to accounting method changes and the application process and specifies when audit protection is available for tax years prior to the year of the change.

 

The revenue procedure is generally effective for applications for automatic consent made on or after Jan. 10, 2011, for a year of change ending on or after April 30, 2010. It is effective for requests for non-automatic advance consent for a change in method of accounting on Forms 3115, Application for Change in Accounting Method, filed under Revenue Procedure 97-27 (as modified by subsequent revenue procedures) on or after Jan. 10, 2011, for a year of change ending on or after Jan. 10, 2011.The procedure also contains some transition rules for taxpayers who had timely filed an application for a change of accounting method on Form 3115 before Jan. 10, 2011, under prior procedures.

 

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