- news
- TAX
Automatic accounting method changes list updated by IRS
Related
Treasury posts preliminary list of jobs eligible for no tax on tips
Taxpayer’s circumstances do not warrant equitable tolling
When does debt become worthless?
In Rev. Proc. 2024-23, the IRS on Tuesday provided a comprehensive, updated list of changes in tax accounting methods to which the automatic change procedures in Rev. Proc. 2015-13, as subsequently modified, apply.
Rev. Proc. 2015-13 itself updated and revised prior general procedures under Sec. 446(e) to obtain the IRS’s consent to obtain automatic and advance nonautomatic consent to change a method of accounting. It has since been modified by Rev. Procs. 2015-33, 2016-1, 2017-59, 2021-26, 2021-34, 2022-14, and 2023-24.
The method changes in Rev. Proc. 2024-23 are arranged in 32 sections by Code section, covering a broad array of tax accounting methods.
The revenue procedure makes 21 significant changes to the list of automatic changes in Rev. Proc. 2023-24. In each case, the method change is described, including its applicability.
The description may also include conditions of inapplicability and additional requirements. Each method change is given a designated automatic accounting method change number for use in completing Form 3115, Application for Change in Accounting Method.
Rev. Proc. 2024-23 includes a list of the 21 significant modifications and clarifications it makes to the list of automatic changes in Rev. Proc. 2023-24. For example, Sections 12.01 and 12.02 are modified by adding subsections that provide that the change under each section does not apply to a taxpayer changing to or from the direct reallocation method or the step-allocation method. It also does not apply to a taxpayer using the direct reallocation method or step-allocation method that wishes to either make an election or revoke an election to use the Regs. Sec. 1.263A(g)(4)(ii) 90-10 de minimis rule to allocate a mixed service department’s costs to resale activities. Instead, this change must be requested under the nonautomatic change procedures provided in Rev. Proc. 2015-13.
Rev. Proc. 2024-23 is generally effective for Forms 3115 filed on or after April 30, 2024, for a year of change ending on or after Sept. 30, 2023, that is filed under the automatic change procedures of Rev. Proc. 2015-13, as clarified and modified.
— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.