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pdf3115
Form
(Rev. December 2003)
Application for Change in Accounting Method
OMB No. 1545-0152
Department of the Treasury
Internal Revenue Service
Name of filer (name of parent corporation if a consolidated group) (see instructions)
Identification number (see instructions)
Principal business activity code number (see instructions)
Number, street, and room or suite no. If a P.O. box, see the instructions.
Tax year of change begins (MM/DD/YYYY)
Tax year of change ends (MM/DD/YYYY)
City or town, state, and ZIP code
Name of contact person (see instructions)
Name of applicant(s) (if different than filer) and identification number(s) (see instructions)
Contact person’s telephone number
(
)
䊳
If the applicant is a member of a consolidated group, check this box
䊳
If Form 2848, Power of Attorney and Declaration of Representative, is attached, check this box
Check the appropriate box to indicate the type
Check the box to indicate the applicant.
of accounting method change being requested.
Cooperative (Sec. 1381)
Individual
(see instructions)
Partnership
Corporation
Controlled foreign corporation
S corporation
Depreciation or Amortization
(Sec. 957)
Insurance co. (Sec. 816(a))
Financial Products and/or Financial Activities of
Insurance co. (Sec. 831)
10/50 corporation (Sec. 904(d)(2)(E))
Financial Institutions
Qualified personal service
Other (specify) 䊳
Other (specify) 䊳
corporation (Sec. 448(d)(2))
Exempt organization. Enter Code section 䊳
Caution: The applicant must provide the requested information to be eligible for approval of the requested accounting method change. The
applicant may be required to provide information specific to the accounting method change such as an attached statement. The applicant
must provide all information relevant to the requested accounting method change, even if not specifically requested by the Form 3115.
Part I
1
Information For Automatic Change Request
Yes No
Enter the requested designated accounting method change number from the List of Automatic Accounting
Method Changes (see instructions). Enter only one method change number, except as provided for in the
instructions. If the requested change is not included in that list, check “Other,” and provide a description.
䊳
(a) Change No.
(b) Other
Description 䊳
2 Is the accounting method change being requested one for which the scope limitations of section 4.02 of Rev.
Proc. 2002-9 (or its successor) do not apply?
If “Yes,” go to Part II.
3 Is the tax year of change the final tax year of a trade or business for which the taxpayer would be required to
take the entire amount of the section 481(a) adjustment into account in computing taxable income?
If “Yes,” the applicant is not eligible to make the change under automatic change request procedures.
Note: Complete Part II below and then Part IV, and also Schedules A through E of this form (if applicable).
Part II
Information For All Requests
Yes No
4a Does the applicant (or any present or former consolidated group in which the applicant was a member during
the applicable tax year(s)) have any Federal income tax return(s) under examination (see instructions)?
If you answered “No,” go to line 5.
b Is the method of accounting the applicant is requesting to change an issue (with respect to either the applicant
or any present or former consolidated group in which the applicant was a member during the applicable tax
year(s)) either (i) under consideration or (ii) placed in suspense (see instructions)?
Signature (see instructions)
Under penalties of perjury, I declare that I have examined this application, including accompanying schedules and statements, and to the best of my
knowledge and belief, the application contains all the relevant facts relating to the application, and it is true, correct, and complete. Declaration of preparer
(other than applicant) is based on all information of which preparer has any knowledge.
Filer
Preparer (other than filer/applicant)
Signature and date
Signature of individual preparing the application and date
Name and title (print or type)
Name of individual preparing the application (print or type)
Name of firm preparing the application
For Privacy Act and Paperwork Reduction Act Notice, see the instructions.
Cat. No. 19280E
Form
3115
(Rev. 12-2003)
Form 3115 (Rev. 12-2003)
Part II
Page
Information For All Requests (continued)
2
Yes No
4c Is the method of accounting the applicant is requesting to change an issue pending (with respect to either the
applicant or any present or former consolidated group in which the applicant was a member during the applicable
tax year(s)) for any tax year under examination (see instructions)?
d Is the request to change the method of accounting being filed under the procedures requiring that the operating
division director consent to the filing of the request (see instructions)?
If “Yes,” attach the consent statement from the director.
e Is the request to change the method of accounting being filed under the 90-day or 120-day window period?
If “Yes,” check the box for the applicable window period and attach the required statement (see instructions).
90 day
120 day
f If you answered “Yes” to line 4a, enter the name and telephone number of the examining agent and the tax
year(s) under examination.
Telephone number 䊳
Tax year(s) 䊳
Name 䊳
g Has a copy of this Form 3115 been provided to the examining agent identified on line 4f?
5a Does the applicant (or any present or former consolidated group in which the applicant was a member during
the applicable tax year(s)) have any Federal income tax return(s) before Appeals and/or a Federal court?
Appeals officer and/or
counsel for the government,
If “Yes,” enter the name of the (check the box)
and the tax year(s) before Appeals and/or a Federal court.
Name 䊳
Telephone number 䊳
Tax year(s) 䊳
b Has a copy of this Form 3115 been provided to the Appeals officer and/or counsel for the government identified
on line 5a?
c Is the method of accounting the applicant is requesting to change an issue under consideration by Appeals
and/or a Federal court (for either the applicant or any present or former consolidated group in which the applicant
was a member for the tax year(s) the applicant was a member)?
If “Yes,” attach an explanation.
6 If the applicant answered “Yes” to line 4a and/or 5a with respect to any present or former consolidated group,
provide each parent corporation’s (a) name, (b) identification number, (c) address, and (d) tax year(s) during which
the applicant was a member that is under examination, before an Appeals office, and/or before a Federal court.
7
8
If the applicant is an entity (including a limited liability company) treated as a partnership or S corporation for
Federal income tax purposes, is it requesting a change from a method of accounting that is an issue under
consideration in an examination, before Appeals, or before a Federal court, with respect to a Federal income
tax return of a partner, member, or shareholder of that entity?
If “Yes,” the applicant is not eligible to make the change.
Is the applicant making a change to which audit protection does not apply (see instructions)?
9a Has the applicant, its predecessor, or a related party requested or made (under either an automatic change
procedure or a procedure requiring advance consent) a change in accounting method within the past 5 years
(including the year of the requested change)?
b If “Yes,” attach a description of each change and the year of change for each separate trade or business and
whether consent was obtained.
c If any application was withdrawn, not perfected, or denied, or if a Consent Agreement was sent to the taxpayer
but was not signed and returned to the IRS, or if the change was not made or not made in the requested year
of change, include an explanation.
10a Does the applicant, its predecessor, or a related party currently have pending any request (including any
concurrently filed request) for a private letter ruling, change in accounting method, or technical advice?
b If “Yes,” for each request attach a statement providing the name(s) of the taxpayer, identification number(s), the
type of request (private letter ruling, change in accounting method, or technical advice), and the specific issue(s)
in the request(s).
11
12
a
b
c
d
Is the applicant requesting to change its overall method of accounting?
If “Yes,” check the appropriate boxes below to indicate the applicant’s present and proposed methods of
accounting. Also, complete Schedule A on page 4 of the form.
Present method:
Cash
Accrual
Hybrid (attach description)
Proposed method:
Cash
Accrual
Hybrid (attach description)
If the applicant is not changing its overall method of accounting, attach a detailed and complete description
for each of the following:
The item(s) being changed.
The applicant’s present method for the item(s) being changed.
The applicant’s proposed method for the item(s) being changed.
The applicant’s present overall method of accounting (cash, accrual, or hybrid).
Form
3115
(Rev. 12-2003)
Form 3115 (Rev. 12-2003)
Part II
Page
Information For All Requests (continued)
3
Yes No
13
Attach a detailed and complete description of the applicant’s trade(s) or business(es), and the principal
business activity code for each. If the applicant has more than one trade or business as defined in
Regulations section 1.446-1(d), describe: whether each trade or business is accounted for separately; the
goods and services provided by each trade or business and any other types of activities engaged in that
generate gross income; the overall method of accounting for each trade or business; and which trade or
business is requesting to change its accounting method as part of this application or a separate application.
14
Will the proposed method of accounting be used for the applicant’s books and records and financial statements?
For insurance companies, see the instructions
If “No,” attach an explanation.
15a Has the applicant engaged, or will it engage, in a transaction to which section 381(a) applies (e.g., a reorganization,
merger, or liquidation) during the proposed tax year of change determined without regard to any potential closing
of the year under section 381(b)(1)?
b If “Yes,” for the items of income and expense that are the subject of this application, attach a statement identifying
the methods of accounting used by the parties to the section 381(a) transaction immediately before the date of
distribution or transfer and the method(s) that would be required by section 381(c)(4) or (c)(5) absent consent to
the change(s) requested in this application.
16
17
Does the applicant request a conference of right with the IRS National Office if the IRS proposes an adverse
response?
If the applicant is changing to or from the cash method or changing its method of accounting under sections
263A, 448, 460, or 471, enter the gross receipts of the 3 tax years preceding the year of change.
1st preceding
year ended: mo.
yr.
$
Part III
18
19
2nd preceding
year ended: mo.
$
yr.
3rd preceding
year ended: mo.
yr.
$
Information For Advance Consent Request
Yes No
Is the applicant’s requested change described in any revenue procedure, revenue ruling, notice, regulation, or
other published guidance as an automatic change request?
If “Yes,” attach an explanation describing why the applicant is submitting its request under advance consent
request procedures.
Attach a full explanation of the legal basis supporting the proposed method for the item being changed. Include
a detailed and complete description of the facts that explains how the law specifically applies to the applicant’s
situation and that demonstrates that the applicant is authorized to use the proposed method. Include all authority
(statutes, regulations, published rulings, court cases, etc.) supporting the proposed method. The applicant should
include a discussion of any authorities that may be contrary to its use of the proposed method.
20
21
22
Attach a copy of all documents related to the proposed change (see instructions).
Attach a statement of the applicant’s reasons for the proposed change.
If the applicant is a member of a consolidated group for the year of change, do all other members of the
consolidated group use the proposed method of accounting for the item being changed?
If “No,” attach an explanation.
23a Enter the amount of user fee attached to this application (see instructions). 䊳 $
b If the applicant qualifies for a reduced user fee, attach the necessary information or certification required by Rev.
Proc. 2003-1 (or its successor) (see instructions).
Part IV
24
25
26
27
Section 481(a) Adjustment
Yes No
Do the procedures for the accounting method change being requested require the use of the cut-off method?
If “Yes,” do not complete lines 25, 26, and 27 below.
Enter the section 481(a) adjustment. Indicate whether the adjustment is an increase (+) or a decrease (-) in
income. 䊳 $
Attach a summary of the computation and an explanation of the
methodology used to determine the section 481(a) adjustment. If it is based on more than one component, show
the computation for each component. If more than one applicant is applying for the method change on the same
application, attach a list of the name, identification number, principal business activity code (see instructions),
and the amount of the section 481(a) adjustment attributable to each applicant.
If the section 481(a) adjustment is an increase to income of less than $25,000, does the applicant elect to take
the entire amount of the adjustment into account in the year of change?
Is any part of the section 481(a) adjustment attributable to transactions between members of an affiliated
group, a consolidated group, a controlled group, or other related parties?
If “Yes,” attach an explanation.
Form
3115
(Rev. 12-2003)
Form 3115 (Rev. 12-2003)
Page
4
Schedule A—Change in Overall Method of Accounting (If Schedule A applies, Part I below must be completed.)
Part I
Change in Overall Method (see instructions)
1
Enter the following amounts as of the close of the tax year preceding the year of change. If none, state “None.” Also,
attach a statement providing a breakdown of the amounts entered on lines 1a through 1g.
Amount
a Income accrued but not received
b Income received or reported before it was earned. Attach a description of the income and the legal
basis for the proposed method
c Expenses accrued but not paid
d Prepaid expenses previously deducted
e Supplies on hand previously deducted and/or not previously reported
f Inventory on hand previously deducted and/or not previously reported. Complete Schedule D, Part II
g Other amounts (specify) 䊳
h Net section 481(a) adjustment (Combine lines 1a–1g.)
$
$
Yes
No
Is the applicant also requesting the recurring item exception under section 461(h)(3)?
Attach copies of the profit and loss statement (Schedule F (Form 1040) for farmers) and the balance sheet, if applicable, as
of the close of the tax year preceding the year of change. On a separate sheet, state the accounting method used when
preparing the balance sheet. If books of account are not kept, attach a copy of the business schedules submitted with the
Federal income tax return or other return (e.g., tax-exempt organization returns) for that period. If the amounts in Part I,
lines 1a through 1g, do not agree with those shown on both the profit and loss statement and the balance sheet, explain
the differences on a separate sheet.
2
3
Part II
Change to the Cash Method For Advance Consent Request (see instructions)
Applicants requesting a change to the cash method must attach the following information:
1 A description of inventory items (items whose production, purchase, or sale is an income-producing factor) and materials
and supplies used in carrying out the business.
2 An explanation as to whether the applicant is required to use the accrual method under any section of the Code or regulations.
Schedule B—Change in Reporting Advance Payments (see instructions)
1
If the applicant is requesting to defer advance payment for services under Rev. Proc. 71-21, 1971-2 C.B. 549, attach the
following information:
a Sample copies of all service agreements used by the applicant that are subject to the requested change in accounting
method. Indicate the particular parts of the service agreement that require the taxpayer to perform services.
b If any parts or materials are provided, explain whether the obligation to provide parts or materials is incidental (of minor or
secondary importance) to an agreement providing for the performance of personal services.
c If the change relates to contingent service contracts, explain how the contracts relate to merchandise that is sold, leased,
installed, or constructed by the applicant and whether the applicant offers to sell, lease, install, or construct without the
service agreement.
d A description of the method the applicant will use to determine the amount of income earned each year on service contracts
and why that method clearly reflects income earned and related expenses in each year.
e An explanation of how the method the applicant will use to determine the amount of gross receipts each year will be no less
than the amount included in gross receipts for purposes of its books and records. See section 3.11 of Rev. Proc. 71-21.
2
If the applicant is requesting a deferral of advance payments for goods under Regulations section 1.451-5, attach the
following information:
a Sample copies of all agreements for goods or items requiring advance payments used by the applicant that are subject to
the requested change in accounting method. Indicate the particular parts of the agreement that require the applicant to
provide goods or items.
b A statement providing that the entire advance payment is for goods or items. If not entirely for goods or items, a statement
that an amount equal to 95% of the total contract price is properly allocable to the obligation to provide activities described
in Regulations section 1.451-5(a)(1)(i) or (ii) (including services as an integral part of those activities).
c An explanation of how the method the applicant will use to determine the amount of gross receipts each year will be no less
than the amount included in gross receipts for purposes of its books and records. See Regulations section 1.451-5(b)(1).
Form
3115
(Rev. 12-2003)
Form 3115 (Rev. 12-2003)
Page
5
Schedule C—Changes Within the LIFO Inventory Method (see instructions)
Part I
General LIFO Information
Complete this section if the requested change involves changes within the LIFO inventory method. Also, attach a copy of all
Forms 970, Application To Use LIFO Inventory Method, filed to adopt or expand the use of the LIFO method.
1
Attach a description of the applicant’s present and proposed LIFO methods and submethods for each of the following
items:
a Valuing inventory (e.g., unit method or dollar-value method).
b Pooling (e.g., by line or type or class of goods, natural business unit, multiple pools, raw material content, simplified
dollar-value method, inventory price index computation (IPIC) pools, etc.).
c Pricing dollar-value pools (e.g., double-extension, index, link-chain, link-chain index, IPIC method, etc.).
d Determining the current year cost of goods in the ending inventory (e.g., most recent purchases, earliest acquisitions
during the year, average cost of purchases during the year, etc.).
2
If any present method or submethod used by the applicant is not the same as indicated on Form(s) 970 filed to adopt or
expand the use of the method, attach an explanation.
3
If the proposed change is not requested for all the LIFO inventory, specify the inventory to which the change is and is not
applicable.
4
If the proposed change is not requested for all of the LIFO pools, specify the LIFO pool(s) to which the change is
applicable.
5
Attach a statement addressing whether the applicant values any of its LIFO inventory on a method other than cost. For
example, if the applicant values some of its LIFO inventory at retail and the remainder at cost, the applicant should identify
which inventory items are valued under each method.
6
If changing to the IPIC method, attach a completed Form 970 and a statement indicating the indexes, tables, and
categories the applicant proposes to use.
Part II
Change in Pooling Inventories
1
If the applicant is proposing to change its pooling method or the number of pools, attach a description of the contents of,
and state the base year for, each dollar-value pool the applicant presently uses and proposes to use.
2
If the applicant is proposing to use natural business unit (NBU) pools or requesting to change the number of NBU pools,
attach the following information (to the extent not already provided) in sufficient detail to show that each proposed NBU was
determined under Regulations section 1.472-8(b)(1) and (2):
a A description of the types of products produced by the applicant. If possible, attach a brochure.
b A description of the types of processes and raw materials used to produce the products in each proposed pool.
c If all of the products to be included in the proposed NBU pool(s) are not produced at one facility, the applicant should explain
the reasons for the separate facilities, indicate the location of each facility, and provide a description of the products each
facility produces.
d A description of the natural business divisions adopted by the taxpayer. State whether separate cost centers are
maintained and if separate profit and loss statements are prepared.
e A statement addressing whether the applicant has inventories of items purchased and held for resale that are not further
processed by the applicant, including whether such items, if any, will be included in any proposed NBU pool.
f A statement addressing whether all items including raw materials, goods-in-process, and finished goods entering into the
entire inventory investment for each proposed NBU pool are presently valued under the LIFO method. Describe any items
that are not presently valued under the LIFO method that are to be included in each proposed pool.
g A statement addressing whether, within the proposed NBU pool(s), there are items both sold to unrelated parties and
transferred to a different unit of the applicant to be used as a component part of another product prior to final processing.
3
If the applicant is engaged in manufacturing and is proposing to use the multiple pooling method or raw material content
pools, attach information to show that each proposed pool will consist of a group of items that are substantially similar.
See Regulations section 1.472-8(b)(3).
4
If the applicant is engaged in the wholesaling or retailing of goods and is requesting to change the number of pools used,
attach information to show that each of the proposed pools is based on customary business classifications of the
applicant’s trade or business. See Regulations section 1.472-8(c).
Form
3115
(Rev. 12-2003)
Form 3115 (Rev. 12-2003)
Page
6
Schedule D—Change in the Treatment of Long-Term Contracts Under Section 460, Inventories, or Other
Section 263A Assets (see instructions)
Part I
Change in Reporting Income From Long-Term Contracts (Also complete Part III on pages 7 and 8.)
To the extent not already provided, attach a description of the applicant’s present and proposed methods for reporting income
and expenses from long-term contracts. If the applicant is a construction contractor, include a detailed description of its
construction activities.
2a Are the applicant’s contracts long-term contracts as defined in section 460(f)(1) (see instructions)?
Yes
No
b If “Yes,” do all the contracts qualify for the exception under section 460(e) (see instructions)?
Yes
No
If line 2b is “No,” attach an explanation.
c If line 2b is “Yes,” is the applicant requesting to use the percentage-of-completion method using cost-to-cost
Yes
No
under Regulations section 1.460-4(b)?
1
d If line 2c is “No,” is the applicant requesting to use the exempt-contract percentage-of-completion method
under Regulations section 1.460-4(c)(2)?
If line 2d is “Yes,” explain what cost comparison the applicant will use to determine a contract’s completion
factor.
If line 2d is “No,” explain what method the applicant is using and the authority for its use.
3a Does the applicant have long-term manufacturing contracts as defined in section 460(f)(2)?
b If “Yes,” explain the applicant’s present and proposed method(s) of accounting for long-term manufacturing
contracts.
c Describe the applicant’s manufacturing activities, including any required installation of manufactured goods.
4 To determine a contract’s completion factor using the percentage-of-completion method:
a Will the applicant use the cost-to-cost method in Regulations section 1.460-4(b)?
b If line 4a is “No,” is the applicant electing the simplified cost-to-cost method (see section 460(b)(3) and
Regulations section 1.460-5(c))?
5 Attach a statement indicating whether any of the applicant’s contracts are either cost-plus long-term
contracts or Federal long-term contracts.
Part II
1
2
3
Yes
No
Yes
No
Yes
No
Yes
No
Change in Valuing Inventories Including Cost Allocation Changes (Also complete Part III on pages 7 and 8.)
Attach a description of the inventory goods being changed.
Attach a description of the inventory goods (if any) NOT being changed.
If the applicant is subject to section 263A, is its present inventory valuation method in compliance with
section 263A (see instructions)?
Inventory Being Changed
Yes
No
Inventory Not
Being Changed
4a Check the appropriate boxes below.
Present method Proposed method Present method
Identification methods:
Specific identification
FIFO
LIFO
Other (attach explanation)
Valuation methods:
Cost
Cost or market, whichever is lower
Retail cost
Retail, lower of cost or market
Other (attach explanation)
b Enter the value at the end of the tax year preceding the year of change
5 If the applicant is changing from the LIFO inventory method to a non-LIFO method, attach the following information (see
instructions).
a Copies of Form(s) 970 filed to adopt or expand the use of the method.
b Only for applicants requesting advance consent. A statement describing whether the applicant is changing to the method
required by Regulations section 1.472-6(a) or (b), or whether the applicant is proposing a different method.
c Only for applicants requesting an automatic change. Attach the statement required by section 10.01(4) of the Appendix
of Rev. Proc. 2002-9 (or its successor).
Form
3115
(Rev. 12-2003)
7
Method of Cost Allocation (Complete this part if the requested change involves either property subject
to section 263A or long-term contracts as described in section 460 (see instructions).)
Form 3115 (Rev. 12-2003)
Part III
Page
Section A—Allocation and Capitalization Methods
Attach a description (including sample computations) of the present and proposed method(s) the applicant uses to capitalize direct
and indirect costs properly allocable to real or tangible personal property produced and property acquired for resale, or to allocate
and, where appropriate, capitalize direct and indirect costs properly allocable to long-term contracts. Include a description of the
method(s) used for allocating indirect costs to intermediate cost objectives such as departments or activities prior to the allocation
of such costs to long-term contracts, real or tangible personal property produced, and property acquired for resale. The description
must include the following:
1
2
3
The method of allocating direct and indirect costs (i.e., specific identification, burden rate, standard cost, or other
reasonable allocation method).
The method of allocating mixed service costs (i.e., direct reallocation, step-allocation, simplified service cost using the
labor-based allocation ratio, simplified service cost using the production cost allocation ratio, or other reasonable allocation
method).
The method of capitalizing additional section 263A costs (i.e., simplified production with or without the historic absorption
ratio election, simplified resale with or without the historic absorption ratio election including permissible variations, the
U.S. ratio, or other reasonable allocation method).
Section B—Direct and Indirect Costs Required To Be Allocated (Check the appropriate boxes in Section B showing the costs
that are or will be fully included, to the extent required, in the cost of real or tangible personal property produced or property
acquired for resale under section 263A or allocated to long-term contracts under section 460. Mark “N/A” in a box if those costs
are not incurred by the applicant. If a box is not checked, it is assumed that those costs are not fully included to the extent
required. Attach an explanation for boxes that are not checked.)
Present method Proposed method
1
2
3
4
5
6
7
8
9
10
Direct material
Direct labor
Indirect labor
Officers’ compensation (not including selling activities)
Pension and other related costs
Employee benefits
Indirect materials and supplies
Purchasing costs
Handling, processing, assembly, and repackaging costs
Offsite storage and warehousing costs
11
Depreciation, amortization, and cost recovery allowance for equipment and facilities placed in
service and not temporarily idle
Depletion
Rent
Taxes other than state, local, and foreign income taxes
Insurance
Utilities
Maintenance and repairs that relate to a production, resale, or long-term contract activity
Engineering and design costs (not including section 174 research and experimental
expenses)
Rework labor, scrap, and spoilage
Tools and equipment
Quality control and inspection
Bidding expenses incurred in the solicitation of contracts awarded to the applicant
Licensing and franchise costs
Capitalizable service costs (including mixed service costs)
Administrative costs (not including any costs of selling or any return on capital)
Research and experimental expenses attributable to long-term contracts
Interest
Other costs (Attach a list of these costs.)
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Form
3115
(Rev. 12-2003)
Form 3115 (Rev. 12-2003)
Part III
Page
8
Method of Cost Allocation (see instructions) (continued)
Section C—Other Costs Not Required To Be Allocated (Complete Section C only if the applicant is requesting to change its
method for these costs.)
Present method Proposed method
1
2
3
4
5
6
7
8
9
10
11
Marketing, selling, advertising, and distribution expenses
Research and experimental expenses not included on line 26 above
Bidding expenses not included on line 22 above
General and administrative costs not included in Section B above
Income taxes
Cost of strikes
Warranty and product liability costs
Section 179 costs
On-site storage
Depreciation, amortization, and cost recovery allowance not included on line 11 above
Other costs (Attach a list of these costs.)
Schedule E—Change in Depreciation or Amortization (see instructions)
Applicants requesting approval to change their method of accounting for depreciation or amortization complete this section.
Applicants must provide this information for each item or class of property for which a change is requested.
Note: See the List of Automatic Accounting Method Changes in the instructions for information regarding automatic changes
under sections 56, 167, 168, 197, 1400I, 1400L, or former section 168. Do not file Form 3115 with respect to certain late elections
and election revocations (see instructions).
Yes
No
Is depreciation for the property determined under Regulations section 1.167(a)-11 (CLADR)?
If “Yes,” the only changes permitted are under Regulations section 1.167(a)-11(c)(1)(iii).
2 Is any of the depreciation or amortization required to be capitalized under any Code section (e.g., section
263A)?
Yes
No
If “Yes,” enter the applicable section 䊳
3 Has a depreciation or amortization election been made for the property (e.g., the election under section
168(f)(1))?
Yes
No
If “Yes,” state the election made 䊳
4a To the extent not already provided, attach a statement describing the property being changed. Include in the description the
type of property, the year the property was placed in service, and the property’s use in the applicant’s trade or business or
income-producing activity.
1
Yes
No
b If the property is residential rental property, did the applicant live in the property before renting it?
c Is the property public utility property?
Yes
No
5 To the extent not already provided in the applicant’s description of its present method, explain how the property is treated
under the applicant’s present method (e.g., depreciable property, inventory property, supplies under Regulations section
1.162-3, nondepreciable section 263(a) property, property deductible as a current expense, etc.).
6 If the property is not currently treated as depreciable or amortizable property, provide the facts supporting the proposed
change to depreciate or amortize the property.
7 If the property is currently treated and/or will be treated as depreciable or amortizable property, provide the following
information under both the present (if applicable) and proposed methods:
a The Code section under which the property is or will be depreciated or amortized (e.g., section 168(g)).
b The applicable asset class from Rev. Proc. 87-56, 1987-2 C.B. 674, for each asset depreciated under section 168 (MACRS)
or under section 1400L; the applicable asset class from Rev. Proc. 83-35, 1983-1 C.B. 745, for each asset depreciated under
former section 168 (ACRS); an explanation why no asset class is identified for each asset for which an asset class has not
been identified by the applicant.
c The facts to support the asset class for the proposed method.
d The depreciation or amortization method of the property, including the applicable Code section (e.g., 200% declining balance
method under section 168(b)(1)).
e The useful life, recovery period, or amortization period of the property.
f The applicable convention of the property.
Form
3115
(Rev. 12-2003)
PAGER/SGML
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Instructions for Form 3115
Department of the Treasury
Internal Revenue Service
(Rev. May 2006)
(Use with the December 2003 revision of Form 3115)
Application for Change in Accounting Method
Section references are to the Internal Revenue Code unless
otherwise noted.
All references to Rev. Proc. 97-27 are to Rev. Proc. 97-27,
1997-21 I.R.B. 10 (as modified and amplified by Rev. Proc.
2002-19, 2002-13 I.R.B. 696, as amplified and clarified by Rev.
Proc. 2002-54, 2002-35 I.R.B. 432), or its successor.
All references to Rev. Proc. 2002-9 are to Rev. Proc.
2002-9, 2002-3 I.R.B. 327 (as modified and clarified by
Announcement 2002-17, 2002-8 I.R.B. 561, modified and
amplified by Rev. Proc. 2002-19, and amplified, clarified and
modified by Rev. Proc. 2002-54), or its successor.
section 9.17 of Rev. Proc. 2006-1. A user fee is required. See
the instructions for Part III on page 6 for more information.
For general rules on changing an accounting method under:
Automatic change
See Rev. Proc. 2002-9, as modified by
request procedures . . . Announcement 2002-17, Rev. Proc.
2002-19, and Rev. Proc. 2002-54.
Advance consent
See Rev. Proc. 97-27, as modified by
request procedures . . . Rev. Proc. 2002-19 and Rev. Proc.
2002-54.
For more information, see Rev. Proc. 2006-1, particularly section 9.
All references to Rev. Proc. 2006-1 are to Rev. Proc.
2006-1, 2006-1 I.R.B. 1, or its successor.
General Instructions
Purpose of Form
File Form 3115 to request a change in either an overall
accounting method or the accounting treatment of any item. File
a separate Form 3115 for each unrelated item or submethod,
unless the IRS specifically permits (in published guidance) a
change for more than one unrelated item or submethod to be
requested on a single Form 3115.
Two procedures exist under which an applicant may request
a change in accounting method:
Automatic Change Request. Unless otherwise provided in
published guidance, you must file under the automatic change
request procedures if (a) the accounting method change is
included in those procedures for the requested year of change,
and (b) you are within the scope of those procedures for the
requested year of change (see Automatic Change Request
Scope Limitations on page 4). A Form 3115 filed under these
procedures may be reviewed by the IRS and you will be notified
if information in addition to that requested on Form 3115 is
required or if your request is denied. No user fee is required. An
applicant that timely files and complies with an automatic
change request procedure is granted consent to change its
accounting method, subject to review by the IRS National Office
and operating division director. See the instructions for Part I on
page 4 for more information and the List of Automatic
Accounting Method Changes beginning on page 9.
Advance Consent Request. If you are not within the scope
of the automatic change request procedures for the requested
year of change or the accounting method change you are
requesting is not included in those procedures for the requested
year of change, you may be able to file under the advance
consent request procedures (see Advance Consent Request
Scope Limitations on page 6). If the requested change is
approved, the filer will receive a letter ruling on the requested
change. A taxpayer may not take an advance consent change
in accounting method into account in any federal income tax
return until the taxpayer receives the letter ruling granting
permission to make the accounting method change and the
taxpayer signs and returns the Consent Agreement copy of that
letter ruling. See Regulations section 1.446-1(e)(2)(i) and
When filing Form 3115, applicants must determine if the IRS
has published an accounting method revenue procedure,
revenue ruling, notice, regulation, or other published guidance
relating to the specific method the applicant is requesting to
change. This guidance is published in the Internal Revenue
Bulletin. For years after 1995, Internal Revenue Bulletins are
available at www.irs.gov.
For more information, see Pub. 538, Accounting Periods and
Methods.
Who Must File
Generally, a Form 3115 must be filed by or on behalf of each
applicant seeking consent to change an accounting method. An
“applicant” is a taxpayer or a separate and distinct trade or
business of a taxpayer (for purposes of Regulations section
1.446-1(d)), including a qualified subchapter S subsidiary
(QSUB) or a single-member limited liability company
(single-member LLC), whose accounting method is being
changed.
For a consolidated group of corporations, the parent
corporation must file the Form 3115 for a change in accounting
method for itself or any member of the consolidated group. For
a controlled foreign corporation (CFC) or 10/50 corporation
without a U.S. trade or business, the Form 3115 must be filed,
respectively, by the controlling U.S. shareholder(s) or majority
domestic corporate shareholder(s). If the U.S. shareholder(s) is
a member of a consolidated group, the parent corporation must
file Form 3115 for the U.S. shareholder on behalf of the foreign
corporation.
Generally, a separate Form 3115 must be filed for each
applicant that is part of a related group of corporations or that is
a separate and distinct trade or business of a taxpayer,
including a QSUB or single-member LLC. However, a single
Form 3115 may be filed for multiple applicants in the following
situations.
1. A taxpayer requesting an identical accounting method
change for two or more separate and distinct trades or
businesses (for purposes of Regulations section 1.446-1(d)) of
that taxpayer, including a QSUB or single-member LLC;
2. A common parent of a consolidated group requesting an
identical accounting method change on behalf of two or more
members of the consolidated group;
Cat. No. 63215H
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3. A common parent of a consolidated group requesting an
identical accounting method change on behalf of two or more
CFCs that do not engage in a trade or business within the
United States where all controlling U.S. shareholders of the
CFCs are members of the consolidated group; or
4. A taxpayer requesting an identical accounting method
change on behalf of two or more CFCs that do not engage in a
trade or business within the United States for which the
taxpayer is the sole controlling U.S. shareholder of the CFCs.
an acknowledgement has not been received within 60 days of
filing Form 3115, the filer of an advance consent request can
inquire to: Internal Revenue Service, Control Clerk, CC:IT&A,
Room 4516, 1111 Constitution Ave., NW, Washington, DC
20224.
Note: The IRS does not send acknowledgements for automatic
change requests.
Late Application
In general, a taxpayer that fails to timely file a Form 3115 will
not be granted an extension of time to file except in unusual
and compelling circumstances. See Regulations section
301.9100-3 for the standards that must be met. For information
on the period of limitations, see section 5.03(2) of Rev. Proc.
2006-1.
However, a limited 6-month extension of time to file Form
3115 is sometimes available for automatic change requests.
For details, see section 6.02(3)(b) of Rev. Proc. 2002-9 and
Regulations section 301.9100-2.
A taxpayer submitting a ruling request for an extension of
time to file Form 3115 must pay a user fee for its extension
request and, in the case of an advance consent request, also a
separate user fee for its accounting method change request.
For the schedule of user fees, see (A)(3)(b) and (A)(5)(d) in
Appendix A of Rev. Proc. 2006-1.
See section 15.07(4) of Rev. Proc. 2006-1 for what is an
identical accounting method change.
When and Where To File
Automatic change requests. A Form 3115 that is filed under
the automatic change request procedures is filed in duplicate.
The original must be attached to the filer’s timely filed
(including extensions) federal income tax return for the year of
change. A copy of the Form 3115 must be filed with the IRS
National Office (see below) no earlier than the first day of the
year of change and no later than when the original is filed with
the federal income tax return for the year of change. See also
Late Application below and the instructions for lines 4d and 4e
on page 5.
Advance consent requests. A Form 3115 that is filed under
the advance consent request procedures must be filed during
the tax year for which the change is requested. If the tax year is
a short period, file Form 3115 by the last day of the short tax
year. File the Form 3115 with the IRS National Office (see
below). Form 3115 should be filed as early as possible during
the year of change to provide adequate time for the IRS to
respond prior to the due date of the filer’s return for the year of
change. See also Late Application below and the instructions
for lines 4d and 4e on page 5.
Specific Instructions
Name(s) and Signature(s)
Enter the name of the filer on the first line of page 1 of Form
3115. In the case of an advance consent request, the Form
3115 and any attached statements required to be signed must
be signed and dated by, or on behalf of, the filer. In the case of
an automatic consent request, the copy of the Form 3115 that is
sent to the IRS National Office must be signed and dated by, or
on behalf of, the filer; the Form 3115 attached to the income tax
return (including any additional statements) does not need to be
signed. The name and signature requirements are discussed
below.
In general, the filer of the Form 3115 is the applicant.
However, for certain corporations discussed in the following
paragraphs, Form 3115 is filed on behalf of the applicant. If
such an exception applies, enter the filer’s name and
identification number on the first line of Form 3115 and enter
the applicant’s name and identification number on the fourth
line. If Form 3115 is filed for multiple applicants in a
consolidated group of corporations, multiple controlled foreign
corporations (CFCs), or multiple separate and distinct trades or
businesses of a taxpayer (including QSUBs or single-member
LLCs), attach a schedule listing each applicant and its
identification number (where applicable). This schedule may be
combined with the information requested for Part III, line 23a
(regarding the user fee) and Part IV (section 481(a)
adjustment). If multiple names and signatures are required (for
example, in the case of CFCs — see instructions on page 3),
attach a schedule labeled “SIGNATURE ATTACHMENT” to the
Form 3115, signed under penalties of perjury using the same
language as in the declaration on page 1 of Form 3115.
Receivers, trustees, or assignees must sign any Form 3115
they are required to file.
Individuals. If Form 3115 is filed for a husband and wife who
file a joint income tax return, enter the names of both on the first
line and the signatures of both on the signature line.
Partnerships. Enter the name of the partnership on the first
line of Form 3115. In the signature section of Form 3115, enter
the signature of one of the general partners or limited liability
File Form 3115 at the applicable IRS address listed below.
For applicants (other than exempt organizations)
filing . . .
An advance consent request The National Office copy of an
automatic change request
Delivery Internal Revenue Service
by mail Attn: CC:PA:LPD:DRU
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044
Internal Revenue Service
Attn: CC:PA:LPD:DRU
(Automatic Rulings Branch)
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044
Delivery
by
private
delivery
service
Internal Revenue Service
Attn: CC:PA:LPD:DRU
(Automatic Rulings Branch)
Room 5336
1111 Constitution Ave., NW
Washington, DC 20224
Internal Revenue Service
Attn: CC:PA:LPD:DRU
Room 5336
1111 Constitution Ave., NW
Washington, DC 20224
For exempt organizations filing an advance consent request or the
National Office copy of an automatic change request . . .
By mail . . . . . . . . . . . . . . . . . . By private delivery service. . .
Internal Revenue Service
Tax Exempt & Government Entities
Attn: TEGE:EO
P.O. Box 27720
McPherson Station
Washington, DC 20038
Internal Revenue Service
Tax Exempt & Government Entities
Attn: TEGE:EO
1750 Pennsylvania Ave., NW
Washington, DC 20038
The IRS normally acknowledges receipt of a filed Form 3115
for an advance consent request within 60 days after receipt. If
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company members authorized to sign and that person’s name
and title below the signature.
Corporations, personal service corporations, S
corporations, cooperatives, and insurance companies.
Enter the name of the filer on the first line of Form 3115. In the
signature section of Form 3115, enter the signature of the
officer authorized to sign and the officer’s name and title below
the signature.
Consolidated group of corporations. Enter the name of the
parent corporation on the first line of Form 3115. Also enter the
name(s) of the applicant(s) on the fourth line of Form 3115 if a
member of the consolidated group other than, or in addition to,
the parent corporation is requesting an accounting method
change. Only an officer authorized to sign for the parent
corporation may sign Form 3115.
Controlled foreign corporations (CFCs). For a CFC with a
U.S. trade or business, use the same rules as other
corporations. For a CFC that does not have a U.S. trade or
business, enter the name(s) of the controlling U.S.
shareholder(s) of the CFC on the first line of Form 3115 and the
name of the CFC on the fourth line. All of the controlling U.S.
shareholders must sign Form 3115.
However, if any controlling U.S. shareholder is a member of
a consolidated group, enter the name of the shareholder’s
parent corporation rather than the shareholder’s name on the
first line of Form 3115. A person authorized to sign for the
shareholder’s parent corporation must sign Form 3115.
10/50 corporations. For a 10/50 corporation with a U.S. trade
or business, use the same rules as other corporations. For a
10/50 corporation that does not have a U.S. trade or business,
enter the name(s) of the majority domestic corporate
shareholder(s) on the first line of Form 3115 and the name of
the 10/50 corporation on the fourth line. A person authorized to
sign for each of the majority domestic corporate shareholders
must sign Form 3115.
However, if any majority domestic corporate shareholder is a
member of a consolidated group, enter the name of the
shareholder’s parent corporation rather than the shareholder’s
name on the first line of Form 3115. A person authorized to sign
for the shareholder’s parent corporation must sign Form 3115.
Estates or trusts. Enter the name of the estate or trust on the
first line of Form 3115. In the signature section of Form 3115,
enter the signature of the fiduciary, personal representative,
executor, administrator, etc., having legal authority to sign and
that person’s name and official title below the signature.
Exempt organizations. Enter the name of the organization on
the first line of Form 3115. In the signature section of Form
3115 enter the signature of a principal officer or other person
authorized to sign and that person’s name and official title
below the signature.
Preparer (other than filer/applicant). If the individual
preparing the Form 3115 is not the filer or applicant, the
preparer also must sign. However, in the case of an automatic
change request, the Form 3115 attached to the income tax
return does not need to be signed.
of the applicant on the fourth line if a member of the
consolidated group other than, or in addition to, the parent
corporation is requesting the accounting method change.
If Form 3115 is filed on behalf of a CFC or 10/50 corporation,
and the foreign corporation does not have an EIN, it does not
have to obtain one. Instead, enter “N/A” next to the CFC’s or
10/50 corporation’s name on the fourth line.
Principal Business Activity Code
If the filer is a business, enter the six-digit principal business
activity (PBA) code of the filer. The principal business activity of
the filer is the one generating the largest percentage of its total
receipts. The PBA code is based on the North American
Industry Classification System (NAICS) codes. See the
instructions for the income tax return of the filer for the filer’s
PBA code and definition of “total receipts.”
Note: An applicant requesting to change its accounting method
under designated automatic accounting method change
numbers 33 and/or 51 in the List of Automatic Accounting
Method Changes beginning on page 9 must attach a schedule
to the Form 3115 listing the detailed NAICS code associated
with the applicant’s principal business activity. See Rev. Proc.
2002-28, 2002-18 I.R.B. 815, for further guidance.
Address
Include the suite, room, or other unit number after the street
address. If the Post Office does not deliver mail to the street
address and the filer has a P.O. box, show the box number
instead of the street address.
Contact Person
The contact person must be an individual authorized to sign
Form 3115, or the filer’s authorized representative. If this
person is someone other than an individual authorized to sign
Form 3115, you must attach Form 2848, Power of Attorney and
Declaration of Representative.
An individual authorized to represent the filer before the IRS,
to receive a copy of the requested letter ruling, or to perform
any other act(s), must properly reflect the authorization on Form
2848. For further details for an authorized representative and a
power of attorney, see section 9.03(8) and (9) of Rev. Proc.
2006-1.
Note: A filer that wants to receive correspondence regarding its
Form 3115 (for example, additional information letters or the
letter ruling) by fax must attach to the Form 3115 a statement
requesting this service. The attachment must also list the
authorized name(s) and fax number(s) of the person(s) who are
to receive the fax. The person(s) must be authorized to sign
Form 3115 or an authorized representative of the filer that is
included on Form 2848. For further details on the fax
procedures, see section 9.04(3) of Rev. Proc. 2006-1.
Type of Accounting Method Change
Requested
Check the appropriate box described below indicating the type
of change being requested.
• Depreciation or amortization. Check this box for a change
in the (a) computation of depreciation or amortization (for
example, the depreciation method or recovery period), (b)
treatment of salvage proceeds or costs of removal, (c) method
of accounting for retirements of depreciable property, or (d)
treatment of depreciable property from a single asset account to
a multiple asset account (pooling), or vice versa.
• Financial products and/or financial activities of financial
institutions. Check this box for a change in the treatment of a
financial product (for example, accounting for debt instruments,
derivatives, mark-to-market accounting, etc.), or in the financial
Identification Number
Enter the filer’s taxpayer identification number on the first line of
Form 3115.
Individuals enter their social security number (SSN) (or
individual taxpayer identification number (ITIN) for a resident or
nonresident alien). If the Form 3115 is for a husband and wife
who file a joint return, enter the identification numbers of both.
For all others, enter the employer identification number
(EIN).
For a consolidated group of corporations enter the EIN of the
parent corporation on the first line of Form 3115. Enter the EIN
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activities of a financial institution (for example, a lending
institution, a regulated investment company, a real estate
investment trust, a real estate mortgage investment conduit,
etc.).
• Other. For advance consent requests, check this box if
neither of the above boxes applies to the requested change.
State the type of method change being requested and, in the
space provided, enter a short description of the change (for
example, LIFO to FIFO, change within section 263A costs,
deduction of warranty expenses, changes to the completed
contract method for long-term contracts, etc.). For automatic
change requests, this informational requirement is satisfied by
properly completing Part I, line 1 of Form 3115.
5. The applicant engages in a transaction to which section
381(a) applies within the proposed tax year of change. For
more information, including exceptions to this limitation, see
section 4.02(7) of Rev. Proc. 2002-9.
6. The applicant is in the final tax year of its trade or
business as described in sections 4.02(8) and 5.04(3)(c) of
Rev. Proc. 2002-9.
Line 1. Enter the designated automatic accounting method
change number on line 1(a). These numbers may be found in
the List of Automatic Accounting Method Changes
beginning on page 9, or in subsequently published guidance. In
general, enter a number for only one change. However, in
certain limited circumstances, the numbers for two changes
may be entered on line 1(a). The List of Automatic
Accounting Method Changes specifies which requests for
change in accounting method may be made with another
request for change.
Follow the instructions below to correctly complete Form
TIP 3115.
• Applicants requesting to change an accounting method using
the automatic change request procedures must complete Parts
I, II, and IV.
• Applicants requesting a change to an accounting method
using the advance consent request procedures must complete
Parts II, III, and IV.
• All applicants must complete Schedules A, B, C, D, and E,
as applicable, for the change in accounting method requested.
• Attachments submitted with Form 3115 must show the filer’s
name and identification number. Also, indicate that the
information is an attachment to Form 3115.
• Report amounts in U.S. dollars, translated, if necessary,
from functional currency with a statement of exchange rates
used.
• If more room is needed to respond to any line, attach a
schedule labeled with the line number providing the applicable
information.
If the accounting method change is not included in the List
of Automatic Accounting Method Changes or assigned a
number in the published guidance providing the automatic
accounting method change, the filer should check the box for
line 1(b) and identify the revenue procedure or other published
guidance under which the accounting method change is being
requested.
Filers who properly complete line 1 have fulfilled the label
requirements of section 6.02(4)(a) of Rev. Proc. 2002-9 and
any similar requirements in other guidance.
Line 2. An applicant filing under the automatic change request
procedures should review the applicable accounting method
change section in the Appendix of Rev. Proc. 2002-9, or the
procedures in other published guidance, if applicable, to
determine if the scope limitations of section 4.02 of Rev. Proc.
2002-9, as modified by Rev. Proc. 2002-19, are inapplicable to
the specific change in accounting method requested.
Line 2 is asking whether the scope limitations do not apply
to the accounting method change being requested. By
answering “Yes” on line 2, the applicant is stating that the
Appendix of Rev. Proc. 2002-9 or the procedures in other
published guidance specifically state that the scope limitations
are not applicable to the requested accounting method change.
However, the applicant must complete all the lines in Part II,
Information For All Requests. If any of the scope limitations
apply to the requested accounting method change and apply to
the applicant, the applicant may not request an automatic
accounting method change. However, the applicant may be
eligible to request its change under the advance consent
request procedures. See Part III — Information For Advance
Consent Request on page 6 of these instructions to determine
if these procedures apply to the applicant. The descriptions of
the automatic changes in the List of Automatic Accounting
Method Changes indicate whether, with respect to a particular
change, scope limitations may not apply. Refer to section 4 of
Rev. Proc. 2002-9, as modified by Rev. Proc. 2002-19, for
specific requirements regarding scope limitations.
Part I—Information For Automatic
Change Request
Automatic Change Request Scope Limitations
An applicant may not be eligible to use the automatic change
request procedures with respect to an automatic change
provided by Rev. Proc. 2002-9 (either in the Appendix or
included by reference in other published guidance) if any of the
following six scope limitations (section 4.02 of Rev. Proc.
2002-9 as modified by Rev. Proc. 2002-19) apply at the time
the copy of the Form 3115 would be filed with the IRS National
Office and if any of the scope limitations are applicable to the
requested automatic accounting method change as described
in the applicable section of the Appendix of Rev. Proc. 2002-9
or other published guidance.
1. The applicant is under examination, except as provided in
section 4.02(1) of Rev. Proc. 2002-9.
2. The applicant is (or was formerly) a member of a
consolidated group that is under examination, or before an
Appeals office, or before a Federal court for the tax year(s) the
applicant was a member of the group. For more information,
see section 4.02(4) of Rev. Proc. 2002-9.
3. In the case of a partnership or S corporation, the
accounting method the applicant is requesting to change is an
issue under consideration in an examination, or by an Appeals
office, or before a Federal court with respect to a partner,
member, or shareholder of the applicant. For more information,
see section 4.02(5) of Rev. Proc. 2002-9.
4. The applicant made or applied to make the same change
in accounting method within the last 5 tax years, including the
year of change. For more information, see section 4.02(6) of
Rev. Proc. 2002-9.
Line 3. If the applicant would be required by section 5.04(3)(c)
of Rev. Proc. 2002-9 to take the entire amount of the section
481(a) adjustment into account in computing taxable income for
the year of change, and if section 4.02(8) of Rev. Proc. 2002-9
applies to the applicant’s accounting method change request,
the applicant is not eligible to make the change under automatic
change request procedures.
Part II—Information For All Requests
Note: For lines 4a, 4b, 4c, 5a, 5c, and 6, the reference to
“applicant” includes the applicant and any present or former
consolidated group in which the applicant was a member during
the applicable tax year(s). A reference to “applicable tax
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year(s)” includes any tax years for which the applicant’s present
or former consolidated group is under examination, before an
Appeals office, and/or before a Federal court if the applicant
was a member of the group in those tax years. For each of the
applicable lines (4a, 4b, 4c, 5a, 5c, and/or 6), attach to the
Form 3115 a list of the beginning and ending dates of the tax
year(s) that the applicant (including its present and former
consolidated group) is under examination, before an Appeals
office, and/or before a Federal court. If the method of
accounting the applicant is requesting to change is an issue
either under consideration, placed in suspense, or pending for
any tax year under examination, or if the method of accounting
the applicant is requesting to change is an issue under
consideration by an Appeals office or by a Federal court,
indicate the applicable tax year(s).
Line 4a. The applicant is under examination if it has a federal
income tax return under examination on the date the Form 3115
is filed. For the definition of “under examination,” see section
3.07 of Rev. Proc. 97-27 or section 3.08 of Rev. Proc. 2002-9,
both as modified by Rev. Proc. 2002-19, as applicable.
statement, see section 6.01(2) of Rev. Proc. 97-27 or 6.03(2) of
Rev. Proc. 2002-9, as applicable.
• 120-day window period. This exception applies during the
120-day period following the date an examination ends
regardless of whether a subsequent examination has
commenced. For the definition of when an examination ends,
see section 3.07 of Rev. Proc. 97-27 or section 3.08 of Rev.
Proc. 2002-9, as applicable. The 120-day window period
exception does not apply if the method the applicant is
requesting to change is an issue under consideration or placed
in suspense by the examining agent. Applicants should include
the ending date of the examination that qualifies the applicant to
file under the 120-day window. For further details, including the
required statement, see section 6.01(3) of Rev. Proc. 97-27 or
section 6.03(3) of Rev. Proc. 2002-9, as applicable.
Line 5a. If the applicant has any federal income tax return
before an Appeals office and/or a Federal court, refer to
sections 6.02 and 6.03 of Rev. Proc. 97-27 or sections 6.04 and
6.05 of Rev. Proc. 2002-9, both as modified by Rev. Proc.
2002-19, as applicable.
Line 5c. Except as otherwise provided in published guidance,
an applicant that is requesting to change a method of
accounting that is an issue under consideration by an Appeals
office and/or a Federal court will not receive audit protection for
the requested change. For further details, see sections 6.02
and 6.03 of Rev. Proc. 97-27 or 6.04 and 6.05 of Rev. Proc.
2002-9, both as modified by Rev. Proc. 2002-19, as applicable.
Line 6. The information requested on line 6 may be provided in
an attachment that includes the information requested on line 4f
and/or line 5a, as applicable.
Line 8. Indicate the lack of audit protection by checking the
“Yes” box. An applicant filing under the automatic change
request procedures should review the applicable accounting
method change section in the Appendix of Rev. Proc. 2002-9,
or the procedures in other published guidance, if applicable, to
determine if, under the specific change in accounting method
requested, the applicant will not receive audit protection in
connection with the change. Applicants filing under either the
automatic change or advance consent request procedures must
also indicate lack of audit protection for their change if audit
protection does not apply under the provisions of sections
6.01(5), 6.02, or 6.03 of Rev. Proc. 97-27, or under sections
6.03(6), 6.04, or 6.05 of Rev. Proc. 2002-9, both as modified by
Rev. Proc. 2002-19.
Line 9. For further details, see section 9.03(6)(a) of Rev. Proc.
2006-1 and either section 8.05 of Rev. Proc. 97-27 or section
4.02(6) of Rev. Proc. 2002-9, as applicable.
Line 10. For further details, see section 9.03(6)(b) of Rev.
Proc. 2006-1.
Line 13. Each applicant, including each member of a
consolidated group and each eligible CFC filing a single Form
3115 requesting the identical accounting method change, must
attach a schedule describing its trade(s) or business(es) for
each separate and distinct trade or business of the applicant,
including any QSUB or single-member LLC. For guidance
regarding the phrase “separate and distinct trade or business,”
see Regulations section 1.446-1(d). Entering the PBA code in
the box at the top of page 1 satisfies the requirement to submit
the PBA code for each trade or business.
Line 14. Insurance companies must also state whether the
proposed method of accounting will be used for annual
statement accounting purposes.
Line 16. For details on requesting and scheduling a conference
of right, see sections 9.04(4) and 10 of Rev. Proc. 2006-1.
Line 17. For an applicant changing to or from the cash method
or changing its method of accounting under sections 263A, 448,
460, or 471, enter the gross receipts, as determined under the
Line 4b. The applicant’s method of accounting is an issue
under consideration if the applicant receives written notification
from the examining agent specifically citing the treatment of the
item as an issue under consideration. For further details, see
section 3.08 of Rev. Proc. 97-27 or section 3.09 of Rev. Proc.
2002-9, as applicable. The applicant’s method of accounting is
an issue placed in suspense if the examining agent has given
the applicant written notification that the issue is placed in
suspense.
Line 4c. The applicant’s method of accounting is an issue
pending if the IRS has given the applicant written notification
indicating that an adjustment is being made or will be proposed
with respect to the applicant’s method of accounting for the tax
year(s) under examination. Attach a copy of this written
notification to Form 3115. For further details, see section
6.01(5) of Rev. Proc. 97-27 or section 6.03(6) of Rev. Proc.
2002-9, both as modified by Rev. Proc. 2002-19, as applicable.
Line 4d. A taxpayer under examination may request to change
an accounting method if the operating division director consents
to the filing of the Form 3115. The operating division director
will consent to the filing of the Form 3115 unless, in the opinion
of the operating division director, the method of accounting to
be changed would ordinarily be included as an item of
adjustment in the year(s) for which the applicant is under
examination. The applicant should submit its request for the
consent of the operating division director to the examining
agent. If the operating division director consents to the filing of
the Form 3115, the consent must be attached to the Form 3115
filed with the IRS National Office. Also, the applicant must
submit the operating division director copy of Form 3115 to the
examining agent at the same time the Form 3115 is filed with
the IRS National Office. For applicants filing under the
automatic change request procedures, attach to the Form 3115
submitted with the filer’s income tax return a written statement
certifying that (a) the written consent was obtained from the
director and (b) the applicant will retain a copy of the consent
for inspection by the IRS. For further details, see section
6.01(4) of Rev. Proc. 97-27 or section 6.03(4) of Rev. Proc.
2002-9, as applicable.
Line 4e. The following exceptions apply to the “under
examination” scope limitations:
• 90-day window period. This exception applies during the
first 90 days of any tax year if the applicant has been under
examination for at least 12 consecutive months as of the first
day of the tax year. The 90-day window period exception does
not apply if the method the applicant is requesting to change is
an issue under consideration or placed in suspense by the
examining agent. For further details, including the required
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applicable Code section, of the applicant and other taxpayers,
as applicable.
distinct trades or businesses (for purposes of Regulations
section 1.446-1(d)), including QSUBs or single-member LLCs;
2. A common parent corporation requesting the identical
accounting method change on a single Form 3115 on behalf of
two or more members of the consolidated group;
3. A common parent requesting the identical accounting
method change on a single Form 3115 on behalf of two or more
CFCs that do not engage in a trade or business within the
United States where all controlling U.S. shareholders of the
CFCs are members of the consolidated group; or
4. A taxpayer requesting an identical accounting method
change on a single Form 3115 on behalf of two or more CFCs
that do not engage in a trade or business within the United
States for which the taxpayer is the sole controlling U.S.
shareholder of the CFCs.
Part III—Information For Advance
Consent Request
Advance Consent Request Scope Limitations
An applicant may not use the advance consent request
procedures if any of the following four scope limitations apply at
the time the Form 3115 would be filed with the IRS National
Office. See Rev. Proc. 97-27 as modified by Rev. Proc.
2002-19.
1. The change in accounting method is required to be made
pursuant to a published automatic change procedure. For more
information, see section 4.02(1) of Rev. Proc. 97-27.
2. The applicant is under examination, except as provided in
section 4.02(2) of Rev. Proc. 97-27, as modified by Rev. Proc.
2002-19.
3. The applicant is (or was formerly) a member of a
consolidated group that is under examination, or before an
Appeals office, or before a Federal court for the tax year(s) the
applicant was a member of the group. For more information,
see section 4.02(5) of Rev. Proc. 97-27.
4. In the case of a partnership or S corporation, the
accounting method the applicant is requesting to change is an
issue under consideration in an examination, or by an Appeals
office, or before a Federal court with respect to a partner,
member, or shareholder of the applicant. For more information,
see section 4.02(6) of Rev. Proc. 97-27.
If any of the situations listed above apply, the user fee in
section (A)(3)(b)(i) or section (A)(4) of Appendix A of Rev. Proc.
2006-1, as applicable, must be paid for the first member of the
consolidated group, CFC, or separate and distinct trade or
business, and the reduced user fee in section (A)(5)(b) of
Appendix A must be paid for each additional member of the
group, CFC, or separate and distinct trade or business. If a filer
qualifies for a reduced user fee under section (A)(5)(b) of
Appendix A, the filer must submit the additional information
required by section 15.07 of Rev. Proc. 2006-1. A user fee is
only required for members of the group, CFCs, or separate and
distinct trades or businesses requesting the accounting method
change. See section 15.07(4) of Rev. Proc. 2006-1 for what
qualifies as an identical accounting method change.
Filers whose gross income is less than the amounts
specified in (A)(4) in Appendix A of Rev. Proc. 2006-1 qualify
for a reduced user fee. For the definition of gross income, see
(B)(2), (3), and (4) in Appendix A of Rev. Proc. 2006-1. If the
filer qualifies for the reduced user fee under this provision, the
filer must attach to the Form 3115 the representation required
by (B)(1) in Appendix A of Rev. Proc. 2006-1.
For information on user fees for tax-exempt organizations,
see Rev. Proc. 2006-8, 2006-1 I.R.B. 245 (or its successor).
The user fee (check or money order payable to the Internal
Revenue Service) must be attached to the Form 3115 that is
filed with the IRS National Office.
Line 18. If the requested change is covered by an automatic
change request procedure, and the procedure applies to the
applicant for the requested year of change, the applicant is not
eligible to file an advance consent request. If the requested
change is covered by an automatic change request procedure,
explain why the applicant is requesting to make the change
under advance consent request procedures.
Line 19. For further details on what is to be included in the
attachment, see sections 9.03(1) (facts and other information),
9.03(4) (analysis of material facts), 7.01(8) and 9.03(1)
(statement of supporting authorities), 9.03(2) (statement of
contrary authorities), and 9.03(7) (statement identifying pending
legislation) of Rev. Proc. 2006-1.
Part IV—Section 481(a) Adjustment
Line 20. True copies of all contracts, agreements, and other
documents directly related to the proposed accounting method
change must be submitted with the request. See section 9.03(3)
of Rev. Proc. 2006-1.
Line 24. Ordinarily, an adjustment under section 481(a) is
required for accounting method changes. However, for certain
accounting method changes, the taxpayer must use the cut-off
method. In those cases there is no section 481(a) adjustment.
Line 25. Attach a schedule showing the section 481(a)
adjustment for each applicant included in the Form 3115. This
schedule may be combined with the information requested on
the fourth line on page 1 (list of applicants and their
identification numbers) and on line 23 (user fee). Include a
summary of the computation of the section 481(a) adjustment
and an explanation of the methodology used to determine it. If
the section 481(a) adjustment is based on more than one
component of the accounting method being changed, include a
summary of the computation for each component. The
summary of the computation and explanation of the section
481(a) adjustment need not be extensive but should be
sufficient to demonstrate that the section 481(a) adjustment is
being computed correctly.
Entering the PBA code in the box at the top of page 1
satisfies the requirement to submit the PBA code for each
applicant.
Example. Under its present method, XYZ Corporation is
deducting certain costs that are required to be capitalized into
inventory under section 263A. XYZ Corporation is proposing to
Line 21. For further details on what is to be included in the
attachment, see section 7.01(1)(d) and 9.03(1) of Rev. Proc.
2006-1.
Line 23. Taxpayers filing under the advance consent request
procedures must pay a user fee for each Form 3115. See
Appendix A of Rev. Proc. 2006-1. (Taxpayers filing under an
automatic change request procedure do not pay a user fee.)
A separate user fee must be paid for each member of an
affiliated group and for each separate and distinct trade or
business of a taxpayer (including a QSUB or a single-member
LLC) to which the requested advance consent accounting
method change applies. If the filer is not requesting an advance
consent accounting method change for itself, a user fee for the
filer is not required.
However, the reduced user fee in section (A)(5)(b) of
Appendix A of Rev. Proc. 2006-1 applies in the following
situations.
1. A taxpayer requesting an identical accounting method
change on a single Form 3115 for two or more separate and
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change its method of accounting to properly capitalize such
costs. The computation of the section 481(a) adjustment with
respect to the change in method of accounting may be
demonstrated as follows:
Beginning inventory for year of change under
proposed method . . . . . . . . . . . . . . . . . . . . . . .
Beginning inventory for year of change under
present method . . . . . . . . . . . . . . . . . . . . . . . .
Difference (positive section 481(a) adjustment) . . . . .
Accrued income . . . . . . . . . . . . . . . .
$250,000
Less:
Uncollectible amount . . . . . . . . . . . .
50,000
Net income accrued but not received . .
Less:
$120,000
Accrued expenses . . . . . . . . . . . . . .
100,000
+$ 20,000
Expenses deducted as recurring item
Schedule A—Change in Overall Method
of Accounting
All applicants filing to change their overall method of accounting
must complete Part I, including applicants filing under
designated automatic accounting method change numbers 30,
32, 33, and 34 in the List of Automatic Accounting Method
Changes.
Schedule B—Change in Reporting
Advance Payments
Line 1. In general, advance payments must be included in
gross income in the tax year of receipt. However, for federal
income tax purposes, Rev. Proc. 2004-34, 2004-22 I.R.B. 991,
allows applicants on the accrual method, in certain
circumstances, to defer to the next tax year amounts received
(or amounts due and payable) that are attributable to a
subsequent tax year. Applicants requesting the deferral method
under Rev. Proc. 2004-34 must provide the information and
documentation in section 8.03(2) of Rev. Proc. 2004-34 in lieu
of the information and documentation required by Line 1 of
Schedule B.
Example. ABC Corporation, a calendar year taxpayer using
the cash method of accounting, has the following items of
unreported income and expense on December 31, 2005:
Expenses eligible for recurring item
exception . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,000
$120,000
Use of the cash method is also limited under Regulations
sections 1.471-1 and 1.446-1(c)(2)(i) if the applicant purchases,
produces, or sells merchandise that is an income-producing
factor in its business. However, for exceptions to this limitation,
see section 5.05 in the Appendix of Rev. Proc. 2002-9 and Rev.
Proc. 2002-28.
The following example illustrates how an applicant calculates
the section 481(a) adjustment when changing to an accrual
method, a nonaccrual-experience method, and the recurring
item exception.
75,000
Section 481(a) adjustment . . . . . . . .
For farming corporations and partnerships with a C
corporation as a partner, see section 447 for limits on the use of
the cash method.
Line 1h. Enter the net amount, which is the net section 481(a)
adjustment, on line 1h. Also, enter the net section 481(a)
adjustment on line 25 in Part IV on page 3.
Accrued amounts properly
deductible (economic performance has occurred) . . . .
80,000
The limit on the use of the cash method under section 448
does not apply to:
1. Farming businesses as defined in section 448(d)(1).
2. Qualified personal service corporations as defined in
section 448(d)(2).
3. C corporations and partnerships with a C corporation as
a partner if the corporation or partnership has gross receipts of
$5 million or less. See section 448(b)(3) and (c) to determine if
the applicant qualifies for this exception.
Line 1b. Enter amounts received or reported as income in a
prior year that were not earned as of the beginning of the year
of change. Examples include:
1. An advance payment received in a prior year for goods
that were not delivered by the beginning of the year of change
may be reported upon delivery if the taxpayer qualifies under
Regulations section 1.451-5. If any amounts entered on line 1b
are for advance payments, complete Schedule B. See the
instructions for Schedule B before completing Schedule B.
2. A discount on installment loans is reported as income in
the year the loans were made instead of in the year(s) the
income was received or earned.
50,000
Total expenses accrued but not paid . .
Limits on cash method use. Except as provided below, C
corporations and partnerships with a C corporation as a partner
may not use the cash method of accounting. Tax shelters, also,
are precluded from using the cash method. For this purpose, a
trust subject to tax on unrelated business income under section
511(b) is treated as a C corporation with respect to its unrelated
trade or business activities.
Note: Do not include amounts that are not attributable to the
change in method of accounting, such as amounts that correct
a math or posting error or errors in calculating tax liability.
Uncollectible amounts based on
the nonaccrual-experience method . . . . . . . . . . . . .
5,000
Part II—Change to the Cash Method For
Advance Consent Request
Lines 1a through 1g. Enter the amounts requested on lines 1a
through 1g, even though the calculation of some amounts may
not have been required in determining taxable income due to
the applicant’s present method of accounting.
$250,000
75,000
Line 2. If an applicant is requesting to use the recurring item
exception (section 461(h)(3)), the section 481(a) adjustment
must include the amount of the additional deduction that results
from using the recurring item exception.
Part I—Change in Overall Method
Accrued income . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$200,000
Line 2. Advance payments received under a contract for the
sale of goods generally may be deferred for federal income tax
purposes until the second year following the receipt of
substantial advance payments on the contract. See Regulations
section 1.451-5 for requirements that must be met and for the
definition of “substantial advance payments.”
ABC Corporation changes to an overall accrual method, a
nonaccrual-experience method, and the recurring item
exception for calendar year 2006. The section 481(a)
adjustment is calculated as follows:
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Schedule C—Changes Within the LIFO
Inventory Method
inventory valuation method. The applicant must complete
Schedule D, Part III, Method of Cost Allocation. For exceptions,
see Regulations section 1.263A-7(b)(2).
Use this schedule to request a change from one LIFO inventory
method or submethod to another LIFO inventory method or
submethod. All applicants changing within the LIFO inventory
method or submethods must complete Part I. Complete Part II
only if applicable.
Line 5a. If the applicant properly elected the LIFO inventory
method but is unable to furnish a copy of Form(s) 970, attach
the following statement to Form 3115:
“I certify that to the best of my knowledge and belief (name
of applicant) properly elected the LIFO inventory method by
filing Form 970 with its return for the tax year(s) ended (insert
date(s)) and otherwise complied with the provisions of section
472(d) and Regulations section 1.472-3.”
Part I—General LIFO Information
Line 6. Applicants changing to the IPIC method must use this
method for all LIFO inventories. This includes applicants
requesting designated automatic accounting method change
numbers 61 or 62 in the List of Automatic Accounting
Method Changes.
Line 5c. Attach the three statements required by section
10.01(4) in the Appendix of Rev. Proc. 2002-9.
Part III—Method of Cost Allocation
Applicants requesting to change their method of accounting for
any property (produced or acquired for resale) subject to
section 263A or any long-term contracts as described in section
460 must complete this schedule.
Schedule D—Change in the Treatment of
Long-Term Contracts Under Section 460,
Inventories, or Other Section 263A
Assets
If the change is for noninventory property that is subject to
section 263A, attach a detailed description of the types of
property involved and an explanation detailing how that
property was accounted for prior to January 1, 1987.
Part I—Change in Reporting Income
From Long-Term Contracts
There are several methods available for allocating and
capitalizing costs under section 263A, and for allocating and,
where appropriate, capitalizing costs properly allocable to
long-term contracts. A change to or from any of these methods
is a change in accounting method that requires IRS consent.
Using the applicable regulations and notice listed below, the
applicant should verify which methods are presently being used
and the proposed methods that will be used before completing
Schedule D, Part III. These methods are as follows:
Line 2a. Under section 460(f), the term “long-term contract”
means any contract for the manufacture, building, installation,
or construction of property that is not completed in the tax year
in which it is entered into. However, a manufacturing contract
will not qualify as long-term unless the contract involves the
manufacture of (a) a unique item not normally included in
finished goods inventory or (b) any item that normally requires
more than 12 calendar months to complete.
1. Allocating Direct and Indirect Costs
Generally, all long-term contracts entered into after July 10,
1989, that do not meet the exceptions under section 460(e)
must be accounted for using the percentage of completion
method. See section 460 and the related regulations.
Line 2b. To qualify for the contract exceptions under section
460(e), the contract must be:
1. A home construction contract entered into after June 20,
1988, involving dwelling units in buildings containing four or
fewer units, or
2. Any other construction contract entered into by the
applicant if, at the time the contract is entered into, it is
expected to be completed within 2 years and the applicant’s
average annual gross receipts determined under section
460(e)(2) for the 3-year period preceding the tax year the
contract was entered into did not exceed $10 million.
• Specific identification method — Regulations sections
1.263A-1(f)(2) and 1.460-5.
• Burden rate method — Regulations sections 1.263A-1(f)(3)(i)
and 1.460-5.
• Standard cost method — Regulations sections
1.263A-1(f)(3)(ii) and 1.460-5.
• Any other reasonable allocation method — Regulations
sections 1.263A-1(f)(4) and 1.460-5.
2. Allocating Mixed Service Costs
• Direct reallocation method — Regulations section
1.263A-1(g)(4)(iii)(A).
• Step-allocation method — Regulations section
1.263A-1(g)(4)(iii)(B).
• Simplified service cost method:
Using the labor-based allocation ratio — Regulations section
1.263A-1(h)(4).
Using the production cost allocation ratio — Regulations
section 1.263A-1(h)(5).
• Any other reasonable allocation method — Regulations
section 1.263A-1(f)(4).
Line 4b. Under the simplified cost-to-cost method, only certain
costs are used in determining both (a) costs allocated to the
contract and incurred before the close of the tax year and
(b) estimated contract costs. These costs are: (1) direct
material costs; (2) direct labor costs; and (3) allowable
deductions for depreciation, amortization, and cost recovery
allowances on equipment and facilities directly used to
construct or produce the subject matter of the long-term
contract. See Regulations section 1.460-5(c).
3. Capitalizing Additional Section 263A Costs
• Simplified production method:
Part II—Change in Valuing Inventories Including
Cost Allocation Changes
If the applicant is currently using a LIFO inventory method or
submethod and is changing to another LIFO inventory method
or submethod, Part II is not applicable. Use Schedule C,
Changes Within the LIFO Inventory Method.
Line 3. If an applicant is subject to, but not in compliance with,
section 263A, generally on the same Form 3115 the applicant
must first comply with section 263A before changing an
•
•
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Without historic absorption ratio election — Regulations
section 1.263A-2(b)(3).
With historic absorption ratio election — Regulations section
1.263A-2(b)(4).
Simplified resale method:
Without historic absorption ratio election — Regulations
section 1.263A-3(d)(3).
With historic absorption ratio election — Regulations section
1.263A-3(d)(4).
U.S. ratio method — Notice 88-104, 1988-2 C.B. 443.
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• Any other reasonable allocation method — Regulations
Information For Automatic Change Request, on page 1 of Form
3115.
1. Commodity Credit Corporation loans (section 77) —
for loans received from the Commodity Credit Corporation,
from including the loan amount in gross income for the tax year
in which the loan is received to treating the loan amount as a
loan. Scope limitations do not apply to this change. This change
is made on a cut-off basis. See section 1.01 in the Appendix of
Rev. Proc. 2002-9.
2. Lawyers handling cases on a contingent fee basis
(section 162) — from treating advances of money to their
clients for litigation costs as deductible business expenses to
treating those advances as loans. See section 1A.01 in the
Appendix of Rev. Proc. 2002-9.
3. ISO 9000 costs (section 162) — to treating the costs as
deductible, except to the extent they result in the creation or
acquisition of an asset having a useful life substantially beyond
the tax year. Scope limitations do not apply to this change. See
section 1A.04 in the Appendix of Rev. Proc. 2002-9.
4. Restaurant smallwares costs (section 162) — to the
smallwares method described in Rev. Proc. 2002-12, 2002-3
I.R.B. 374 (that is, as materials and supplies that are not
incidental under Regulations section 1.162-3). Scope limitations
do not apply to this change. The entire section 481(a)
adjustment must be taken into account in the year of change.
See section 1A.06 in the Appendix of Rev. Proc. 2002-9.
5. Bad debts (section 166) — for an applicant other than a
bank, from accounting for bad debts using a reserve or other
improper method to a specific charge-off method that complies
with section 166. See section 1B.01 in the Appendix of Rev.
Proc. 2002-9.
6. Bad debt conformity for banks (section 166) — for
banks other than new banks, to the method that conforms to
Regulations section 1.166-2(d)(3) for the first time the bank
makes this change, or to involuntarily revoke this method. This
change does not fall under the procedures of Rev. Proc.
2002-9. Instead, see Regulations section 1.166-2(d)(3).
7. Depreciation or amortization (impermissible)
(sections 56, 167, 168, 197, 1400I, 1400L, and former
section 168) — from an impermissible method to a permissible
method for changes allowed under Temporary Regulations
section 1.446-1T(e)(2)(ii)(d), and for depreciable property
owned at the beginning of the year of change. Complete
Schedule E of Form 3115. Attach the statements required by
section 2.01(2)(b) in the Appendix of Rev. Proc. 2002-9, as
modified by Rev. Proc. 2004-11, 2004-3 I.R.B. 311 (or
successor), and Rev. Proc. 2005-43, 2005-29 I.R.B. 107.
Certain scope limitations do not apply. An applicant changing its
method of accounting for depreciation because of a change
described in designated automatic accounting method change
number 10 (sale or lease transactions) must file the Form 3115
in accordance with designated automatic accounting method
change number 10. See section 2.01 in the Appendix of Rev.
Proc. 2002-9, as modified by Rev. Proc. 2003-50, 2003-29
I.R.B. 119, and Rev. Proc. 2004-11 (or successor), as modified
by Rev. Proc. 2005-43.
8. Depreciation (permissible) (sections 56 and 167) —
from a permissible method to another permissible method
listed in section 2.02 in the Appendix of Rev. Proc. 2002-9, as
modified by Rev. Proc. 2004-11, 2004-3 I.R.B. 311 (or
successor). Complete Schedule E of Form 3115. For public
utility property, attach the statement required by section
2.02(4)(d) in the Appendix of Rev. Proc. 2002-9. Certain scope
limitations do not apply. The section 481(a) adjustment is zero.
See section 2.02 in the Appendix of Rev. Proc. 2002-9, as
modified by Rev. Proc. 2004-11 (or successor).
9. Post-disposition depreciation or amortization
(sections 56, 167, 168, 197, 1400I, and 1400L, and former
section 168) — for an item of depreciable or amortizable
section 1.263A-1(f)(4) (including the methods listed on page 8
under Allocating Direct and Indirect Costs).
Schedule E—Change in Depreciation or
Amortization
All applicants requesting to change their method of depreciation
or amortization must complete Schedule E of Form 3115.
Applicants changing their method of accounting for depreciation
or amortization under the automatic change request procedures
should see the depreciation changes in the List of Automatic
Accounting Method Changes.
Do not file Form 3115:
1. To make an election under sections 167, 168, 179, 1400I,
1400L(b), 1400L(c), or 1400N(d), or former section 168,
2. To revoke an election made under one of those sections,
3. To make or revoke an election under section 13261(g)(2)
or (3) of the Revenue Reconciliation Act of 1993 (relating to
section 197 intangibles),
4. To change the placed-in-service date,
5. To change the salvage value (except for a change in
salvage value to zero when the salvage value is expressly
treated as zero by the Code, the regulations, or other published
guidance), or
6. To change a useful life under section 167 (except for a
change to or from a useful life, recovery period, or amortization
period that is specifically assigned by the Code, the regulations,
or other published guidance).
List of Automatic Accounting Method
Changes
Listed below are automatic accounting method changes
providing for the filing of Form 3115. The List of Automatic
Accounting Method Changes includes regulatory automatic
changes, changes provided for in the Appendix of Rev. Proc.
2002-9, and automatic changes provided for in other guidance.
These automatic changes may be modified or supplemented
with additional automatic changes by subsequently published
guidance.
Note: The list provides a brief description of each automatic
accounting method change that is included in the list. A
filer/applicant may not rely on the list or the descriptions of
accounting method changes in the list as authority for making
an accounting method change. A filer/applicant that is within the
scope of, and complies with, all the applicable provisions of the
published guidance that authorizes each listed change may rely
on the applicable published guidance as authority for its
automatic accounting method change. If any information in the
List of Automatic Accounting Method Changes conflicts with
published guidance, the published guidance applies.
Each item in the list below:
• Designates an automatic accounting method change number
for each change for entry on line 1a of Form 3115.
• Briefly describes the accounting method change.
• Indicates if scope limitation rules may not apply.
• Indicates if audit protection may not apply.
• Indicates in some cases which schedules of Form 3115 to
complete.
• Indicates in some cases any additional reporting
requirements.
• Indicates in some cases if the change is made on a cut-off
basis.
• Provides a reference to the basic published guidance (for
example, revenue procedure) that provides for the automatic
change, which filers should review prior to completing Part I,
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property disposed of by the taxpayer during the year of change
for which the taxpayer deducted less than the depreciation
allowable, from an impermissible method of accounting for
depreciation or amortization to a permissible method of
accounting for depreciation or amortization. Complete Schedule
E of Form 3115. Scope limitations do not apply. Attach the
original Form 3115 to the filer’s timely filed amended income tax
return for the year of change and file the IRS National Office
copy no later than when the original Form 3115 is filed with that
amended return. The amended income tax return must include
the adjustments to taxable income and any collateral
adjustments to taxable income or tax liability (for example,
adjustments to the amount or character of the gain or loss)
resulting from this change in method of accounting. See Rev.
Proc. 2004-11, 2004-3 I.R.B. 311.
10. Sale or lease transactions (sections 61, 162, 167, 168,
and 1012) — from treating property as sold to treating property
as leased, and vice versa, and from treating property as
purchased to treating property as leased, and vice versa. Audit
protection does not apply to this change. This change is made
on a cut-off basis. See section 2.03 in the Appendix of Rev.
Proc. 2002-9.
11. Modern golf course greens (sections 167, 168, and
former section 168) — either to capitalization of land
preparation costs undertaken in the construction of modern
greens that are closely associated with depreciable assets or to
the addition to basis of land for earthmoving costs inextricably
associated with the land. Complete Schedule E of Form 3115.
See section 2.04 in the Appendix of Rev. Proc. 2002-9.
12. Original and replacement tire costs (section 168) — for
qualifying vehicles, to the original tire capitalization method.
Complete Schedule E of Form 3115. See Rev. Proc. 2002-27,
2002-17 I.R.B. 802.
13. Depreciation of gas pump canopies (sections 167,
168, and former section 168) — for depreciation of certain
stand-alone gasoline pump canopies and their supporting
concrete footings, to classifying the gasoline pump canopies in
asset class 57.0 of Rev. Proc. 87-56, 1987-2 C.B. 674, and to
classifying the supporting concrete footings in asset class 00.3
of Rev. Proc. 87-56. Complete Schedule E of Form 3115. See
Rev. Rul. 2003-54, 2003-23 I.R.B. 982.
14. Depreciation of utility assets (sections 167, 168, and
former section 168) — for depreciation of assets owned by a
utility used in general business operations, to classifying assets
under Rev. Proc. 87-56,1987-2 C.B. 674, to conform with Rev.
Rul. 2003-81, 2003-30 I.R.B. 126. Complete Schedule E of
Form 3115. See Rev. Rul. 2003-81.
15. Depreciation of cable TV fiber optics (sections 167
and 168) — for depreciation of fiber optic node and trunk line of
a cable television distribution system, to a safe harbor method
for classifying the unit of property either as providing one-way
communication services or two-way communication services.
See Rev. Proc. 2003-63, 2003-32 I.R.B. 304.
16. Amortizable bond premium (section 171) — from
amortizing bond premium to not amortizing the premium
(revoking the section 171(c) election). Attach the statement
required by section 1C.01(4) in the Appendix of Rev. Proc.
2002-9. This change is made on a cut-off basis. See section
1C.01 in the Appendix of Rev. Proc. 2002-9.
17. Research and experimental expenditures (section
174) — from the capitalization method to another permissible
method, from the expense method to another permissible
method, from the deferred expense method to another
permissible method, or from the current period of amortization
to a different period of amortization under the deferred expense
method. Attach the statement required by section 2A.01(4) in
the Appendix of Rev. Proc. 2002-9. Audit protection does not
apply to this change. This change is made on a cut-off basis.
See section 2A in the Appendix of Rev. Proc. 2002-9.
18. Computer software expenditures (sections 162 and
167) — for costs of developed, acquired, or leased or licensed
computer software, to deductible expenses or capital
expenditures and amortization (for developed software), to
capital expenditures and depreciation or amortization (for
acquired computer software), or to deductible expenses under
Regulations section 1.162-11 (for leased or licensed computer
software). Complete Schedule E of Form 3115 for changes
relating to acquired computer software or developed computer
software if the change is to capital expenditures and
amortization. If applicable, attach the statement required by
section 2B.04 in the Appendix of Rev. Proc. 2002-9, as
modified by Rev. Proc. 2004-11, 2004-3 I.R.B. 311. See section
2B in the Appendix of Rev. Proc. 2002-9, as modified by Rev.
Proc. 2004-11.
19. Package design costs (section 263) — to the
capitalization method, to the design-by-design capitalization
and 60-month amortization method, or to the pool-of-cost
capitalization and 48-month amortization method. For changes
to the capitalization method or to the design-by-design
capitalization and 60-month amortization method, attach the
statement required by section 3.01(2) in the Appendix of Rev.
Proc. 2002-9. See section 3.01 in the Appendix of Rev. Proc.
2002-9.
20. Line pack gas or cushion gas costs (section 263) — to
treating the costs as capital expenditures, the costs of
recoverable amounts as not depreciable, and the costs of
unrecoverable amounts as depreciable. A taxpayer that
changes its method for the costs of unrecoverable amounts
also must change to a permissible method of depreciation for
those costs. See section 3.02 in the Appendix of Rev. Proc.
2002-9.
21. Removal costs (section 263) — for certain costs
incurred in the retirement and removal of depreciable assets, to
a method that conforms with Rev. Rul. 2000-7, 2000-9 I.R.B.
712. For public utility property, attach the statement required by
section 3.03(2)(b) in the Appendix of Rev. Proc. 2002-9. Scope
limitations do not apply to this change. See section 3.03 in the
Appendix of Rev. Proc. 2002-9.
22. Certain uniform capitalization methods used by small
resellers, formerly small resellers, and reseller-producers
(section 263A) — for qualifying applicants, to a qualifying
method or methods. Complete Schedule D, Parts II and III, of
Form 3115. Scope limitations do not apply in certain cases. See
sections 6.01 and 6.02 of Rev. Proc. 2002-54, and section
4.01(5) in the Appendix of Rev. Proc. 2002-9.
23. Certain uniform capitalization methods used by
producers and reseller-producers (section 263A) — for
qualifying applicants, to a qualifying method or methods.
Complete Schedule D, Parts II and III, of Form 3115. The
applicant may request this change and designated automatic
accounting method change numbers 77 (environmental
remediation costs) and 92 (allocation of environmental
remediation costs to production) on a single Form 3115, but
must comply with the ordering rules of Regulations section
1.263A-7(b)(2). See section 6.03 of Rev. Proc. 2002-54.
24. Research and experimental expenditures under
uniform capitalization methods (section 263A) — from
capitalizing research and experimental expenditures to
inventory to no longer capitalizing these costs to inventory.
Complete Schedule D, Part II, of Form 3115, as applicable.
Attach the statement required by section 4.04(2) in the
Appendix of Rev. Proc. 2002-9. Audit protection does not apply
to this change. The applicant may request this change and
designated automatic accounting method change numbers 77
(environmental remediation costs) and 92 (allocation of
environmental remediation costs to production) on a single
Form 3115, but must comply with the ordering rules of
Regulations section 1.263A-7(b)(2). See section 4.04 in the
Appendix of Rev. Proc. 2002-9.
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25. Impact fees (section 263A) — for impact fees incurred in
connection with the new construction or expansion of a
residential building, to treating the costs as capital expenditures
allocable to the building. Complete Schedule E of Form 3115 if
the building is depreciable. The applicant may request this
change and designated automatic accounting method change
numbers 77 (environmental remediation costs) and 92
(allocation of environmental remediation costs to production) on
a single Form 3115, but must comply with the ordering rules of
Regulations section 1.263A-7(b)(2). See Rev. Rul. 2002-9,
2002-10 I.R.B. 614.
26. Related party transactions (section 267) — for losses,
expenses, and qualified stated interest incurred in transactions
between related parties, to disallowing or deferring certain
deductions attributable to such transactions in accordance with
section 267. See section 4A.01 in the Appendix of Rev. Proc.
2002-9.
27. Deferred compensation determination (section
404) — for determining whether an item of compensation is
deferred compensation or when the item is paid, from making
the determination by reference to when the item is secured to
making the determination by reference to when the item is
actually received. Audit protection and scope limitations do not
apply to this change. The section 481(a) adjustment must be
taken into account ratably over three tax years. See section
4B.01 in the Appendix of Rev. Proc. 2002-9.
28. Bonus or vacation pay deferred compensation
(section 404) — for bonuses that are deferred compensation,
from treating as deductible or capitalizable when accrued, to
treating as deductible or capitalizable in the year in which
includible in the employee’s income, and for vacation pay that is
deferred compensation, from treating as deductible or
capitalizable when accrued to treating as deductible or
capitalizable in the year in which paid to the employee. See
section 4B.02 in the Appendix of Rev. Proc. 2002-9.
29. Grace period contributions (section 404) — for
contributions made to a section 401(k) qualified cash or
deferred arrangement or matching contributions under section
401(m), from treating contributions made after the end of the
tax year but before the due date of the tax return as being “on
account of” the tax year without regard to when the underlying
compensation is earned to treating such contributions as not
being “on account of” the tax year if they are attributable to
compensation earned after the end of that tax year. See Rev.
Rul. 2002-46, 2002-29 I.R.B. 117, as modified by Rev. Rul.
2002-73, 2002-45 I.R.B. 805.
30. Overall accrual method (section 446) — for a qualifying
applicant, from a cash receipts and disbursements or a hybrid
method to an overall accrual method, or to an overall accrual
method in conjunction with the recurring item exception under
section 461(h)(3), or to an overall accrual method for an
applicant required to change to an overall accrual method under
section 448, but who is ineligible to make the change under
Regulations section 1.448-1(h)(2) (relating to the “first section
448 year”). Complete Schedule A, Part I, of Form 3115. Also
complete Schedule D, Parts II and III, of Form 3115, as
applicable. An applicant requesting this change and designated
automatic accounting method change number 84 (deferral
method for certain advance payments) must file a single Form
3115 for both changes. See section 5.01 in the Appendix of
Rev. Proc. 2002-9.
31. Multi-year insurance policies for multi-year service
warranty contracts (section 446) — for a manufacturer,
wholesaler, or retailer of motor vehicles or other durable
consumer goods accounting for multi-year insurance policies for
multi-year service warranty contracts, to capitalizing and
amortizing the costs. See section 5.03 in the Appendix of Rev.
Proc. 2002-9.
32. Overall cash method ($1 million) (section 446) — for
qualifying applicants changing to the overall cash method.
Complete Schedule A, Part I, of Form 3115. Also, complete
Schedule D, Parts II and III, of Form 3115, as applicable. Scope
limitations do not apply to this change. The applicant may
request this change and designated automatic accounting
method change number 50 (small taxpayer ($1 million)
inventory exception) on a single Form 3115. See section 5.05 in
the Appendix of Rev. Proc. 2002-9.
33. Overall cash method ($10 million) (section 446) — for
qualifying applicants changing to the overall cash method.
Complete Schedule A, Part I, of Form 3115. Also, complete
Schedule D, Parts II and III, of Form 3115, as applicable. Scope
limitations do not apply to this change. The applicant may
request this change and designated automatic accounting
method change number 51 (small taxpayer ($10 million)
inventory exception) on a single Form 3115. See Rev. Proc.
2002-28, 2002-18 I.R.B. 815.
34. Overall accrual method (section 448) — to an overall
accrual method for the applicant’s first tax year it is required to
change from the cash method by section 448. Complete
Schedule A, Part I, of Form 3115. Also, complete Schedule D,
Parts II and III, of Form 3115, as applicable. An applicant
requesting this change, designated automatic accounting
method change number 35 (nonaccrual-experience method),
and/or designated automatic accounting method change
number 84 (deferral method for certain advance payments)
must file a single Form 3115 for all such changes. This change
does not fall under the procedures of Rev. Proc. 2002-9.
Instead, see Regulations section 1.448-1.
35. Nonaccrual-experience method (section 448) — for an
applicant changing its method of accounting for amounts
received for the performance of services in fields described in
section 448(d)(2)(A) (that is, health, law, engineering,
architecture, accounting, actuarial science, performing arts, or
consulting), from an overall accrual method to a
nonaccrual-experience method, from one
nonaccrual-experience method to another
nonaccrual-experience method, and/or from the present
method to a periodic system under Notice 88-51, 1988-1 C.B.
535. An applicant requesting this change, designated automatic
accounting method change number 34 (overall accrual method
under section 448), and/or designated automatic accounting
method change number 84 (deferral method for certain
advance payments) must file a single Form 3115 for all such
changes. See Temporary Regulations section 1.448-2T(g) and
(h) and Notice 88-51.
36. Interest accrual on non-performing loans (section
451) — for an accrual method bank accounting for qualified
stated interest on non-performing loans, to the method whereby
interest is accrued until either the loan is worthless under
section 166 and is charged off as a bad debt or the interest is
determined to be uncollectible. See section 5A.01 in the
Appendix of Rev. Proc. 2002-9.
37. Advance rentals (section 451) — for advance rentals
other than advance rentals subject to section 467, to inclusion
in gross income in the tax year received. See section 5A.03 in
the Appendix of Rev. Proc. 2002-9.
38. State tax refunds (section 451) — for an accrual method
applicant with state or local income or franchise tax refunds, to
accrue these items in the tax year the applicant receives
payments or notice of approval of its refund claim (whichever is
earlier), in accordance with Rev. Rul. 2003-3, 2003-2 I.R.B.
252. See Rev. Rul. 2003-3.
39. Capital cost reduction (CCR) payments (section
451) — for CCR payments (as defined in Rev. Proc. 2002-36,
2002-21 I.R.B. 993) made by vehicle lessees, to the method
that excludes these payments from the applicant’s gross
income and from the applicant’s bases in the purchased
vehicles. See Rev. Proc. 2002-36.
40. Exclusion for certain returned magazines,
paperbacks, or records (section 458) — for an accrual
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method applicant electing to exclude from gross income some
or all of the income attributable to qualified sales during the tax
year of magazines, paperbacks, or records that are returned
before the close of the applicable merchandise return period for
that tax year. The applicant’s Form 3115 need contain only the
information listed in Regulations section 1.458-2(d). This
election does not fall under the procedures of Rev. Proc.
2002-9. Instead, see Regulations section 1.458-2.
41. Percentage-of-completion (section 460) — for an
applicant not required by section 460 to use the
percentage-of-completion method to account for its long-term
contracts, from an exempt-contract method to the
percentage-of-completion method. Complete Schedule D, Parts
I and III, of Form 3115. Audit protection does not apply to this
change. This change is made on a cut-off basis. See section
7A.02 in the Appendix of Rev. Proc. 2002-9.
42. Timing of incurring employee medical benefits
liabilities (section 461) — for an applicant with an obligation to
pay an employee’s medical expenses that is neither insured nor
paid from a welfare benefit fund, to treatment as a liability
incurred in the tax year in which the applicant’s employee files
the claim with the applicant. See section 8.01 in the Appendix of
Rev. Proc. 2002-9.
43. Timing of incurring real property, personal property,
and state income tax liabilities (section 461) — for a
qualifying applicant, to treating these taxes as incurred in the
tax year in which the taxes are paid, or to account for these
taxes under the recurring item exception to the economic
performance rules, or to revoke the ratable accrual election
under section 461(c). See section 8.02 in the Appendix of Rev.
Proc. 2002-9.
44. Timing of incurring workers’ compensation act, tort,
breach of contract, or violation of law liabilities (section
461) — for a qualifying applicant accounting for self-insured
liabilities arising under any workers’ compensation act or out of
any tort, breach of contract, or violation of law, to treating the
liability as incurred in the tax year in which (a) all the events
have occurred establishing the fact of the liability, (b) the
amount of the liability can be determined with reasonable
accuracy, and (c) payment is made to the person to which the
liability is owed. See section 8.03 in the Appendix of Rev. Proc.
2002-9.
45. Timing of incurring payroll tax liabilities (section
461) — for FICA and FUTA taxes, state unemployment taxes,
and railroad retirement taxes, to the method under which the
applicant may deduct in Year 1 its otherwise deductible FICA
and FUTA taxes, state unemployment taxes, and railroad
retirement taxes imposed with respect to year-end wages
properly accrued in Year 1, but paid in Year 2, if the
requirements of the recurring item exception are met, or, for
state unemployment taxes and railroad retirement taxes, to the
method stated above where the applicant already uses that
method of accounting for FICA and FUTA taxes. See section
8.04 in the Appendix of Rev. Proc. 2002-9.
46. Cooperative advertising (section 461) — to incurring a
liability in the tax year in which these services are performed,
provided the manufacturer is able to reasonably estimate this
liability even though the retailer does not submit the required
claim form until the following year. See section 8.05 in the
Appendix of Rev. Proc. 2002-9.
47. Distributor commissions (section 461) — from
deducting distributor commissions to capitalizing and
amortizing distributor commissions using the distribution fee
period method, the 5-year method, or the useful life method.
This change is made on a cut-off basis. See section 8.06(2) in
the Appendix of Rev. Proc. 2002-9.
48. Cash discounts (section 471) — for cash discounts
granted for timely payment, when such discounts approximate a
fair interest rate, from a method of consistently including the
price of the goods before discount in the cost of the goods and
including in gross income any discounts taken to a method of
reducing the cost of the goods by the cash discounts and
deducting as an expense any discounts not taken, or vice
versa. Complete Schedule D, Parts II and III, of Form 3115, as
applicable. See section 9.01 in the Appendix of Rev. Proc.
2002-9.
49. Estimating inventory shrinkage (section 471) — from
the present method of estimating inventory shrinkage in
computing ending inventory to the “retail safe harbor method” in
section 4 of Rev. Proc. 98-29, 1998-15 I.R.B. 22, or to a
method other than the retail safe harbor method, provided
(a) the applicant’s present method of accounting does not
estimate inventory shrinkage and (b) the applicant’s new
method of accounting (that estimates inventory shrinkage)
clearly reflects income under section 446(b). Complete
Schedule D, Parts II and III, of Form 3115, as applicable. If
changing to a method other than the “retail safe harbor
method,” attach the statement required by section 9.02(3) in the
Appendix of Rev. Proc. 2002-9. Scope limitations do not apply
to this change. Audit protection does not apply in certain cases.
See section 9.02 in the Appendix of Rev. Proc. 2002-9.
50. Small taxpayer ($1 million) inventory exception
(section 471) — for a qualifying applicant, from the present
method of accounting for inventoriable items (including, if
applicable, the method of capitalizing costs under section 263A)
to treating inventoriable items in the same manner as materials
and supplies that are not incidental under Regulations section
1.162-3. Complete Schedule A, Part I, and Schedule D, Parts II
and III, of Form 3115, as applicable. Scope limitations do not
apply to this change. The applicant may request this change
and designated automatic accounting method change number
32 (overall cash method ($1 million)) on a single Form 3115.
See section 9.03 in the Appendix of Rev. Proc. 2002-9.
51. Small taxpayer ($10 million) inventory exception
(section 471) — for a qualifying applicant, from the present
method of accounting for inventoriable items (including, if
applicable, the method of capitalizing costs under section 263A)
to treating inventoriable items in the same manner as materials
and supplies that are not incidental under Regulations section
1.162-3. Complete Schedule D, Parts II and III, of Form 3115,
as applicable. Scope limitations do not apply to this change.
The applicant may request this change and designated
automatic accounting method change number 33 (overall cash
method ($10 million)) on a single Form 3115. See Rev. Proc.
2002-28, 2002-18 I.R.B. 815.
52. “Floor stocks” (section 471) — for payments made or
received with respect to “floor stocks,” to conform with the
holding of Rev. Rul. 2001-8, 2001-9 I.R.B. 726, or to elect the
simplifying assumption regarding goods on hand described in
Rev. Rul. 2001-8. Complete Schedule D, Parts II and III, of
Form 3115, as applicable. If electing the simplifying
assumption, provide the statement described in section
9.04(4)(b) in the Appendix of Rev. Proc. 2002-9. Scope
limitations do not apply to this change. This change is made on
a cut-off basis. See section 9.04 in the Appendix of Rev. Proc.
2002-9.
53. Qualifying volume-related trade discounts (section
471) — to treating qualifying volume-related trade discounts as
a reduction in the cost of merchandise purchased at the time
the discount is recognized in accordance with Regulations
section 1.471-3(b). Complete Schedule D, Parts II and III, of
Form 3115, as applicable. See section 9.05 in the Appendix of
Rev. Proc. 2002-9.
54. Impermissible methods of inventory valuation
(section 471) — to restore an inventory writedown or to
discontinue maintaining a reserve specifically described within
Regulations section 1.471-2(f). Complete Schedule D, Parts II
and III, of Form 3115, as applicable. See section 9.06 in the
Appendix of Rev. Proc. 2002-9.
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55. Valuation of remanufactured cores (section 471) —
for remanufacturers and rebuilders of motor vehicle parts and
resellers of remanufactured and rebuilt motor vehicle parts that
use the lower of cost or market method to value their inventory
of cores, to the safe harbor method of accounting (the “Core
Alternative Valuation” method) to value inventories of cores as
provided for in Rev. Proc. 2003-20, 2003-6 I.R.B. 445.
Complete Schedule D, Parts II and III, of Form 3115, as
applicable. See Rev. Proc. 2003-20.
56. Change from LIFO inventory method (section 472) —
for an applicant changing from the LIFO inventory method for
its entire LIFO inventory, or for a pool or pools within its LIFO
inventory, to the permitted method as determined in section
10.01(1)(b) in the Appendix of Rev. Proc. 2002-9. Complete
Schedule D, Parts II and III, of Form 3115, as applicable. Attach
the statements required by section 10.01(4) in the Appendix of
Rev. Proc. 2002-9. See section 10.01 in the Appendix of Rev.
Proc. 2002-9.
57. Determining current-year cost (section 472) — to
determining current-year cost: (a) by reference to the actual
cost of the goods most recently purchased or produced; (b) by
reference to the actual cost of the goods purchased or
produced during the tax year in the order of acquisition; or
(c) by application of an average unit cost equal to the aggregate
actual cost of all the goods purchased or produced throughout
the tax year divided by the total number of units so purchased
or produced. Complete Schedule C, Part I, of Form 3115. This
change is made on a cut-off basis. See section 10.02 in the
Appendix of Rev. Proc. 2002-9.
58. Alternative LIFO inventory method (section 472) — for
a qualifying applicant that sells new automobiles or new
light-duty trucks, to the “Alternative LIFO Method” described in
Rev. Proc. 97-36, 1997-33 I.R.B. 450. Complete Schedule C of
Form 3115, as applicable. Attach the statement required by
section 10.03(2)(c)(ii) in the Appendix of Rev. Proc. 2002-9 and
the Form 970 required by reference in section 10.03(2)(c)(i) in
the Appendix of Rev. Proc. 2002-9. This change is made on a
cut-off basis. See section 10.03 in the Appendix of Rev. Proc.
2002-9.
59. Used vehicle alternative LIFO method (section 472) —
for a qualifying applicant that sells used automobiles and used
light-duty trucks, to the “Used Vehicle Alternative LIFO
Method,” as described in Rev. Proc. 2001-23, 2001-10 I.R.B.
784. Complete Schedule C, Part I, of Form 3115. In general,
this change is made on a cut-off basis. See section 10.04 in the
Appendix of Rev. Proc. 2002-9.
60. Determining the cost of used vehicles purchased or
taken as a trade-in (section 472) — for a qualifying applicant,
to a method of (a) determining the cost of used vehicles
acquired by trade-in using the average wholesale price listed by
a consistently used official used car guide on the date of the
trade-in; (b) determining the cost of used vehicles purchased
for cash using the actual purchase price of the vehicle; or
(c) reconstructing the beginning-of-the-year cost of used
vehicles purchased for cash using values computed by national
auto auction companies based on vehicles purchased for cash,
where the national auto auction company selected is
consistently used. Complete Schedule C, Part I, of Form 3115.
This change is made on a cut-off basis. See section 10.05 in
the Appendix of Rev. Proc. 2002-9.
61. Change to IPIC inventory method (section 472) — for a
qualifying applicant, from a non-inventory price index
computation (IPIC) LIFO inventory method to the IPIC method
in accordance with all relevant provisions of Regulations section
1.472-8(e)(3). The applicant may request this change and
designated automatic accounting method change number 57
(determining current-year cost), or this change and designated
automatic accounting method change number 62 (changes
within IPIC inventory method) on a single Form 3115. Complete
Schedule C of Form 3115, as applicable. This change is made
on a cut-off basis. See section 10.06 in the Appendix of Rev.
Proc. 2002-9.
62. Changes within IPIC inventory method (section
472) — for one or more of the following changes within IPIC:
(a) from the double-extension IPIC method to the link-chain
IPIC method, or vice versa; (b) to or from the 10 percent
method; (c) to a pooling method described in Regulations
section 1.472-8(b)(4) or Regulations section 1.472-8(c)(2),
including a change to begin or discontinue applying one or both
of the 5 percent pooling rules; (d) combine or separate pools as
a result of the application of a 5 percent pooling rule described
in Regulations section 1.472-8(b)(4) or Regulations section
1.472-8(c)(2); (e) change the selection of BLS tables from
Table 3 (Consumer Price Index for All Urban Consumers
(CPI-U): U.S. city average, detailed expenditure categories) of
the monthly CPI Detailed Report to Table 6 (Producer price
indexes and percent changes for commodity groupings and
individual items, not seasonally adjusted) of the monthly PPI
Detailed Report, or vice versa; or (f) change the representative
month when necessitated because of a change in tax year or a
change in method of determining current-year cost made
pursuant to section 10.02 in the Appendix of Rev. Proc. 2002-9.
A scope limitation does not apply in certain cases. The
applicant may request the change described in (f) above and
designated automatic accounting method change number 57
(determining current-year cost) on a single Form 3115.
Complete Schedule C of Form 3115, as applicable. This
change is made on a cut-off basis. See section 10.07 in the
Appendix of Rev. Proc. 2002-9, as modified by Rev. Proc.
2003-45, 2003-27 I.R.B. 11.
63. Replacement cost method for automobile dealers’
parts inventory (section 472) — to the replacement cost
method for automobile dealers’ parts inventory described in
Rev. Proc. 2002-17, 2002-13 I.R.B. 676. Complete Schedule D,
Parts II and III, of Form 3115, as applicable. This change is
made on a cut-off basis. See Rev. Proc. 2002-17.
64. Mark-to-market (section 475) — for accounting for
securities or commodities by commodities dealers, securities
traders, and commodities traders, to the mark-to-market
method. An election statement must be filed earlier than the
due date of Form 3115. See Rev. Proc. 99-17, 1999-7 I.R.B.
52, for rules relating to this statement. Scope limitations do not
apply to this change. See section 10A.02 in the Appendix of
Rev. Proc. 2002-9.
65. Dealer status changes (section 475) — for an applicant
electing out of certain exemptions from securities dealer status,
to the mark-to-market method. Attach the statement(s) required
by Rev. Proc. 97-43, 1997-39 I.R.B. 12. For a special cut-off
rule, see section 5.02 of Rev. Proc. 97-43. This change does
not fall under the procedures of Rev. Proc. 2002-9. Instead, see
Rev. Proc. 97-43.
66. Bank reserves for bad debts (section 585) — from the
section 585 reserve method to the section 166 specific
charge-off method. Certain scope limitations do not apply. See
section 11.01 in the Appendix of Rev. Proc. 2002-9.
67. Insurance company premium acquisition expenses
(section 832) — for certain insurance companies, to a safe
harbor method of accounting for premium acquisition expenses.
Scope limitations do not apply to this change. See Rev. Proc.
2002-46, 2002-28 I.R.B. 105.
68. Discounted unpaid losses (section 846) — for
insurance companies other than life insurance companies
computing discounted unpaid losses, to the composite method
or to alternative methods. See Rev. Proc. 2002-74, 2002-51
I.R.B. 980.
69. Income from sources within the United States
(section 861) — for certain transactions involving computer
programs, to a method that conforms with Regulations section
1.861-18. See section 11A.01 in the Appendix of Rev. Proc.
2002-9.
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70. Functional currency (section 985) — to the use of
another functional currency for the applicant or its qualified
business unit. See section 11B.01 in the Appendix of Rev. Proc.
2002-9.
71. Rule of 78s (section 1272) — for stated interest on
certain short-term consumer loans, from the Rule of 78s
method to the constant yield method. See section 5.04 in the
Appendix of Rev. Proc. 2002-9.
72. Original issue discount (sections 1272 and 1273) — to
the principal-reduction method for de minimis original issue
discount (OID). Attach the statement required by section
12.01(3) in the Appendix of Rev. Proc. 2002-9. Audit protection
and scope limitations do not apply to this change. This change
is made on a cut-off basis. See section 12.01 in the Appendix of
Rev. Proc. 2002-9.
73. Market discount bonds (section 1278) — from
including market discount currently in income for the tax year to
which the discount is attributable to including market discount in
income for the tax year of disposition or partial principal
payment (revoking the section 1278(b) election). Attach the
statement required by section 12A.01(4) in the Appendix of
Rev. Proc. 2002-9. This change is made on a cut-off basis. See
section 12A.01 in the Appendix of Rev. Proc. 2002-9.
74. Interest income on short-term obligations (section
1281) — to currently including accrued interest and discount in
income (to comply with section 1281). The entire section 481(a)
adjustment must be taken into account in the year of change.
See section 13.01 in the Appendix of Rev. Proc. 2002-9.
75. Stated interest on short-term loans (section 1281) —
for a bank using the cash receipts and disbursements method
of accounting, from accruing stated interest on short-term loans
made in the ordinary course of business to using the cash
method to report such interest. Scope limitations do not apply to
this change. The entire section 481(a) adjustment must be
taken into account in the year of change. See section 13.02 in
the Appendix of Rev. Proc. 2002-9.
76. Sales of mortgage loans (section 1286) — for
accounting for certain sales of mortgage loans in which the
seller also enters into a contract to service the mortgages in
consideration for amounts received from interest payments,
from a method that is inconsistent with Rev. Rul. 91-46, 1991-2
C.B. 358, to a method that is consistent with Rev. Rul. 91-46.
However, the change is only an automatic accounting method
change for certain taxpayers who are under examination. This
change does not fall under the procedures of Rev. Proc.
2002-9. Instead, see Rev. Proc. 91-51, 1991-2 C.B. 779.
77. Environmental remediation costs (section 263A) — for
costs incurred to clean up land that a taxpayer contaminated
with hazardous waste from the taxpayer’s manufacturing
operations, to capitalizing such costs in inventory costs under
section 263A. The applicant requesting this change and another
automatic change under section 263A may file one Form 3115
to make both changes, but must comply with the ordering rules
of Regulations section 1.263A-7(b)(2). See Rev. Rul. 2004-18,
2004-8 I.R.B. 509.
78. Costs of intangibles and certain transactions (section
263(a)) — for amounts paid or incurred to acquire or create
intangibles, or to facilitate an acquisition of a trade or business,
a change in the capital structure of a business entity, and
certain other transactions, to a method of accounting provided
in Regulations sections 1.263(a)-4, 1.263(a)-5, and
1.167(a)-3(b). For a tax year ending on or after December 31,
2005, or for an earlier tax year that is after the applicant’s
second tax year ending on or after December 31, 2003, see
Rev. Proc. 2006-12, 2006-3 I.R.B. 310. For an applicant’s
second tax year ending on or after December 31, 2003, see
Rev. Proc. 2005-9, 2005-2 I.R.B. 303, as modified by Rev.
Proc. 2005-17, 2005-13 I.R.B. 797, which also provides, if the
applicant desires, a change to utilize the 31/2 month rule
authorized by Regulations section 1.461-4(d)(6)(ii) or the
recurring item exception authorized by Regulations section
1.461-5. For information regarding the scope limitations and
how to complete Form 3115, see Rev. Proc. 2006-12 or Rev.
Proc. 2005-9, as modified by Rev. Proc. 2005-17. Compute the
section 481(a) adjustment taking into account only amounts
paid or incurred in tax years ending on or after January 24,
2002. See Rev. Proc. 2006-12 or Rev. Proc. 2005-9, as
modified by Rev. Proc. 2005-17.
79. REMIC inducement fees (section 446) — for
inducement fees received in connection with becoming holders
of noneconomic residual interests in REMICS, to a safe harbor
method provided under Regulations section 1.446-6(e)(1) or
(e)(2). See Rev. Proc. 2004-30, 2004-21 I.R.B. 950.
80. “All events test” method for credit card annual fees
(section 446) — to a method that satisfies the all events test in
accordance with Rev. Rul. 2004-52, 2004-22 I.R.B. 973. Scope
limitations do not apply if the change is made for the applicant’s
first or second tax year ending on or after December 31, 2003.
See Rev. Proc. 2004-32, 2004-22 I.R.B. 988.
81. Ratable inclusion method for credit card annual fees
(section 446) — to the ratable inclusion method for credit card
annual fees. Scope limitations do not apply if the change is
made for the applicant’s first or second tax year ending on or
after December 31, 2003. See Rev. Proc. 2004-32, 2004-22
I.R.B. 988.
82. Credit card late fees (section 1272) — to a method that
treats credit card late fees as interest income that creates or
increases OID on the pool of credit card loans to which the fees
relate. Scope limitations do not apply if the change is made for
the applicant’s first or second tax year ending on or after
December 31, 2003. See Rev. Proc. 2004-33, 2004-22 I.R.B.
989.
83. Full inclusion method for certain advance payments
(section 451) — to the full inclusion method as described in
section 5.01 of Rev. Proc. 2004-34, 2004-22 I.R.B. 991. Scope
limitations do not apply if the change is made for the applicant’s
first or second tax year ending on or after December 31, 2003,
provided the applicant’s method of accounting for advance
payments is not an issue under consideration for tax years
under examination. The applicant must be using, or changing
to, an overall accrual method of accounting. See Rev. Proc.
2004-34.
84. Deferral method for certain advance payments
(section 451) — to the deferral method as described in section
5.02 of Rev. Proc. 2004-34, 2004-22 I.R.B. 991 (except as
provided in section 8.03 and 8.04(2) of Rev. Proc. 2004-34).
The applicant must be using, or changing to, an overall accrual
method of accounting. Scope limitations do not apply if the
change is made for the applicant’s first or second tax year
ending on or after December 31, 2003, provided that the
applicant’s method of accounting for advance payments is not
an issue under consideration for tax years under examination.
In lieu of the information requested on line 1 of Schedule B of
Form 3115, attach the information required in section 8.02(3) of
Rev. Proc. 2004-34. An applicant requesting this change and
designated automatic accounting method change number 30
(overall accrual method (section 446)), or 34 (overall accrual
method (section 448)) (with or without designated automatic
accounting method change number 35 (nonaccrual-experience
method)), must file a single Form 3115 for all such changes.
See Rev. Proc. 2004-34.
85. Film producer’s treatment of certain creative property
costs (section 446) — to account for creative property costs
under the safe harbor method provided in Rev. Proc. 2004-36,
2004-24 I.R.B. 1063. Scope limitations do not apply if the
change is made for the applicant’s first or second tax year
ending on or after December 31, 2003. See Rev. Proc.
2004-36.
86. Timber fertilization (section 162) — for costs incurred
by a timber grower for the post-establishment fertilization of an
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established timber stand, to treat such costs as ordinary and
necessary business expenses deductible under section 162.
Scope limitations do not apply. See Rev. Rul. 2004-62, 2004-25
I.R.B. 1072.
87. Change in general asset account treatment due to a
change in the use of MACRS property (section 168) — to the
method of accounting provided in Regulations sections
1.168(i)-1(c)(2)(ii)(E) and 1.168(i)-1(h)(2). This change is made
on a cut-off basis. See Regulations section 1.168(i)-1(l)(2)(ii).
88. Change in method of accounting for depreciation due
to a change in the use of MACRS property (section 168) —
to the method of accounting provided in Regulations section
1.168(i)-4. See Regulations section 1.168(i)-4(g)(2).
89. Depreciation of qualified non-personal use vans and
light trucks (section 280F) — for certain vehicles placed in
service before July 7, 2003, to a method of accounting in
accordance with Regulations section 1.280F-6(f)(2). See
Regulations section 1.280F-6(f)(2)(iv).
90. Insurance companies’ incentive payments to health
care providers (section 832) — for deducting provider
incentive payments, to the method of including those payments
in discounted unpaid losses without regard to section 404.
Scope limitations do not apply if the change is made for the
applicant’s first or second tax year ending on or after December
31, 2003. See Rev. Proc. 2004-41, 2004-30 I.R.B. 90.
91. Up-front network upgrade payments made to utilities
(section 451) — to a safe harbor method provided in section
5.01 of Rev. Proc. 2005-35, 2005-28 I.R.B. 76. Scope
limitations do not apply if the change is made for the applicant’s
first tax year ending on or after July 11, 2005, or for a prior year
of change pursuant to section 6.03 of Rev. Proc. 2005-35. See
Rev. Proc. 2005-35.
92. Allocation of environmental remediation costs to
production (section 263A) — to a method that allocates under
section 263A environmental remediation costs to the inventory
produced during the tax year such costs are incurred. Scope
limitations do not apply if the change is made for the applicant’s
first or second tax year ending after February 6, 2004. An
applicant that filed a Form 3115 on or before July 20, 2005, to
comply with Rev. Rul. 2004-18, 2004-8 I.R.B. 509, for its first
tax year ending after February 6, 2004, or was not required to
change its method of accounting to comply with Rev. Rul.
2004-18, and files Form 3115 to comply with Rev. Proc.
2005-42, 2005-28 I.R.B. 67, for its first tax year ending after
June 20, 2005, may effect the change using either a section
481(a) adjustment or a cut-off method. An applicant requesting
this change and another automatic change under section 263A
may file one Form 3115 to make both changes, but must
comply with the ordering rules of Regulations section
1.263A-7(b)(2). See Rev. Rul. 2005-42.
93. Election to not treat qualified New York Liberty Zone
(Liberty Zone) leasehold improvement property as 5-year
property for purposes of section 168 (sections 168 and
1400L(c)) — for Liberty Zone leasehold improvement property
placed in service by the applicant after September 10, 2001,
during the 2000, 2001, 2002, 2003, or 2004 tax year, to elect
not to use the 5-year recovery period or 9-year recovery period,
as applicable, provided under section 1400L(c). This change
must be filed with the applicant’s federal tax return for the tax
year that includes June 29, 2005, or with the applicant’s federal
tax return for the first tax year succeeding the tax year that
included June 29, 2005. Scope limitations do not apply. See
Rev. Proc. 2005-43, 2005-29 I.R.B. 107.
94. Credit card cash advance fees (section 1272) — to a
method that treats credit card cash advance fees as creating or
increasing OID on a pool of credit card loans that includes the
cash advances that give rise to the fees. Scope limitations do
not apply if the change is made for the applicant’s first or
second tax year ending on or after December 31, 2004. See
Rev. Proc. 2005-47, 2005-32 I.R.B. 269.
95. Self-constructed tangible personal property
produced on a routine and repetitive basis (section
263A) — for an applicant’s first tax year ending on or after
August 2, 2005, from accounting for mixed service costs under
the simplified service cost method to a method that allocates
such costs using reasonable factors or relationships under a
direct reallocation method, a step-allocation method, or any
other reasonable allocation method (as defined under the
principles of Regulations section 1.263A-1(f)(4)) as provided in
Regulations section 1.263A-1(g)(4), or from accounting for
additional section 263A costs under the simplified production
method to a facts-and-circumstances method as provided in
Regulations section 1.263A-1(f), when the self-constructed
assets are not produced on a routine and repetitive basis
(mass-produced or the applicable recovery period of the
property is longer than 3 years). Scope limitations do not apply.
Audit protection does not apply if the applicant’s method of
accounting for mixed service costs or additional section 263A
costs is an issue under consideration at the time the application
is filed with the IRS National Office. The section 481(a)
adjustment period is two tax years for a net positive adjustment.
The applicant can request this change and designated
automatic accounting method change numbers 77
(environmental remediation costs) and 92 (allocation of
environmental remediation costs to production) on a single
Form 3115, but must comply with the ordering rules of
Regulations section 1.263A-7(b)(2). See Temporary
Regulations sections 1.263A-1T(h)(2)(i)(D) and
1.263A-2T(b)(2)(i)(D).
96. Replacement cost method for heavy equipment
dealers’ parts inventory (section 472) — to the replacement
cost method for heavy equipment dealers’ parts inventory
described in Rev. Proc. 2006-14, 2006-4 I.R.B. 350. Complete
Schedule D, Parts II and III, of Form 3115, as applicable. Audit
protection and scope limitations do not apply in certain cases.
This change is made on a cut-off basis. See Rev. Proc.
2006-14.
97. Depreciation of qualified revitalization building in the
expanded area of a renewal community (section 1400I) — for
a qualified revitalization building that is placed in service by the
applicant after December 31, 2001, in the area of a renewal
community that was expanded by the U.S. Department of
Housing and Urban Development and for which the applicant
receives a retroactive commercial revitalization expenditure
allocation. This change applies only if the applicant filed the
federal tax return for the placed-in-service year of that building
on or before the date the applicant received the retroactive
commercial revitalization expenditure allocation. This change
must be filed with the applicant’s federal tax return for the
taxable year that includes the date on which the commercial
revitalization agency makes the retroactive commercial
revitalization expenditure allocation, or with the applicant’s
federal tax return for the first tax year succeeding the tax year
that included the date on which the commercial revitalization
agency made the retroactive commercial revitalization
expenditure allocation. Scope limitations do not apply. See Rev.
Proc. 2006-16, 2006-9 I.R.B. 539.
98. Insurance contracts acquired in an assumption
reinsurance transaction (section 197) — for an applicant’s
first tax year ending after April 10, 2006, for certain acquisitions
of insurance contracts that apply the rules of Temporary
Regulations section 1.197-2T(g)(5)(ii) to transactions occurring
prior to April 10, 2006, to comply with Regulations section
1.197-2(g)(5). This change does not apply if the applicant’s
proper treatment of any such property is an issue under
consideration in an examination, before an Appeals office, or
before a Federal court. Scope limitations do not apply. See
Regulations section 1.197-2(g)(5).
99. Elections to treat participations and residuals under
the income forecast method (section 167(g)) — for property
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subject to the income forecast method under section 167(g) and
placed in service by the applicant after October 22, 2004, to
elect either to include in the adjusted basis of the property,
participations and residuals expected to be paid before the end
of the tenth tax year following the tax year in which the property
is placed in service, or to exclude participations and residuals
from the adjusted basis of the property and deduct the
participations and residuals in the tax year that the
participations and residuals are paid. This change applies only
if, before June 15, 2006, the applicant filed its federal tax return
for the tax year during which the property was placed in service.
This change must be filed with the applicant’s federal tax return
for the first or second tax year ending on or after December 31,
2005. Scope limitations do not apply. See Notice 2006-47,
2006-20 I.R.B. 892.
100. Election to treat the cost of any qualified film or
television production as an expense (section 181) — for any
qualified film or television production subject to section 181 for
which the applicant begins principal photography after October
22, 2004, but first paid or incurred costs of the production
before October 23, 2004, to elect to treat the costs of the
production as an expense, as provided for in section 181. This
change applies only if, before June 15, 2006, the applicant filed
its federal tax return for the tax year in which the costs of the
production were first paid or incurred. This change must be filed
with the applicant’s federal tax return for the first or second tax
year ending on or after December 31, 2005. Scope limitations
do not apply. See Notice 2006-47, 2006-20 I.R.B. 892.
101. Election to treat reforestation expenditures as
expenses (section 194) — for any qualified timber property, to
elect to deduct reforestation expenditures paid or incurred after
October 22, 2004, as provided for in section 194(b). This
change applies only if, before June 15, 2006, the applicant filed
its federal tax return for the tax year in which the reforestation
expenditures were paid or incurred. This change must be filed
with the applicant’s federal tax return for the first or second tax
year ending on or after December 31, 2005. Scope limitations
do not apply. See Notice 2006-47, 2006-20 I.R.B. 892.
102. Election to treat certain desulfurization costs as
expenses (section 179B) — for a small business refiner (as
defined in section 45H(c)(2)), to elect to deduct 75 percent of
qualified capital costs (as defined in section 45H(c)(2)) paid or
incurred after December 31, 2002, in tax years ending after that
date. This change applies only if, before June 15, 2006, the
applicant filed its federal tax return for the tax year in which the
qualified capital costs were paid or incurred. This change must
be filed with the applicant’s federal tax return for the first or
second tax year ending on or after December 31, 2005. Scope
limitations do not apply. See Notice 2006-47, 2006-20 I.R.B.
892.
103. Qualifying electric transmission transactions (section
451(i)) — for qualified gain from a qualifying electric
transmission transaction, to recognizing all or part of the
qualified gain ratably over the 8-year period beginning with the
year that includes the date of the transaction, as provided in
section 451(i). This change applies only if, before June 15,
2006, the applicant filed its federal tax return for the tax year in
which the qualified electric transmission transaction occurred.
This change must be filed with the applicant’s federal tax return
for the first or second tax year ending on or after December 31,
2005. Scope limitations do not apply. See Notice 2006-47,
2006-20 I.R.B. 892.
Privacy Act and Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws
of the United States. Section 446(e) says that you must obtain IRS approval before you change your method of accounting, except
where otherwise provided. To obtain this approval, you are required to provide the information requested on this form. This
information will be used to ensure that you are complying with the applicable laws, and to figure and collect the right amount of tax.
Failure to provide all of the information requested may prevent processing of this form. Providing false information may subject you
to penalties. Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation, and to
cities, states, and the District of Columbia for use in the administration of their tax laws. We may also disclose this information
including giving it to Federal and state agencies to enforce Federal non-tax criminal laws and to combat terrorism.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the
form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their
contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are
confidential, as required by section 6103.
The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for
individual taxpayers filing this form is approved under OMB control number 1545-0074 and is included in the estimates shown in the
instructions for their individual income tax return. The estimated burden for all other taxpayers who file this form is shown below.
Form
3115
Sch. A
Sch. B
Sch. C
Sch. D
Sch. E
Recordkeeping
38 hr., 29 min.
3 hr., 21 min.
1 hr., 25 min.
5 hr., 1 min.
27 hr., 30 min.
3 hr., 49 min.
Learning about the law
or the form
19 hr., 54 min.
1 hr., 51 min.
30 min.
45 min.
1 hr., 59 min.
1 hr., 59 min.
Preparing and sending
the form to the IRS
23 hr., 48 min.
3 hr., 11 min.
33 min.
2 hr., 4 min.
2 hr., 31 min.
2 hr., 8 min.
If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be
happy to hear from you. You can write to the Internal Revenue Service, Tax Products Coordinating Committee,
SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW, IR-6406, Washington, DC 20224. Do not send the tax form to this office.
Instead, see When and Where To File on page 2.
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| File Type | application/pdf |
| File Title | 2005 Form 1040 |
| Subject | U.S. Individual Income Tax Return |
| Author | SE:W:CAR:MP |
| File Modified | 2006-12-30 |
| File Created | 2006-12-30 |