Change in Accounting Method

Change in Accounting Method

A change from one accounting method to another, which usually requires prior approval from the IRS. A change generally requires adjustments to avoid omissions or duplications.
References in periodicals archive ?
If the taxpayer voluntarily makes this change by filing Form 3115, Application for Change in Accounting Method, the change generally would qualify as an automatic change under Section 10.
97-27, TEI objected to the IRS's use of a revenue procedure to assert that a change in character of an item may be a change in accounting method.
In the past, those seeking such changes--and in some cases those who wanted to adopt or retain an accounting period -- had to file a formal ruling request with the IRS commissioner using either Form 1128, Application for Change in Accounting Period, or Form 3115, Application for Change in Accounting Method.
31, 2003, by filing Form 3115, Application for Change in Accounting Method, by the due date (including extensions) of its 2003 return.
Moreover, the new procedure adopts a novel and, to our mind's eye, unwarranted expansion of the definition of what constitutes a change in accounting method.
2004-23 offered several procedural rules for filing Form 3115, Application for Change in Accounting Method, including:
The new procedure is generally effective for Forms 3115, Application for Change in Accounting Method, filed on or after May 15, 1997.
Making the election: For purposes of Line 1a, Form 3115, Application for Change in Accounting Method, the designated automatic accounting-method change numbers are 83 for changes to the full-inclusion method, 84 for the deferral method and 30 for the overall accrual-accounting method.
Hence, taxpayers complying with the procedure are generally accorded "back-year" protection against involuntary changes by the IRS in addition to prospective effect for the change in accounting method.
Tax Court: However, the Tax Court held that the taxpayer's change was not a change in accounting method.
Third, section 481 and the applicable revenue procedures generally allow a taxpayer several years to take into the income the effect of an unfavorable change in accounting method.
Even if there was a change in accounting method not exempt under the useful-life exception, there still was only one change, the one that was made for 1993.
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