The IRS has made changes to Form 3115 (Application for Change in Accounting Method) that incorporate additions / modifications to the Revenue Procedures 2015-13 and 2015-14.
It is has been seven years since changes were last made to the form, so it’s kind of a big deal. Here are five things you need to know about the modifications:
Use of a single form. Taxpayers now have the ability to list multiple automatic method change numbers on a single Form 3115 (where multiple method changes that are permitted to be requested on one Form 3115).
Revision of eligibility questions. The IRS has revised questions concerning new eligibility rules of Rev. Proc. 2015-13. This includes the election to recognize a positive section 481(a) adjustment in full in the year of change for de minimis adjustments of less than $50,000, or where an eligible transaction occurs during the year of change or in the subsequent year).
Requirement to provide legal basis for automatic changes. There is now a requirement to provide a legal basis for any proposed method of accounting for both automatic and non-automatic method changes. This only applied to non-automatic changes in the past.
Changes in depreciation. This IRS is now requiring taxpayers to indicate whether property subject to a change in depreciation (for which Schedule E of the Form 3115 is required) will be included in a single, mass, or general-asset account.
Revision of Section 381 questions. Questions revised for applicant(s) subject to the special accounting method rules under section 381 and the regulations thereunder to reflect recent changes to these rules.
New filing location. In addition to the above, the IRS has indicated that filing a duplicate copy of Form 3115 for an automatic accounting method change request must now be done at this address:
Internal Revenue Service
201 West Rivercenter Blvd.
PIN Team Mail Stop 97
Covington, KY 41011-1424
Need More information? On May 16, 2016 Surgent will host Changing a Method of Accounting Using the New Form 3115. This two-hour CPE webinar featuring Mike Tucker and David McGuire will cover the process of changing a method of accounting generally and take an in-depth look at how to prepare and what to disclose on the new Form 3115 as well as transitional rules and grace period provisions applicable to the old Form 3115. Tucker and McGuire will also review the process of implementing a change in accounting in accordance with the final repair regulations. Registration for the course is $89.00 or no charge for Surgent customers with a 2016 unlimited webinar package. More information/register