IRS Considering Transition Relief for Form 3115 Users

The IRS is considering providing transition relief to users of Form 3115, Application for Change in Accounting Method, according to Kathleen Reed, Internal Revenue Service branch chief (Income Tax and Accounting).

 

Reed noted that numerous tax professionals had raised questions about the scope of Form 3115, which has incorporated revisions made to the granting of automatic and non-automatic accounting method changes and the tax treatment of tangible property.  Requests for relief have focused on questions about when taxpayers would have to start using the new form, and the possibility of allowing fiscal-year taxpayers who were using the old accounting method procedures and form to continue to use them.  The IRS has apparently heard the comments and agrees clarification is appropriate. 

 

Reed pointed to Announcement 2010-32, saying the new guidance would look something like that, In Announcement 2010-32, the IRS replaced an older version of the form with a newer one but allowed taxpayers to use either version for a certain period of time, stipulating that after a certain date they would have to use the newer version.

 

Reed cautioned that, "This time there are many more changes to the form than we had in 2010, so I don't want to say it is going to look exactly like that."  The new form released in January was significantly overhauled.  Fiscal-year taxpayers are allowed to use the old procedures, Reed said, and it isn't clear if there would be a date cutoff or not.