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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
timely files Form 3115. See section 6.03(3)(a) of Rev. Proc.
2015-13.
Line 9. If you answered “Yes” to line 6a or 8a, complete line 9.
The information requested on line 9 should be included on a
separate attachment.
Line 10. If you answered “Yes,” attach an explanation. Unless
otherwise provided, the applicant does not receive audit
protection for the requested change if it is an issue under
consideration. See sections 3.08 and 8.02(7) of Rev. Proc.
2015-13.
Lines 11a–c. Unless otherwise provided, an applicant is not
eligible to file under the automatic change procedures if the
applicant made or requested a prior overall method change or a
prior item change (for the same item) within the 5 tax years
ending with the requested year of change. For additional details,
see section 9.03(6)(a) of Rev. Proc. 2023-1 and section 11.02(2)
of Rev. Proc. 2015-13.
Line 12. For further details, see section 9.03(6)(b) of Rev. Proc.
2022-1.
Line 13. If you answered “Yes,” complete Schedule A of Form
3115. For example, an overall accounting method change
includes a change from an accrual method to the cash receipts
and disbursements method or vice versa. See section 446(c).
Line 14. Provide the information requested on lines 14a–d if the
applicant answered “No” to question 13 or if the applicant
answered “Yes” to question 13 and is also changing to a special
accounting method for one or more items.
With the information requested on line 14b, the applicant is
also required to provide a statement of whether or not the
applicant has claimed any federal tax credit, grant, or subsidy
relating to the item(s) being changed (for example, the employee
retention credit for a change in method related to payroll taxes).
A special accounting method for an item is an accounting
method (other than the cash method or an accrual method)
expressly permitted by the Code, regulations, or guidance
published in the I.R.B. that deviates from the rules of sections
446, 451, and 461 (and the related regulations) that is applicable
to the applicant's overall accounting method (proposed overall
method if being changed). For example, the installment
accounting method under section 453, the mark-to-market
method under section 475, and the long-term contract method
under section 460 are special methods of accounting. See
section 15.01(2)(d) of Rev. Proc. 2022-14.
Lines 15a and 15b. Provide the requested information for each
applicant. For guidance on using different methods of
accounting for each trade or business, see section 446(d).
An applicant may include each member of a consolidated
group, each wholly owned partnership within a consolidated
group, each separate and distinct trade or business of each
member of a consolidated group or other entity (even if the
change is for all of a member's or other entity's trades or
businesses), and each eligible CFC or 10/50 corporation filing a
single Form 3115 requesting the identical accounting method
change. Also see
Who Must File, earlier.
Lines 16a–c. For non-automatic changes, the applicant is
required to provide a full explanation of the legal basis to support
the proposed method, including all authorities supporting the
proposed method, and a discussion of all contrary authorities.
For further details on what is to be included, see Rev. Proc.
2023-1, sections 7.01(9) (statement of supporting authorities),
9.03(1) (facts and other information), 9.03(2) (statement of
contrary authorities), 9.03(4) (analysis of material facts), and
9.03(7) (statement identifying pending legislation).
For the following automatic method changes, the applicant is
only required to complete lines 16a–b, unless the information on
lines 16a–b is otherwise provided in the applicable Form 3115
Schedules A–E: DCNs 6, 7, 28, 54, 55, 64, 65, 108, 111, 114,
127, 194, and 200 (only for changes listed in sections 6.12(3)(a)
(ix), 6.12(3)(a)(x), and 6.12(3)(b)(viii) in the List of Automatic
Changes; 205 (only for changes listed in sections 6.13(3)(h) and
6.13(3)(j) in the List of Automatic Changes); 206 (only for
changes listed in sections 6.14(3)(a), 6.14(3)(h), and 6.14(3)(j)
in the List of Automatic Changes; 207 (only for changes listed in
sections 6.15(3)(a) and 6.15(3)(d) in the List of Automatic
Changes); 211, 218, 231, 237, 241, 242, 250, 251, 252, 253,
254, 255, and 256. Line 16c does not need to be completed for
applicants filing automatic method changes. For further details
on what is to be included, see Rev. Proc. 2023-1, sections
7.01(9) (statement of supporting authorities), 9.03(1) (facts and
other information), and 9.03(4) (analysis of material facts).
If the automatic DCN is not specifically listed in the paragraph
above, or subsequent guidance released after the issuance of
these instructions, skip lines 16a–c.
Line 17. Insurance companies must also attach a statement
indicating whether the proposed accounting method will be used
for annual statement accounting purposes.
Line 18. For details on requesting and scheduling a
conference, see sections 9.04(4) and 10 of Rev. Proc. 2023-1.
Lines 19a and 19b. For certain automatic method changes, the
applicant must demonstrate that it meets the gross receipts test
under section 448(c) to qualify for the change. This gross
receipts test is met if a taxpayer has average annual gross
receipts for the 3 prior tax years at or below the inflation-adjusted
amount. See
Useful Items earlier, for guidance on the
inflation-adjusted amounts.
For the calculation of gross receipts for an overall accounting
method change request, whether an applicant qualifies as a
small business taxpayer for purposes of applying sections 263A
and 471, or whether an applicant qualifies as an eligible small
business under section 474(c), see section 448(c) and
Regulations section 1.448-2(c), and, as applicable, Regulations
section 1.263A-1(b)(1)(j) or Regulations section 1.471-1(a)(2).
For the calculation of gross receipts for determining whether
the applicant has an exempt construction contract under
Regulations section 1.460-3(b), for contracts entered into after
December 31, 2017, in tax years ending after December 31,
2017, see section 448(c) and Regulations sections 1.448-2(c)
and 1.460-3(b)(3).
Part III—Information for
Non-Automatic Change Request
Non-automatic change—scope and eligibility rules. An
applicant may not use the non-automatic change procedures if
any of the following eligibility limitations apply at the time Form
3115 is filed with the IRS National Office.
1. The change in accounting method is required to be made
according to a published automatic change procedure, such as
Rev. Proc. 2022-14.
2. The requested year of change is the final year of the trade
or business, unless (a) the change is a result of a transaction to
which section 381(a) applies; or (b) the applicant demonstrates
to the satisfaction of the IRS National Office compelling
circumstances, or that it is in the interest of sound tax
administration for the applicant to change in its final year.
Line 20. If you answered “Yes,” attach an explanation
describing why the applicant is not eligible to file a request under
the automatic change procedures.
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