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$50,000,000 to the overall cash receipts and disbursements

day of the 3rd calendar month after the end of that tax year.

method. See section 14.11 in the Appendix to Rev. Proc.

See section 19.01(3) in the Appendix to Rev. Proc. 2008-52, as

2008-52.

amplified and clarified by Rev. Proc. 2009-39.

127. Change to overall cash/hybrid method for certain

135. Rebates and allowances (section 461) — for an accrual

banks (section 446) — for an eligible bank, as defined in

method applicant’s liability for rebates and allowances to the

section 14.12(2)(a) in the Appendix to Rev. Proc. 2008-52, to

recurring item exception method under section 461(h)(3) and

an overall cash/hybrid method described in section 14.12(2)(b)

Regulation section 1.461-5. See section 19.07 in the Appendix

in the Appendix to Rev. Proc. 2008-52. See section 14.12 in the

to Rev. Proc. 2008-52.

Appendix to Rev. Proc. 2008-52.

136. Change from an improper method of inclusion of

128. Change to overall cash method for farmers (section

rental income or expense to inclusion in accordance with

446) — for a qualifying applicant engaged in the trade or

the rent allocation (section 467) — for an applicant that is a

business of farming to the overall cash receipts and

party to a section 467 rental agreement; and is changing its

disbursements method. See section 14.13 in the Appendix to

method for its fixed rent to the rent allocation method provided

Rev. Proc. 2008-52.

in Regulation section 1.467-1(d)(2)(iii). See section 20.01 in the

Appendix to Rev. Proc. 2008-52, as modified and clarified by

129. Nonshareholder contributions to capital under

Rev. Proc. 2009-39.

section 118 (section 446) — from excluding from gross

income under section 61 certain payments or the fair market

137. Permissible methods of inventory identification and

value of property received (including customer connection fees

valuation (section 471) — for an applicant changing from one

received by a regulated public utility described in section

permissible method of identifying and valuing inventories to

118(c)), by characterizing the payments or the fair market value

another permissible method of identifying and valuing

of property as nontaxable contributions to capital under section

inventories that is not a change described in another section in

118(a), to including the payments or the fair market value of

the Appendix to Rev. Proc. 2008-52 or in other guidance

property in gross income under section 61. This change also

published in the IRB. See section 21.11 in the Appendix to Rev.

applies to a regulated public utility described in section 118(c)

Proc. 2008-52, as clarified by Rev. Proc. 2009-39.

that changes from including in gross income under section 61

138. Change in the official used vehicle guide utilized in

payments or fair market value of property received that are

valuing used vehicles (section 471) — for a used vehicle

contributions in aid of construction under section 118(c) and

dealer from not using an official used vehicle guide for valuing

Regulation section 1.118-2 and that meet the requirements of

used vehicles to using an official used vehicle guide for valuing

sections 118(c)(1)(B) and 118(c)(1)(C) to excluding from

used vehicles; or from using an official used vehicle guide for

income the payments or the fair market value of the property as

valuing used vehicles to using a different official used vehicle

nontaxable contributions to capital under sections 118(a). See

guide for valuing used vehicles. See section 21.12 in the

section 14.14 in the Appendix to Rev. Proc. 2008-52, as

Appendix to Rev. Proc. 2008-52.

modified by Rev. Proc. 2009-39.

139. Invoice advertising association costs for new vehicle

130. Retainages (section 451) — for an accrual method

retail dealerships (section 471) — for an applicant engaged in

applicant’s retainages under section 451 to a method with the

the trade or business of retail sales of new automobiles or new

holding in Rev. Rul. 69-314, 1969-1 C.B. 319. This change

light-duty trucks (dealership) from capitalizing certain

does not apply to retainages under long-term contracts as

advertising costs as acquisition costs under Regulation section

defined in section 460(f). An applicant changing its method of

1.471-3(b) to deducting the advertising costs under section 162

accounting under this section must treat all retainages

as the advertising services are provided to the dealership. See

(receivables and payables) in the same manner. See section

Regulation section 1.461-4(d)(2)(i), and section 21.13 in the

15.10 in the Appendix to Rev. Proc. 2008-52, as modified by

Appendix to Rev. Proc. 2008-52.

Rev. Proc. 2009-39.

140. Changes within the Used Vehicle Alternative LIFO

131. Series E, EE, or I U.S. savings bonds (section 454) —

Method (section 472) — for a taxpayer using the Used Vehicle

for a cash method taxpayer changing the taxpayer’s method of

Alternative LIFO Method, as described in Rev. Proc. 2001-23,

accounting for interest income on Series E, EE, or I U.S.

2001-1 C.B. 784, as modified by Announcement 2004-16,

savings bonds from reporting as interest income the increase in

2004-1 C.B. 668, and Rev. Proc. 2008-23, 2008-12 I.R.B. 664,

redemption price on a bond occurring in a tax year to reporting

to use a different “official used vehicle guide” in conjunction

this income in the tax year in which the bond is redeemed,

with the Used Vehicle Alternative LIFO Method, or to a different

disposed of, or finally matures, whichever is earliest. A

precise manner of using an official used vehicle guide (for

statement in lieu of a Form 3115 is authorized for this change.

example, a change in the specific guide category that an

See section 16.01 in the Appendix to Rev. Proc. 2008-52.

applicant uses to represent vehicles of average condition for

132. Prepaid subscription income (section 455) — for an

purposes of section 4.02(5)(a) of Rev. Proc. 2001-23). See

accrual method applicant changing its method of accounting for

section 22.09 in the Appendix to Rev. Proc. 2008-52.

prepaid subscription income to the method described in section

141. Changes to dollar-value pools of manufacturers

455 and the related regulations, including an eligible applicant

(section 472) — for a manufacturer that purchases goods for

that wants to make the “within 12 months” election under

resale (resale goods) and thus must reassign resale goods from

Regulations section 1.455-2. A statement in lieu of a Form 3115

the pool(s) it maintains for the goods it manufactures to one or

is authorized for this change. See section 17.01 in the Appendix

more resale pools, and the manufacturer wants to change from

to Rev. Proc. 2008-52.

using multiple pools described in Regulation section

133. Timing of incurring liabilities for bonuses (section

1.472-8(b)(3) to using natural business unit (NBU) pools

461) — to treat bonuses as incurred in the tax year in which all

described in Regulation section1.472-8(b)(1), or vice versa; or

events have occurred that establish the fact of the liability to

wants to reassign items in NBU pools described in Regulation

pay a bonus and the amount of the liability can be determined

section 1.472-8(b)(1) into the same number or a greater

with reasonable accuracy. The applicant may make this change

number of NBU pools. See section 22.10 in the Appendix to

if the bonus is received by the employee by the 15th day of the

Rev. Proc. 2008-52, as clarified by Rev. Proc. 2009-39.

3rd calendar month after the end of that tax year. See section

142. Basis of certain securities sold or transferred

19.01(2) in the Appendix to Rev. Proc. 2008-52, as amplified

(section 1012) — for an applicant that sells or transfers shares

and clarified by Rev. Proc. 2009-39.

of stock in a corporation, bonds, or book-entry securities (as

134. Timing of incurring liabilities for vacation pay

defined in Regulation section 1.1012-1(c)(7)(iii)), to the method

(section 461) — to treat vacation pay as incurred in the tax

provided in Regulation section 1.1012-1(c)(1) for determining

year in which all events have occurred that establish the fact of

basis in the securities sold or transferred. See section 30.01 in

the liability to pay vacation pay, and the amount of the liability

the Appendix to Rev. Proc. 2008-52.

can be determined with reasonable accuracy. The applicant

143. Materials and supplies (section 162) — for an applicant

may make this change if the vacation pay vests in that tax year

changing to the method of accounting described in Regulations

and the vacation pay is received by the employee by the 15th

section 1.162-3 to treat materials and supplies as a deferred

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Instructions For Form 3115 - Application For Change In Accounting Method - Internal Revenue Service - 2009 Page 16

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