Instructions For Form 3115 - Application For Change In Accounting Method - Internal Revenue Service - 2006


Department of the Treasury
Instructions for Form 3115
Internal Revenue Service
(Rev. May 2006)
(Use with the December 2003 revision of Form 3115)
Application for Change in Accounting Method
Section references are to the Internal Revenue Code unless
section 9.17 of Rev. Proc. 2006-1. A user fee is required. See
otherwise noted.
the instructions for Part III on page 6 for more information.
All references to Rev. Proc. 97-27 are to Rev. Proc. 97-27,
For general rules on changing an accounting method under:
1997-21 I.R.B. 10 (as modified and amplified by Rev. Proc.
2002-19, 2002-13 I.R.B. 696, as amplified and clarified by Rev.
Automatic change
See Rev. Proc. 2002-9, as modified by
Proc. 2002-54, 2002-35 I.R.B. 432), or its successor.
request procedures . . . Announcement 2002-17, Rev. Proc.
2002-19, and Rev. Proc. 2002-54.
All references to Rev. Proc. 2002-9 are to Rev. Proc.
2002-9, 2002-3 I.R.B. 327 (as modified and clarified by
Advance consent
See Rev. Proc. 97-27, as modified by
Announcement 2002-17, 2002-8 I.R.B. 561, modified and
request procedures . . . Rev. Proc. 2002-19 and Rev. Proc.
amplified by Rev. Proc. 2002-19, and amplified, clarified and
modified by Rev. Proc. 2002-54), or its successor.
For more information, see Rev. Proc. 2006-1, particularly section 9.
All references to Rev. Proc. 2006-1 are to Rev. Proc.
2006-1, 2006-1 I.R.B. 1, or its successor.
When filing Form 3115, applicants must determine if the IRS
General Instructions
has published an accounting method revenue procedure,
revenue ruling, notice, regulation, or other published guidance
relating to the specific method the applicant is requesting to
Purpose of Form
change. This guidance is published in the Internal Revenue
File Form 3115 to request a change in either an overall
Bulletin. For years after 1995, Internal Revenue Bulletins are
accounting method or the accounting treatment of any item. File
available at
a separate Form 3115 for each unrelated item or submethod,
For more information, see Pub. 538, Accounting Periods and
unless the IRS specifically permits (in published guidance) a
change for more than one unrelated item or submethod to be
requested on a single Form 3115.
Who Must File
Two procedures exist under which an applicant may request
Generally, a Form 3115 must be filed by or on behalf of each
a change in accounting method:
applicant seeking consent to change an accounting method. An
Automatic Change Request. Unless otherwise provided in
“applicant” is a taxpayer or a separate and distinct trade or
published guidance, you must file under the automatic change
business of a taxpayer (for purposes of Regulations section
request procedures if (a) the accounting method change is
1.446-1(d)), including a qualified subchapter S subsidiary
included in those procedures for the requested year of change,
(QSUB) or a single-member limited liability company
and (b) you are within the scope of those procedures for the
(single-member LLC), whose accounting method is being
requested year of change (see Automatic Change Request
Scope Limitations on page 4). A Form 3115 filed under these
For a consolidated group of corporations, the parent
procedures may be reviewed by the IRS and you will be notified
corporation must file the Form 3115 for a change in accounting
if information in addition to that requested on Form 3115 is
method for itself or any member of the consolidated group. For
required or if your request is denied. No user fee is required. An
a controlled foreign corporation (CFC) or 10/50 corporation
applicant that timely files and complies with an automatic
without a U.S. trade or business, the Form 3115 must be filed,
change request procedure is granted consent to change its
respectively, by the controlling U.S. shareholder(s) or majority
accounting method, subject to review by the IRS National Office
domestic corporate shareholder(s). If the U.S. shareholder(s) is
and operating division director. See the instructions for Part I on
a member of a consolidated group, the parent corporation must
page 4 for more information and the List of Automatic
file Form 3115 for the U.S. shareholder on behalf of the foreign
Accounting Method Changes beginning on page 9.
Advance Consent Request. If you are not within the scope
Generally, a separate Form 3115 must be filed for each
of the automatic change request procedures for the requested
applicant that is part of a related group of corporations or that is
year of change or the accounting method change you are
a separate and distinct trade or business of a taxpayer,
requesting is not included in those procedures for the requested
including a QSUB or single-member LLC. However, a single
year of change, you may be able to file under the advance
Form 3115 may be filed for multiple applicants in the following
consent request procedures (see Advance Consent Request
Scope Limitations on page 6). If the requested change is
approved, the filer will receive a letter ruling on the requested
1. A taxpayer requesting an identical accounting method
change. A taxpayer may not take an advance consent change
change for two or more separate and distinct trades or
in accounting method into account in any federal income tax
businesses (for purposes of Regulations section 1.446-1(d)) of
return until the taxpayer receives the letter ruling granting
that taxpayer, including a QSUB or single-member LLC;
permission to make the accounting method change and the
2. A common parent of a consolidated group requesting an
taxpayer signs and returns the Consent Agreement copy of that
identical accounting method change on behalf of two or more
letter ruling. See Regulations section 1.446-1(e)(2)(i) and
members of the consolidated group;
Cat. No. 63215H


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