Form 3115 - Missed Depreciation Page 5
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If the taxpayer filed Form 3115 before Chief Counsel Notice 2004-007, and all years
affected by the §481(a) adjustment are still open for assessment under the statute of
limitations, the taxpayer can undo the Form 3115 and file an amended return to
implement the change.
Changing Accounting Method
Taxpayers can get automatic approval from the IRS to change their method of accounting for
depreciation under Rev. Proc. 2015-13 (modified by Rev. Proc. 2015-33). Taxpayers can
recoup missed or understated allowable depreciation from open and closed years using this
revenue procedure, and the approval is automatic, thus no user fee applies.
NOTE: If taxpayers do not qualify to use the automatic consent procedures, they can use the
advance consent request procedures covered in Rev. Proc. 2015-13.
Rev. Proc. 2015-13 applies to taxpayers who are changing from an impermissible to a
permissible method of accounting for depreciation for any item of depreciable property that
meets all of the following basic requirements.
The taxpayer used the impermissible method of accounting for depreciation in at least
two taxable years immediately preceding the year of change (one year for property
placed in service in the taxable year immediately preceding the year of change).
The property must be owned by the taxpayer at the beginning of the year of change,
except for property disposed of before the year of change.
The property must be depreciable under §56(a)(1) (AMT depreciation), §56(g)(4)(A)
(ACE depreciation), §§167 and 168 (ACRS and MACRS), §197 (amortization), §1400I
(commercial revitalization deduction), or §1400L (New York Liberty Zone property), or
under any first-year bonus depreciation provisions.
The change in depreciation is a change in method of accounting under §1.446-
1(e)(2)(ii)(d).
NATP
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P.O. Box 8002
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Appleton, Wisconsin 54912
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800.558.3402
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