Instructions For Form 3115 (Rev. December 2015) printable pdf download

Instructions for Form 3115

Department of the Treasury

Internal Revenue Service

(Rev. December 2015)

Application for Change in Accounting Method

Section references are to the Internal Revenue Code unless

you are required or permitted to file a single Form 3115 for

otherwise noted.

particular concurrent changes in method of accounting. See

section 6.03(1)(b) of Rev. Proc. 2015-13 for more information.

All references to Rev. Proc. 2015-13 are to Rev. Proc. 2015-13,

Reduced filing requirement. A qualified small taxpayer

2015-5 I.R.B. 419 (as clarified and modified by Rev. Proc.

qualifies for a reduced Form 3115 filing requirement for certain

2015-33), or its successor.

automatic accounting method changes (for example, a change

All references to Rev. Proc. 2015-14 and the List of Automatic

under

section 6.01 of Rev. Proc. 2015-14

(DCN7)). DCN stands

Changes are to Rev. Proc. 2015-14, 2015-5 I.R.B. 450, or its

for “Designated automatic accounting method change”. A

successor.

qualified small taxpayer is a taxpayer with average annual gross

receipts of less than or equal to $10 million for the three taxable

All references to Rev. Proc. 2016-1 are to Rev. Proc. 2016-1,

years preceding the year of change. See Year of Change, later.

2016-1 I.R.B. 1, or its successor (updated annually).

For qualifying changes and filing requirements, see the List of

Automatic Changes.

General Instructions

Non-automatic change procedures. If you do not qualify to

file under the automatic change procedures for the requested

Future Developments

change in method of accounting for the requested year of

For the latest information about developments related to Form

change, you may be able to file under the non-automatic change

3115 and its instructions, such as legislation enacted after they

procedures. See Non-automatic change—Scope and Eligibility

were published, go to

Rules, in Part III, later. If the requested change is approved by

the IRS National Office, the filer will receive a letter ruling on the

What's New

requested change. File a separate Form 3115 for each unrelated

item or submethod. A user fee is required. See the instructions

Change of filing address.

for Part III, later, for more information.

Beginning in January 2016, the copy of Form 3115 for

Filing exception for certain first-year tangible property

automatic change requests should be sent to the Covington,

changes. A small business taxpayer may make certain tangible

Kentucky Service Center. See the address chart on page 2.

property changes in method of accounting for its first taxable

Exempt organizations file at the same address as other filers

year beginning on or after January 1, 2014 without filing a Form

of Form 3115. See the address chart on page 2.

3115. Under these special procedures, the change in method of

Purpose of Form

accounting is effectively made on a cut-off basis. These special

method change procedures apply to small business taxpayers

File Form 3115 to request a change in either an overall method

making certain method changes to comply with Regulations

of accounting or the accounting treatment of any item.

sections 1.263(a)-3 and 1.168(i)-8. A small business taxpayer is

a business with total assets of less than $10 million or average

Method Change Procedures

annual gross receipts of less than or equal to $10 million for the

When filing Form 3115, you must determine if the IRS

prior three taxable years. For more details about eligibility and

has issued any new published guidance which includes

these special method change procedures, see Rev. Proc.

revenue procedures, revenue rulings, notices,

2015-20, 2015-9 I.R.B. 694.

CAUTION

regulations, or other relevant guidance in the Internal Revenue

Who Must File

Bulletin. For the latest information, visit

The filer is the entity or person required to file Form 3115,

For general application procedures on requesting accounting

whether on its own behalf or on behalf of another entity. An

method changes, see Rev. Proc. 2015-13. Rev. Proc. 2015-13

applicant is an entity, a person, or a separate and distinct trade

provides procedures for both automatic and non-automatic

or business of an entity or a person (for purposes of Regulations

changes in method of accounting.

section 1.446-1(d)), whose method of accounting is being

Automatic change procedures. Unless otherwise provided in

changed.

published guidance, you must file under the automatic change

For a consolidated group of corporations, the common parent

procedures if you are eligible to request consent to make a

corporation must file Form 3115 for a change in method of

change in your method of accounting under the automatic

accounting for itself and for any member of the consolidated

change procedures for the requested year of change. See the

group. For example, the common parent corporation of a

instructions for Part I later, and the List of Automatic Changes.

consolidated group is the filer when requesting a change in

A Form 3115 filed under these procedures may be reviewed

method of accounting for another member of that consolidated

by the IRS. If it is, you will be notified if information in addition to

group (or a separate and distinct trade or business of that

that requested on Form 3115 is required or if your request is

member), and the other member (or trade or business) on

denied. No user fee is required. An applicant that timely files and

whose behalf Form 3115 is filed is the applicant.

complies with the automatic change procedures is granted

For information on the difference between a filer and an

consent to change its accounting method, subject to review by

applicant, see the Name(s) and Signature(s) section, later.

the IRS National Office and operating division director.

For a Controlled Foreign Corporation (CFC) or 10/50

Ordinarily, you are required to file a separate Form 3115 for

corporation without a U.S. trade or business, see section 6.02(6)

each change in method of accounting. However, in some cases

of Rev. Proc. 2015-13.

Jan 14, 2016

Cat. No. 63215H

Instructions For Form 3115 (Rev. December 2015)

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