The American Institute of CPAs (AICPA) has made recommendations to the Internal Revenue Service about accounting method change procedures established under Revenue Procedure (Rev. Proc.) 2015-13, Changes in Methods of Accounting, which establishes the procedures for taxpayers to obtain automatic changes in method of accounting and advance consent for an accounting method change.
The AICPA asked specifically that the IRS:
- Revise the three-month window period to refer to the two months prior to and one month following the extended due date of the taxpayer’s return so that it is consistent with the intent of the three-month window;
- Clarify that the special rule under section 8.02(5) of Rev. Proc. 2015-13, for a controlled foreign corporation or 10/50 corporation (referencing 150 percent of the average amount of foreign taxes deemed paid under sections 902 and 960 in the shareholder’s three prior taxable years) refers to the three taxable years immediately prior to the tax year of change; and
- Revise section 13.01(1) of Rev. Proc. 2015-13 to permit taxpayers to request to revise the year of change for a non-automatic Form 3115, Application for Change in Accounting Method, on or after the first day of the third month following the month in which the taxpayer’s federal income tax return is due (excluding extensions) for the original year of change requested on the taxpayer’s Form 3115.
In a comment letter to the IRS last November regarding Rev. Proc. 2015-13, the AICPA provided suggestions about how the IRS and the U.S. Department of the Treasury could better achieve their goal of encouraging voluntary compliance with proper tax accounting methods, while minimizing the administrative burdens of compliance.
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