The IRS last week modified the procedures under Section 446 of the tax code and Treasury Regulation Section 1.446-1(e) for obtaining automatic consent to change methods of accounting for research or experimental expenditures paid or incurred in tax years beginning after Dec. 31, 2021.
Specifically, Revenue Procedure 2024-34, issued by the IRS on Aug. 29, does the following:
- Expands the waiver of the eligibility rules in Rev. Proc. 2015-13 to accounting method changes described in Rev. Proc. 2024-23 that are made in any tax year beginning in 2022 or 2023.
- Permits a taxpayer to make changes under Rev. Proc. 2024-23 regardless of whether a change under that section has been filed for any other tax year beginning in 2022 or 2023.
Also, for any change made in a tax year beginning in 2022 or 2023 (other than the first tax year beginning after Dec. 31, 2021), Rev. Proc 2024-34 limits audit protection for research or experimental expenditures paid or incurred in the taxpayer’s first tax year beginning after Dec. 31, 2021, if the taxpayer failed to make a change for such expenditures in the applicable tax year, according to the IRS.
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