New Deadline For Accounting Method Changes

The Internal Revenue Service (IRS) last week issued new timelines for submitting accounting method change requests. The new protocol, which waives the 90-day window previously allotted for submitting accounting method change requests, does not change the method of submitting those requests.


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Under the new guidelines, requests for consent to change accounting methods may be submitted by the taxpayer during the taxable year in which the taxpayer wants make the change in the method of accounting. Requests submitted in accordance with this revenue procedure may be submitted by the later of
  • the last day of the taxable year in which the distribution or transfer occurred or
  • the day that is 180 days after the date of distribution or transfer or the day on which the taxpayer files federal income tax returns of the taxable year in which the distribution or transfer occurred, whichever is earlier.

The new protocol affects regulations requiring applications concerning a change in accounting method be filed within a 90-day period including:

  • Taxpayers who previously elected to include the amount of loans from the Community Credit Corporation in gross income for the taxable year in which the loans were received.
  • An acquiring corporation applying to use a method of accounting or requesting a determination of the method of accounting to be used.
  • An acquiring corporation applying to use a method of taking inventories or a requesting a determination of the method of taking inventories to be used.
  • A taxpayer electing to apply the provisions of § 455 to any trade or business in which the taxpayer receives prepaid subscription income.
  • A taxpayer electing to apply provisions of § 456 to any trade or business in which the taxpayer receives prepaid dues income.
  • A taxpayer electing to accrue real property taxes ratably.

The changes went into effect August 16, 2005. Details regarding the exact regulations and sections affected can be found on the IRS website.

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