The IRS today released an advance version of Announcement 2016-14 stating that Form 3115, “Application for Change in Accounting Method,” was revised in December 2015 and that this version replaces the December 2009 version of Form 3115. Today’s announcement also provides a transition period for using the new version of Form 3115 (Rev. December 2015), and includes transition guidance.
The IRS on January 19, 2016, posted on its website a revised Form 3115, “Application for Change in Accounting Method,” and instructions (with a revision date of December 2015) to incorporate changes to the revised procedures for requesting accounting method changes made by Rev. Proc. 2015-13.
Form 3115 was slightly reorganized; a few questions on the prior version of Form 3115 were removed; and several new questions were added. The instructions contain more helpful material and guidance on information needed to respond fully to the questions on the form than the prior version of the Instructions.
Read a January 2016 report prepared by KPMG LLP describing the changes in Form 3115 (Rev. December 2015)
The transition relief provided today by Announcement 2016-14 [PDF 14 KB] states that in order to allow a reasonable transition to the December 2015 version of Form 3115, the IRS will accept either the December 2015 or December 2009 version of Form 3115 if filed on or before April 19, 2016—except when the use of the December 2015 version of Form 3115 is specifically required in guidance published in the Internal Revenue Bulletin.
Today’s IRS announcement further provides that taxpayers filing Forms 3115 after April 19, 2016, must use the December 2015 version of Form 3115. The IRS also “encourages” taxpayers to use the December 2015 version Form 3115 prior to April 20, 2016.
Regardless of the form used, the IRS stated that taxpayers must provide all the information required by Rev. Proc. 2015-13 (or Rev. Proc. 2011-14 if the taxpayer is making a change under the transition rule in Section 15.02(1)(a)(ii) of Rev. Proc. 2015-13, as modified by Rev. Proc. 2015-33).
Finally, for automatic change applications, Announcement 2016-14 permits a taxpayer that filed its duplicate copy on the 2009 version of Form 3115 with the IRS in either Ogden, Utah, or Covington, Kentucky, prior to April 20, 2016, to file that original 2009 version of Form 3115 with its federal income tax return for the year of change. This means that a taxpayer that has filed a Form 3115 with the IRS offices in Ogden or Covington before April 20, 2016, using the 2009 version of Form 3115 will not have to update its Form 3115 with the 2015 version to include with its federal income tax return, even though the return is not filed until after April 19, 2016.
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