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Department of the Treasury

Instructions for Form 3115

Internal Revenue Service

(Rev. May 2006)

(Use with the December 2003 revision of Form 3115)

Application for Change in Accounting Method

Section references are to the Internal Revenue Code unless

section 9.17 of Rev. Proc. 2006-1. A user fee is required. See

otherwise noted.

the instructions for Part III on page 6 for more information.

All references to Rev. Proc. 97-27 are to Rev. Proc. 97-27,

For general rules on changing an accounting method under:

1997-21 I.R.B. 10 (as modified and amplified by Rev. Proc.

2002-19, 2002-13 I.R.B. 696, as amplified and clarified by Rev.

Automatic change

See Rev. Proc. 2002-9, as modified by

Proc. 2002-54, 2002-35 I.R.B. 432), or its successor.

request procedures . . . Announcement 2002-17, Rev. Proc.

2002-19, and Rev. Proc. 2002-54.

All references to Rev. Proc. 2002-9 are to Rev. Proc.

2002-9, 2002-3 I.R.B. 327 (as modified and clarified by

Advance consent

See Rev. Proc. 97-27, as modified by

Announcement 2002-17, 2002-8 I.R.B. 561, modified and

request procedures . . . Rev. Proc. 2002-19 and Rev. Proc.

amplified by Rev. Proc. 2002-19, and amplified, clarified and

2002-54.

modified by Rev. Proc. 2002-54), or its successor.

For more information, see Rev. Proc. 2006-1, particularly section 9.

All references to Rev. Proc. 2006-1 are to Rev. Proc.

2006-1, 2006-1 I.R.B. 1, or its successor.

When filing Form 3115, applicants must determine if the IRS

General Instructions

has published an accounting method revenue procedure,

revenue ruling, notice, regulation, or other published guidance

relating to the specific method the applicant is requesting to

Purpose of Form

change. This guidance is published in the Internal Revenue

File Form 3115 to request a change in either an overall

Bulletin. For years after 1995, Internal Revenue Bulletins are

accounting method or the accounting treatment of any item. File

available at

a separate Form 3115 for each unrelated item or submethod,

For more information, see Pub. 538, Accounting Periods and

unless the IRS specifically permits (in published guidance) a

Methods.

change for more than one unrelated item or submethod to be

requested on a single Form 3115.

Who Must File

Two procedures exist under which an applicant may request

Generally, a Form 3115 must be filed by or on behalf of each

a change in accounting method:

applicant seeking consent to change an accounting method. An

Automatic Change Request. Unless otherwise provided in

“applicant” is a taxpayer or a separate and distinct trade or

published guidance, you must file under the automatic change

business of a taxpayer (for purposes of Regulations section

request procedures if (a) the accounting method change is

1.446-1(d)), including a qualified subchapter S subsidiary

included in those procedures for the requested year of change,

(QSUB) or a single-member limited liability company

and (b) you are within the scope of those procedures for the

(single-member LLC), whose accounting method is being

requested year of change (see Automatic Change Request

changed.

Scope Limitations on page 4). A Form 3115 filed under these

For a consolidated group of corporations, the parent

procedures may be reviewed by the IRS and you will be notified

corporation must file the Form 3115 for a change in accounting

if information in addition to that requested on Form 3115 is

method for itself or any member of the consolidated group. For

required or if your request is denied. No user fee is required. An

a controlled foreign corporation (CFC) or 10/50 corporation

applicant that timely files and complies with an automatic

without a U.S. trade or business, the Form 3115 must be filed,

change request procedure is granted consent to change its

respectively, by the controlling U.S. shareholder(s) or majority

accounting method, subject to review by the IRS National Office

domestic corporate shareholder(s). If the U.S. shareholder(s) is

and operating division director. See the instructions for Part I on

a member of a consolidated group, the parent corporation must

page 4 for more information and the List of Automatic

file Form 3115 for the U.S. shareholder on behalf of the foreign

Accounting Method Changes beginning on page 9.

corporation.

Advance Consent Request. If you are not within the scope

Generally, a separate Form 3115 must be filed for each

of the automatic change request procedures for the requested

applicant that is part of a related group of corporations or that is

year of change or the accounting method change you are

a separate and distinct trade or business of a taxpayer,

requesting is not included in those procedures for the requested

including a QSUB or single-member LLC. However, a single

year of change, you may be able to file under the advance

Form 3115 may be filed for multiple applicants in the following

consent request procedures (see Advance Consent Request

situations.

Scope Limitations on page 6). If the requested change is

approved, the filer will receive a letter ruling on the requested

1. A taxpayer requesting an identical accounting method

change. A taxpayer may not take an advance consent change

change for two or more separate and distinct trades or

in accounting method into account in any federal income tax

businesses (for purposes of Regulations section 1.446-1(d)) of

return until the taxpayer receives the letter ruling granting

that taxpayer, including a QSUB or single-member LLC;

permission to make the accounting method change and the

2. A common parent of a consolidated group requesting an

taxpayer signs and returns the Consent Agreement copy of that

identical accounting method change on behalf of two or more

letter ruling. See Regulations section 1.446-1(e)(2)(i) and

members of the consolidated group;

Cat. No. 63215H

Instructions For Form 3115 - Application For Change In Accounting Method - Internal Revenue Service - 2006

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