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subject to the income forecast method under section 167(g) and

change applies only if, before June 15, 2006, the applicant filed

placed in service by the applicant after October 22, 2004, to

its federal tax return for the tax year in which the reforestation

elect either to include in the adjusted basis of the property,

expenditures were paid or incurred. This change must be filed

participations and residuals expected to be paid before the end

with the applicant’s federal tax return for the first or second tax

of the tenth tax year following the tax year in which the property

year ending on or after December 31, 2005. Scope limitations

is placed in service, or to exclude participations and residuals

do not apply. See Notice 2006-47, 2006-20 I.R.B. 892.

from the adjusted basis of the property and deduct the

102. Election to treat certain desulfurization costs as

participations and residuals in the tax year that the

expenses (section 179B) — for a small business refiner (as

participations and residuals are paid. This change applies only

defined in section 45H(c)(2)), to elect to deduct 75 percent of

if, before June 15, 2006, the applicant filed its federal tax return

qualified capital costs (as defined in section 45H(c)(2)) paid or

for the tax year during which the property was placed in service.

incurred after December 31, 2002, in tax years ending after that

This change must be filed with the applicant’s federal tax return

date. This change applies only if, before June 15, 2006, the

for the first or second tax year ending on or after December 31,

applicant filed its federal tax return for the tax year in which the

2005. Scope limitations do not apply. See Notice 2006-47,

qualified capital costs were paid or incurred. This change must

2006-20 I.R.B. 892.

be filed with the applicant’s federal tax return for the first or

100. Election to treat the cost of any qualified film or

second tax year ending on or after December 31, 2005. Scope

television production as an expense (section 181) — for any

limitations do not apply. See Notice 2006-47, 2006-20 I.R.B.

qualified film or television production subject to section 181 for

892.

which the applicant begins principal photography after October

103. Qualifying electric transmission transactions (section

22, 2004, but first paid or incurred costs of the production

451(i)) — for qualified gain from a qualifying electric

before October 23, 2004, to elect to treat the costs of the

transmission transaction, to recognizing all or part of the

production as an expense, as provided for in section 181. This

qualified gain ratably over the 8-year period beginning with the

change applies only if, before June 15, 2006, the applicant filed

year that includes the date of the transaction, as provided in

its federal tax return for the tax year in which the costs of the

section 451(i). This change applies only if, before June 15,

production were first paid or incurred. This change must be filed

2006, the applicant filed its federal tax return for the tax year in

with the applicant’s federal tax return for the first or second tax

which the qualified electric transmission transaction occurred.

year ending on or after December 31, 2005. Scope limitations

This change must be filed with the applicant’s federal tax return

do not apply. See Notice 2006-47, 2006-20 I.R.B. 892.

for the first or second tax year ending on or after December 31,

101. Election to treat reforestation expenditures as

2005. Scope limitations do not apply. See Notice 2006-47,

expenses (section 194) — for any qualified timber property, to

2006-20 I.R.B. 892.

elect to deduct reforestation expenditures paid or incurred after

October 22, 2004, as provided for in section 194(b). This

Privacy Act and Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws

of the United States. Section 446(e) says that you must obtain IRS approval before you change your method of accounting, except

where otherwise provided. To obtain this approval, you are required to provide the information requested on this form. This

information will be used to ensure that you are complying with the applicable laws, and to figure and collect the right amount of tax.

Failure to provide all of the information requested may prevent processing of this form. Providing false information may subject you

to penalties. Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation, and to

cities, states, and the District of Columbia for use in the administration of their tax laws. We may also disclose this information

including giving it to Federal and state agencies to enforce Federal non-tax criminal laws and to combat terrorism.

You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the

form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their

contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are

confidential, as required by section 6103.

The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for

individual taxpayers filing this form is approved under OMB control number 1545-0074 and is included in the estimates shown in the

instructions for their individual income tax return. The estimated burden for all other taxpayers who file this form is shown below.

Learning about the law

Preparing and sending

Form

Recordkeeping

or the form

the form to the IRS

3115

38 hr., 29 min.

19 hr., 54 min.

23 hr., 48 min.

Sch. A

3 hr., 21 min.

1 hr., 51 min.

3 hr., 11 min.

Sch. B

1 hr., 25 min.

30 min.

33 min.

Sch. C

5 hr., 1 min.

45 min.

2 hr., 4 min.

Sch. D

27 hr., 30 min.

1 hr., 59 min.

2 hr., 31 min.

Sch. E

3 hr., 49 min.

1 hr., 59 min.

2 hr., 8 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be

happy to hear from you. You can write to the Internal Revenue Service, Tax Products Coordinating Committee,

SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW, IR-6406, Washington, DC 20224. Do not send the tax form to this office.

Instead, see When and Where To File on page 2.

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Instructions For Form 3115 - Application For Change In Accounting Method - Internal Revenue Service - 2006 Page 16

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