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activities of a financial institution (for example, a lending

5. The applicant engages in a transaction to which section

institution, a regulated investment company, a real estate

381(a) applies within the proposed tax year of change. For

investment trust, a real estate mortgage investment conduit,

more information, including exceptions to this limitation, see

etc.).

section 4.02(7) of Rev. Proc. 2002-9.

•

6. The applicant is in the final tax year of its trade or

Other. For advance consent requests, check this box if

business as described in sections 4.02(8) and 5.04(3)(c) of

neither of the above boxes applies to the requested change.

Rev. Proc. 2002-9.

State the type of method change being requested and, in the

space provided, enter a short description of the change (for

Line 1. Enter the designated automatic accounting method

example, LIFO to FIFO, change within section 263A costs,

change number on line 1(a). These numbers may be found in

deduction of warranty expenses, changes to the completed

the List of Automatic Accounting Method Changes

contract method for long-term contracts, etc.). For automatic

beginning on page 9, or in subsequently published guidance. In

change requests, this informational requirement is satisfied by

general, enter a number for only one change. However, in

properly completing Part I, line 1 of Form 3115.

certain limited circumstances, the numbers for two changes

may be entered on line 1(a). The List of Automatic

Follow the instructions below to correctly complete Form

Accounting Method Changes specifies which requests for

TIP

3115.

change in accounting method may be made with another

•

request for change.

Applicants requesting to change an accounting method using

the automatic change request procedures must complete Parts

If the accounting method change is not included in the List

I, II, and IV.

of Automatic Accounting Method Changes or assigned a

•

Applicants requesting a change to an accounting method

number in the published guidance providing the automatic

using the advance consent request procedures must complete

accounting method change, the filer should check the box for

Parts II, III, and IV.

line 1(b) and identify the revenue procedure or other published

•

All applicants must complete Schedules A, B, C, D, and E,

guidance under which the accounting method change is being

as applicable, for the change in accounting method requested.

requested.

•

Attachments submitted with Form 3115 must show the filer’s

Filers who properly complete line 1 have fulfilled the label

name and identification number. Also, indicate that the

requirements of section 6.02(4)(a) of Rev. Proc. 2002-9 and

information is an attachment to Form 3115.

any similar requirements in other guidance.

•

Report amounts in U.S. dollars, translated, if necessary,

Line 2. An applicant filing under the automatic change request

from functional currency with a statement of exchange rates

procedures should review the applicable accounting method

used.

•

change section in the Appendix of Rev. Proc. 2002-9, or the

If more room is needed to respond to any line, attach a

procedures in other published guidance, if applicable, to

schedule labeled with the line number providing the applicable

determine if the scope limitations of section 4.02 of Rev. Proc.

information.

2002-9, as modified by Rev. Proc. 2002-19, are inapplicable to

the specific change in accounting method requested.

Line 2 is asking whether the scope limitations do not apply

Part I—Information For Automatic

to the accounting method change being requested. By

Change Request

answering “Yes” on line 2, the applicant is stating that the

Appendix of Rev. Proc. 2002-9 or the procedures in other

Automatic Change Request Scope Limitations

published guidance specifically state that the scope limitations

are not applicable to the requested accounting method change.

An applicant may not be eligible to use the automatic change

However, the applicant must complete all the lines in Part II,

request procedures with respect to an automatic change

Information For All Requests. If any of the scope limitations

provided by Rev. Proc. 2002-9 (either in the Appendix or

apply to the requested accounting method change and apply to

included by reference in other published guidance) if any of the

the applicant, the applicant may not request an automatic

following six scope limitations (section 4.02 of Rev. Proc.

accounting method change. However, the applicant may be

2002-9 as modified by Rev. Proc. 2002-19) apply at the time

eligible to request its change under the advance consent

the copy of the Form 3115 would be filed with the IRS National

request procedures. See Part III — Information For Advance

Office and if any of the scope limitations are applicable to the

Consent Request on page 6 of these instructions to determine

requested automatic accounting method change as described

if these procedures apply to the applicant. The descriptions of

in the applicable section of the Appendix of Rev. Proc. 2002-9

the automatic changes in the List of Automatic Accounting

or other published guidance.

Method Changes indicate whether, with respect to a particular

1. The applicant is under examination, except as provided in

change, scope limitations may not apply. Refer to section 4 of

section 4.02(1) of Rev. Proc. 2002-9.

Rev. Proc. 2002-9, as modified by Rev. Proc. 2002-19, for

2. The applicant is (or was formerly) a member of a

specific requirements regarding scope limitations.

consolidated group that is under examination, or before an

Line 3. If the applicant would be required by section 5.04(3)(c)

Appeals office, or before a Federal court for the tax year(s) the

of Rev. Proc. 2002-9 to take the entire amount of the section

applicant was a member of the group. For more information,

481(a) adjustment into account in computing taxable income for

see section 4.02(4) of Rev. Proc. 2002-9.

the year of change, and if section 4.02(8) of Rev. Proc. 2002-9

3. In the case of a partnership or S corporation, the

applies to the applicant’s accounting method change request,

accounting method the applicant is requesting to change is an

the applicant is not eligible to make the change under automatic

issue under consideration in an examination, or by an Appeals

change request procedures.

office, or before a Federal court with respect to a partner,

member, or shareholder of the applicant. For more information,

Part II—Information For All Requests

see section 4.02(5) of Rev. Proc. 2002-9.

4. The applicant made or applied to make the same change

Note: For lines 4a, 4b, 4c, 5a, 5c, and 6, the reference to

in accounting method within the last 5 tax years, including the

“applicant” includes the applicant and any present or former

year of change. For more information, see section 4.02(6) of

consolidated group in which the applicant was a member during

Rev. Proc. 2002-9.

the applicable tax year(s). A reference to “applicable tax

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Instructions For Form 3115 - Application For Change In Accounting Method - Internal Revenue Service - 2006 Page 4

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