Proposed Modifications to Accounting Method Change Procedures by AICPA

The American Institute of Certified Public Accountants (AICPA) has proposed modifications to the accounting method change procedures outlined in Revenue Procedure 2015-13. These changes aim to encourage voluntary compliance while streamlining the framework for taxpayers. In a letter to the U.S. Department of the Treasury and the Internal Revenue Service (IRS), the AICPA recommended transitioning to an "issue under consideration" standard to allow accounting method changes during examinations.

The organization suggests removing section 3.08(4) of Rev. Proc. 2015-13 to adopt a uniform definition for all taxpayers, including controlled foreign corporations (CFCs). The AICPA also advocates discarding section 8.02(1)(a)(iii) to extend the three-month window exception to CFCs, matching the filing windows of domestic corporations and restoring the 120-day window for accounting method changes after an examination concludes.

Additionally, the AICPA calls for eliminating the 150% test, which restricts audit protections for CFCs. They recommend automatic section 9100 relief for scenarios where the Ogden, UT copy of Form 3115 is submitted within three months of the return's due date, if the change was made on a timely filed return with the original Form 3115. Furthermore, they propose allowing taxpayers to accelerate positive section 481(a) adjustments from previous accounting method changes during eligible acquisitions. Reema Patel, AICPA Tax Policy & Advocacy senior manager, highlighted that replacing existing rules with simpler standards would ease compliance, facilitating method changes post a 12-month examination period unless directly addressed by IRS divisions or federal courts. The AICPA also seeks clarity on regulations affecting Trump Accounts.