Form 3115: New Procedures for Changing Accounting Methods

Mastering Latest Rules and Guidance

Recording of a 110-minute CPE webinar with Q&A


Conducted on Wednesday, October 12, 2011

Recorded event now available

or call 1-800-926-7926
Program Materials

This teleconference will prepare accounting advisors and taxpayers for the essential concepts, the latest changes, and the potential pitfalls to comply with the new rules when reporting changes in accounting method on Form 3115.

Description

The process for reporting change in accounting methods, for federal tax purposes, is anything but static. IRS Rev. Proc. 2011-14 significantly changed automatic consent, altered procedures for changing methods, and added new special circumstances. Recently amended Sect. 381(c) regulations also come into play.

Even before these IRS actions, Form 3115 posed significant challenges for advisors and taxpayers. For example, when and how often can it be used to change accounting methods? How should questions about advance-change requests, Sect. 481(a) adjustments, changes to the cash method and other issues be answered?

Accounting advisors and corporate taxpayers must understand how to properly report changes in accounting methods on Form 3115, the transition rules and current general procedures, and use of a Sect. 481 "catch-up" adjustment. Anticipating pitfalls is key to avoiding penalties.

Listen as our panel of experienced accounting professionals prepares you to work accurately with Form 3115 on reporting changes in accounting methods.

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Outline

  1. Longstanding guidance on reporting changes in accounting methods
    1. Rev. Proc. 2002-9 appendix
    2. Rev. Proc. 97-27 advance consent procedure
    3. Rev. Proc. 2002-18 on timing of Sect. 481 adjustments
    4. Rev. Proc. 2008-52
    5. Rev. Proc. 2009-39
  2. Key terms of latest guidance changes
    1. Rev. Proc. 2011-14
      1. Revisions in procedures to obtain automatic consent
      2. Seven new methods for which taxpayers can obtain automatic consent
    2. Final Sect. 381(c) regulations
      1. Accounting and inventory methods to be used after corporate reorganizations
  3. Timing issues in reporting a change in accounting methods
    1. What rises to the level of a change in method?
    2. How soon does this change have to be reported?
  4. Procedures for filing Form 3115
    1. Difficult decisions faced in reporting
    2. Timing for filing form
    3. Timing of Sect. 481 catch-up

Benefits

The panel will explore these and other relevant topics:

  • Essential concepts: When Form 3115 is needed. What constitutes a "method of accounting" or "adoption" of a method. Procedures for filing Form 3115 or making a Sect. 481 "catch-up" adjustment.
  • Latest changes: Procedural revisions in Rev. Proc. 2011-14 and Sect. 381(c) regulations.
  • Potential pitfalls: The thorniest compliance issues in completing Form 3115.

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

Ellen McElroy
Ellen McElroy

Partner
Pepper Hamilton

Her practice focuses on a broad variety of federal issues involving accounting methods and inventories, and she chairs...  |  Read More

Karen Messner
Karen Messner
Manager, Federal Tax Services Group
Ernst & Young

In recent years, her work has focused primarily on managing the firm’s accounting method and period-change...  |  Read More

Gregg Hamm
Gregg Hamm
Senior Manager
Boyer & Ritter

He has worked in public accounting since 1992 and manages the firm's Tax Services Group. Among his client work is...  |  Read More

Michael Lueck
Michael Lueck
Director, Washington National Tax (Income Tax & Accounting)
KPMG

He helps clients with accounting method issues, with a primary focus on inventories and Sect. 263A. He has significant...  |  Read More

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