rp-06-12.pdf

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing.

This collection currently includes the publisher’s available advance-release directory. Historical bulletin renditions are discovered separately; an advance-release record alone does not certify the collection archive complete.

Part III

Administrative, Procedural, and Miscellaneous

26 CFR 601.204: Changes in accounting periods and in methods of accounting.
(Also Part 1, §§ 162, 263, 446, 461, 481; 1.167(a)-3(b), 1.263(a)-4, 1.263(a)-5, 1.446-1,
1.481-1)

Rev. Proc. 2006-12
SECTION 1. PURPOSE
This revenue procedure provides the exclusive administrative procedures under
which a taxpayer described in section 3 of this revenue procedure may obtain automatic
consent for a taxable year ending on or after December 31, 2005, and for any earlier
taxable year that is after the taxpayer’s second taxable year ending on or after
December 31, 2003, to change to a method of accounting provided in §§ 1.263(a)-4,
1.263(a)-5, or 1.167(a)-3(b) of the Income Tax Regulations (the “final regulations”).
SECTION 2. BACKGROUND
.01 On January 5, 2004, the Internal Revenue Service and Treasury Department
published final regulations in the Federal Register (TD 9107, 2004-1 C.B. 477 [69 FR
436]). Section 1.263(a)-4 prescribes the extent to which taxpayers must capitalize
amounts paid or incurred to acquire or create (or to facilitate the acquisition or creation
of) intangibles. Section 1.263(a)-5 prescribes the extent to which taxpayers must
capitalize amounts paid or incurred to facilitate an acquisition of a trade or business, a
change in the capital structure of a business entity, and certain other transactions.

2
Section 1.167(a)-3(b) provides a safe harbor useful life for certain intangible assets.
The final regulations under §§ 1.263(a)-4 and 1.263(a)-5 are effective for amounts paid
or incurred on or after December 31, 2003. The final regulations under § 1.167(a)-3(b)
are effective for intangible assets created on or after December 31, 2003.
.02 Sections 1.263(a)-4(p) and 1.263(a)-5(n) provide that a taxpayer seeking to
change to a method of accounting provided in the final regulations must secure the
consent of the Commissioner in accordance with the requirements of § 1.446-1(e). In
addition, §§ 1.263(a)-4(p) and 1.263(a)-5(n) provide that, for the taxpayer’s first taxable
year ending on or after December 31, 2003, the taxpayer is granted the consent of the
Commissioner to change to a method of accounting provided in the final regulations,
provided the taxpayer follows the administrative procedures issued under § 1.446-
1(e)(3)(ii) for obtaining the Commissioner’s automatic consent to a change in
accounting method (for further guidance, for example, see Rev. Proc. 2002-9, 2002-1
C.B. 327, as modified and clarified by Announcement 2002-17, 2002-1 C.B. 561,
modified and amplified by Rev. Proc. 2002-19, 2002-1 C.B. 696, and amplified, clarified,
and modified by Rev. Proc. 2002-54, 2002-2 C.B. 432). The final regulations further
provide that any applicable § 481(a) adjustment for a change to a method of accounting
provided in the final regulations for a taxpayer’s first taxable year ending on or after
December 31, 2003, is determined by taking into account only amounts paid or incurred
in taxable years ending on or after January 24, 2002. The preamble to the final
regulations states that the Service may issue additional guidance for utilizing the
automatic consent procedures to change to a method of accounting provided in the
regulations.

3
.03 Section 1.446-1(e)(3)(ii) authorizes the Commissioner to prescribe
administrative procedures setting forth the limitations, terms, and conditions deemed
necessary to permit a taxpayer to obtain consent to change a method of accounting.
.04 Rev. Proc. 2002-9 provides procedures by which a taxpayer may obtain
automatic consent to change to a method of accounting described in the Appendix of
Rev. Proc. 2002-9.
.05 Rev. Rul. 90-38, 1990-1 C.B. 57, provides that, if a taxpayer uses an
erroneous method of accounting for two or more consecutive taxable years, the
taxpayer has adopted a method of accounting. The ruling further provides that a
taxpayer may not, without the Commissioner’s consent, retroactively change from an
erroneous to a permissible method of accounting by filing an amended return.
.06 Rev. Proc. 2004-23, 2004-1 C.B. 785, and Rev. Proc. 2005-9, 2005-2 I.R.B.
303, as modified by Rev. Proc. 2005-17, 2005-13 I.R.B. 797, provide the exclusive
administrative procedures under which a taxpayer may obtain automatic consent for the
taxpayer’s first and second taxable years, respectively, ending on or after December 31,
2003, to change to a method of accounting provided in the final regulations and, if
desired, to change to a method of utilizing the 3½ month rule authorized by § 1.461-
4(d)(6)(ii) or the recurring item exception authorized by § 1.461-5 in conjunction with a
change to a method of accounting provided in the final regulations. Rev. Proc. 2004-23
and Rev. Proc. 2005-9 provide, as a term and condition of obtaining the
Commissioner’s consent, that any applicable § 481(a) adjustment take into account only
amounts paid or incurred in taxable years ending on or after January 24, 2002.
.07 This revenue procedure constitutes the exclusive guidance for utilizing the

4
automatic consent procedures to change to a method of accounting provided in the final
regulations for taxable years subsequent to those covered by Rev. Proc. 2004-23 and
Rev. Proc. 2005-9 -- specifically, a taxable year ending on or after December 31, 2005,
and any earlier taxable year that is after the taxpayer’s second taxable year ending on
or after December 31, 2003. As in Rev. Proc. 2004-23 and Rev. Proc. 2005-9, a term
and condition of obtaining the Commissioner’s consent is that any applicable § 481(a)
adjustment take into account only amounts paid or incurred in taxable years ending on
or after January 24, 2002. For any change in method of accounting to which this
revenue procedure applies, a taxpayer may not file an application for a change in
method of accounting under Rev. Proc. 97-27, 1997-1 C.B. 680, as modified and
amplified by Rev. Proc. 2002-19, 2002-1 C.B. 696, as amplified and clarified by Rev.
Proc. 2002-54, 2002-2 C.B. 432. See section 4.02(1) of Rev. Proc. 97-27.
SECTION 3. SCOPE
This revenue procedure applies to a taxpayer that seeks, for a taxable year
ending on or after December 31, 2005, and for any earlier taxable year that is after the
taxpayer’s second taxable year ending on or after December 31, 2003, to change to a
method of accounting provided in the final regulations.
SECTION 4. APPLICATION
.01 In general. A taxpayer within the scope of this revenue procedure and Rev.
Proc. 2002-9, as modified by this revenue procedure, is, in accordance with section
6.01 of Rev. Proc. 2002-9, granted the consent of the Commissioner to change to a
method of accounting provided in the final regulations provided the taxpayer follows the
automatic change in method of accounting provisions in Rev. Proc. 2002-9, with the

5
following modifications:
(1) The taxpayer must prepare and file Form 3115, Application for Change
in Accounting Method, in accordance with section 4.02 of this revenue procedure;
(2) The taxpayer must compute any applicable § 481(a) adjustment and
take such adjustment into account in accordance with section 5 of this revenue
procedure; and
(3) A taxpayer described in section 4.03(2) of this revenue procedure must
file one or more amended federal income tax returns (amended returns) in accordance
with section 4.03(3), (4), or (5), as applicable, and section 4.03(6), if applicable, of this
revenue procedure.
.02 Form 3115. In preparing the Form 3115 referred to in section 4.01 of this
revenue procedure, a taxpayer must comply with the following procedures:
(1) The taxpayer may use one Form 3115 for all changes in method of
accounting made pursuant to the final regulations;
(2) The taxpayer is required to complete only the following information on
Form 3115:
(a) The identification section of Page 1 (above Part I);
(b) The signature section at the bottom of Page 1;
(c) Part I, Line 1(a). The designated automatic accounting method
change number for changes in method of accounting made pursuant to this revenue
procedure is No. “78”;
(d) Part II, all lines except lines 11, 13, 14, 15, and 17 (for purposes
of completing line 12, see section 5.02(2) of this revenue procedure if the taxpayer is

6
making more than one change in method of accounting);
(e) Part IV, in accordance with section 5 of this revenue procedure;
and
(f) Schedule E, if applicable;
(3) In addition to the other information required on line 12 of Form 3115,
the taxpayer must include the citation to the paragraph of the final regulations that
provides for the proposed method of accounting for each item (e.g., § 1.263(a)-4(d)(6)
or § 1.263(a)-4(f));
(4) In addition to the other information required on Schedule E of Form
3115 (if applicable), the taxpayer must include a statement as to whether the useful life
is the safe harbor useful life prescribed by § 1.167(a)-3(b)(1) or § 1.167(a)-3(b)(1)(iv)
and, if the useful life is the safe harbor useful life prescribed by § 1.167(a)-3(b)(1), a
statement explaining why the intangible asset does not have a useful life the length of
which can be estimated with reasonable accuracy; and
(5) A taxpayer that must file one or more amended returns as provided in
section 4.03 of this revenue procedure to be eligible to use the automatic consent
procedures of this revenue procedure must attach to the Form 3115 a written statement
signed under penalties of perjury confirming that the taxpayer has filed the amended
returns pursuant to section 4.03 of this revenue procedure.
.03 Unauthorized change in a preceding year.
(1) A taxpayer may change a method of accounting only with the consent
of the Commissioner. § 1.446-1(e)(2). A taxpayer that changes a method of accounting
without the consent of the Commissioner has made an unauthorized change in method

7
of accounting. If a taxpayer makes an unauthorized change in method of accounting,
the Service may adjust the taxpayer’s taxable income during the examination of the
taxpayer’s income tax return for the taxable year the unauthorized change was made
and for all affected subsequent taxable years. In the notice of proposed rulemaking that
preceded the publication of the final regulations (REG-125638-01, 2003-1 C.B. 373 [67
FR 77701]), the Service and Treasury Department advised taxpayers not to seek to
change a method of accounting in reliance on rules contained in the notice of proposed
rulemaking until the rules were published as final regulations. The Service and
Treasury Department are aware that some taxpayers have made an unauthorized
change in method of accounting for an item the treatment of which is provided for in the
final regulations. The Service and Treasury Department have determined that it is not
appropriate for taxpayers that have made an unauthorized change in method of
accounting for an item the treatment of which is provided for in the final regulations to
obtain automatic consent under this revenue procedure without correcting such
unauthorized change. Therefore, a taxpayer that made an unauthorized change in
method of accounting for an item the treatment of which is provided for in the final
regulations is eligible to use the automatic consent procedures provided in this revenue
procedure only if the taxpayer amends prior federal income tax returns to correct the
unauthorized change in method of accounting. However, as a matter of administrative
grace, the Service and Treasury Department have limited the application of this section
4.03 to certain taxpayers described in section 4.03(2) of this revenue procedure.
(2) This section 4.03 applies to a taxpayer that –
(a) in a taxable year for which the due date of the federal income

8
tax return (including extensions, regardless of whether such extension is
automatic and whether or not actually requested) is after January 24, 2002 --
(i) made any unauthorized change in method of accounting
for an item the treatment of which is provided for in the final regulations; or
(ii) impermissibly changed the treatment of an item that is
provided for in the final regulations for the taxable year preceding the
taxable year for which the taxpayer is requesting to change to a method of
accounting provided in the final regulations under this revenue procedure
and used such treatment on only one federal income tax return; or
(b) made an unauthorized change in method of accounting to a
method of accounting that is provided in the final regulations in a taxable year for
which the due date of the federal income tax return (including extensions,
regardless of whether such extension is automatic and whether or not actually
requested) is on or before January 24, 2002, if the taxpayer wishes to use the
automatic consent procedures to obtain the Commissioner’s consent to change
to the same method of accounting to which the taxpayer previously made the
unauthorized change.
(3) A taxpayer described in section 4.03(2)(a)(i) of this revenue procedure
is eligible to use the automatic consent procedures to obtain the Commissioner’s
consent to change to a method of accounting provided in the final regulations only if the
taxpayer changes back to its prior method of accounting (i.e., the method of accounting
used for an item prior to making the unauthorized change for the item) for each item
referred to in section 4.03(2)(a)(i) of this revenue procedure by amending its federal

9
income tax returns for all of the preceding taxable years in which the unauthorized
method (or methods) was used. See section 4.03(6) of this revenue procedure if the
period of limitations has expired for the taxable year in which the taxpayer made the
unauthorized change in method of accounting or for any subsequent taxable year.
(4) A taxpayer described in section 4.03(2)(a)(ii) of this revenue procedure
is eligible to use the automatic consent procedures to obtain the Commissioner’s
consent to change to a method of accounting provided in the final regulations only if the
taxpayer amends its federal income tax return for the preceding taxable year in which
the unauthorized treatment was used to change the treatment of each item referred to in
section 4.03(2)(a)(ii) of this revenue procedure to a treatment consistent with the
taxpayer’s historic method of accounting (i.e., the method of accounting used for an
item prior to changing the treatment of the item).
(5) A taxpayer described in section 4.03(2)(b) of this revenue procedure is
eligible to use the automatic consent procedures to obtain the Commissioner’s consent
to change to the same method of accounting provided in the final regulations to which
the taxpayer previously made the unauthorized change only if the taxpayer changes
back to its prior method of accounting for the item (i.e., the method of accounting used
for the item prior to making the unauthorized change for the item) by amending its
federal income tax returns for all of the preceding taxable years in which the
unauthorized method was used. See section 4.03(6) of this revenue procedure if the
period of limitations has expired for the taxable year in which the taxpayer made the
unauthorized change in method of accounting or for any subsequent taxable year.
(6) For purposes of section 4.03(3) or (5) of this revenue procedure, if the

10
period of limitations has expired for the taxable year in which a taxpayer made the
unauthorized change in method of accounting or for any subsequent taxable year, the
taxpayer is eligible to use the automatic consent procedures to change to a method of
accounting provided in the final regulations only if the taxpayer changes back to the
prior method of accounting for the earliest taxable year for which the statute of limitation
has not expired and that does not precede a taxable year for which the statute of
limitations has expired (retroactive year of change) by amending its federal income tax
returns for the retroactive year of change and all subsequent taxable years in which the
unauthorized method (or methods) was used. The taxpayer must take the entire
amount of the § 481(a) adjustment attributable to the change back to the prior method
of accounting into account in the retroactive year of change. The taxpayer must identify
that § 481(a) adjustment on its federal income tax return for the retroactive year of
change as resulting from a retroactive change in method of accounting under section
4.03(6) of Rev. Proc. 2006-12.
Example. X, a calendar year taxpayer, made an unauthorized change to a
method of accounting provided in the final regulations in 2001. X continued to use its
new method in all subsequent taxable years. In February 2009, X decides to properly
change to that method under this revenue procedure for 2008. At that time, the statute
of limitations has expired for X’s 2001, 2002, and 2004 federal income tax returns.
However, the statute of limitations on X’s 2003 tax federal income tax return has not
expired. Because 2005 is the earliest taxable year that does not precede a taxable year
for which the statute of limitations has expired, pursuant to section 4.03(6) of this
revenue procedure, 2005 is the retroactive year of change. X must file amended federal

11
income tax returns for taxable years 2005, 2006 and 2007 to change back to the
method of accounting X used before its unauthorized change in method of accounting in
2001. Further, X must take the entire amount of the section 481(a) adjustment
attributable to the change in method of accounting back to X’s prior method into account
in 2005.
(7) A taxpayer filing one or more amended returns pursuant to section
4.03 of this revenue procedure must file the amended returns on or before the date the
taxpayer files a Form 3115 under this revenue procedure (including the copy of Form
3115 filed with the national office). For this purpose, a taxpayer under examination will
be considered to have filed an amended return by providing the amended return to the
examining agent.
(8) In accordance with § 1.446-1(e)(3)(ii) and Rev. Rul. 90-38, consent is
hereby granted for a taxpayer changing to a method of accounting provided in the final
regulations under this revenue procedure that is described in section 4.03(2)(a)(i) or (b)
of this revenue procedure to file the amended returns referred to in section 4.03(3) or
(5), and section 4.03(6) of this revenue procedure, as applicable, to retroactively change
its method of accounting. This consent is granted for the taxable year for which the
taxpayer made the unauthorized change or, if applicable, the retroactive year of change
pursuant to section 4.03(6) of this revenue procedure, and for all subsequent taxable
years affected by the unauthorized change.
.04 Prior change. For purposes of this revenue procedure, the 5-year prior
change scope limitation contained in section 4.02(6) of Rev. Proc. 2002-9 is modified.
In applying the 5-year prior change scope limitation contained in section 4.02(6) of Rev.

12
Proc. 2002-9, the taxpayer does not take into account a change in method of
accounting provided in the final regulations requested or made for a taxable year ending
on or before December 31, 2005. For example, a taxpayer that applied for a change in
method of accounting provided in the final regulations for its taxable year ended
December 31, 2002, and withdrew its request or had its request denied is not prohibited
under section 4.02(6) of Rev. Proc. 2002-9 from obtaining automatic consent to change
to a method of accounting provided in the final regulations under this revenue procedure
for its taxable year ended December 31, 2005.
SECTION 5. COMPUTATION OF SECTION 481(a) ADJUSTMENT
.01 In general. A taxpayer changing to a method of accounting provided in the
final regulations under this revenue procedure is required to take into account any
applicable § 481(a) adjustment as provided in §§ 1.263(a)-4(p)(3) and 1.263(a)-5(n)(3).
The § 481(a) adjustment is computed as of the first day of the taxpayer’s taxable year of
change and, as provided in the final regulations, takes into account only amounts paid
or incurred in taxable years ending on or after January 24, 2002. Thus, the § 481(a)
adjustment is computed by taking into account only amounts paid or incurred in the
period beginning with the first day of the taxable year that includes January 24, 2002,
and ending with the last day of the last taxable year prior to the year of change. The
amount of the § 481(a) adjustment must include (i) as a reduction of taxable income,
any amounts paid or incurred in the period beginning with the first day of the taxable
year that includes January 24, 2002, and ending with the last day of the taxable year
prior to the taxable year of change, that were capitalized under the taxpayer’s present
method of accounting and are currently deductible under the taxpayer’s proposed

13
method of accounting, reduced by the amount of such capitalized costs recovered
through amortization or depreciation under the taxpayer’s present method of
accounting, (ii) as an increase to taxable income, any amounts paid or incurred in the
period beginning with the first day of the taxable year that includes January 24, 2002,
and ending with the last day of the taxable year prior to the taxable year of change, that
were currently deducted under the taxpayer’s present method of accounting and are
capitalized under the taxpayer’s proposed method of accounting, reduced by the
amount of capitalized costs that would have been recovered through amortization or
depreciation if the taxpayer’s proposed method of accounting had been applied in
taxable years ending on or after January 24, 2002, and (iii) as an increase or a
reduction to taxable income, as appropriate, any other adjustments required as a result
of the change in method of accounting. If under its present method of accounting a
taxpayer capitalized costs incurred prior to the first taxable year that includes January
24, 2002, the taxpayer must continue to treat amortization or depreciation deductions
attributable to those costs in accordance with the taxpayer’s present method of
accounting. Thus, for example, a taxpayer that files its federal income tax return on a
calendar year basis continues to amortize or depreciate in 2005 an intangible created in
2001, even though the taxpayer has changed to a method of accounting provided in the
final regulations under which the entire cost of the intangible would be currently
deductible if incurred in 2005. For taxpayers who correct an unauthorized change in a
preceding year under section 4.03 of this revenue procedure, the taxpayer’s present
method of accounting is the method used by the taxpayer prior to making the
unauthorized change.

14
.02 Reporting the section 481(a) adjustment on Form 3115.
(1) Netting. For purposes of determining the adjustment period under
section 2.05(2) of Rev. Proc. 2002-9, the § 481(a) adjustment is determined separately
for each change in method of accounting being made under this revenue procedure.
Thus, a positive adjustment attributable to a change in one method may not be netted
against a negative adjustment attributable to a change in another method. However, in
determining the adjustment attributable to a change in method, a taxpayer must net
positive § 481(a) adjustments and negative § 481(a) adjustments resulting from that
change in method (e.g., if a taxpayer changes to a method of applying the 12-month
rule to prepaid amounts, the taxpayer must net the resulting negative § 481(a)
adjustment with the positive § 481(a) adjustment that results from including those
amounts in inventory pursuant to the taxpayer’s existing § 263A method of accounting
for inventory).
(2) Itemized listing on Form 3115. The taxpayer must include on Form
3115, Part IV, line 25, the total § 481(a) adjustment for all changes in methods of
accounting being made. If the taxpayer is making more than one change in method of
accounting under the final regulations, the taxpayer must include on an attachment to
Form 3115 –
(a) the information required by Part IV, line 25 for each change in method
of accounting (including the amount of the § 481(a) adjustment for each change
in method of accounting);
(b) the information required by Part II, line 12 of Form 3115 that is
associated with each change; and

15
(c) the citation to the paragraph of the final regulations that provides for
each proposed method of accounting (e.g., § 1.263(a)-4(d)(6) or § 1.263(a)-4(f)).
.03 Example: Y, a calendar year taxpayer that uses an accrual method of
accounting, is a service provider not required to maintain inventories. Y wishes to
change to a method of accounting provided in the final regulations for taxable year
2005. Y incurred and capitalized $100x in taxable year 2001, $200x in taxable year
2002, $250x in taxable year 2003, and $300x in taxable year 2004. In addition, Y
incurred $330x in taxable year 2005. The $100x, $200x, $250x, and $300x capitalized
and depreciated by Y in 2001, 2002, 2003, and 2004 all relate to the same method of
accounting and would be currently deductible under the final regulations if the amounts
had been incurred on or after December 31, 2003. Y claimed a depreciation deduction
of $10x in each of the taxable years 2001, 2002, 2003, and 2004 with respect to the
$100x incurred and capitalized in 2001, a depreciation deduction of $20x in each of the
taxable years 2002, 2003, and 2004 with respect to the $200x incurred and capitalized
in 2002, a depreciation deduction of $25x in each of the taxable years 2003 and 2004
with respect to the $250x incurred and capitalized in 2003, and a depreciation deduction
of $30x in taxable year 2004 with respect to the $300x incurred and capitalized in 2004.
For taxable year 2005, Y may apply for an automatic change in method of accounting
with respect to the method under which the amounts had been capitalized. Y’s section
481(a) adjustment is a decrease in income of $610x ($140x relating to amounts
capitalized in 2002 ($200x - $60 ($20 for each of 2002, 2003, and 2004)) + $200x
relating to amounts capitalized in 2003 ($250x - $50x ($25 for each of 2003 and 2004))
+ 270x relating to amounts capitalized in 2004 ($300x - $30x)). Y must continue to use

16
its present method of accounting for the amount capitalized in 2001. Y uses its new
method of accounting for the amount incurred in 2005.
SECTION 6. HOW THIS REVENUE PROCEDURE DIFFERS FROM REV. PROC.
2005-9
.01 Rev. Proc. 2005-9 applies to a taxpayer’s second taxable year ending on or
after December 31, 2003. This revenue procedure applies to a taxable year ending on
or after December 31, 2005, and any earlier taxable year that is after the taxpayer’s
second taxable year ending on or after December 31, 2003.
.02 Rev. Proc. 2005-9 grants taxpayers the Commissioner’s consent to change
to a method of accounting utilizing the 3½ month rule authorized by § 1.461-4(d)(6)(ii) or
to utilize the recurring item exception authorized by § 1.461-5 for the item for which the
taxpayer is simultaneously changing to a method of accounting provided in the final
regulations. This revenue procedure provides consent only for a change to a method of
accounting provided in the final regulations. This revenue procedure does not provide
consent for a change in method utilizing the 3½ month rule or the recurring item
exception in conjunction with a change to a method provided by the final regulations.
Thus, for a change in method of accounting utilizing the 3½ month rule or the recurring
item exception in conjunction with a change to a method provided by the final
regulations, a taxpayer must file two separate applications for a change in method of
accounting – an application for a change in method of accounting under this revenue
procedure to change to the method of accounting provided in the final regulations, and a
separate application for a change in method of accounting under Rev. Proc. 97-27 for a
change in method of accounting utilizing the 3½ month rule or the recurring item

17
exception.
.03 Rev. Proc. 2005-9, as modified by Rev. Proc. 2005-17, waives the 5-year
prior change scope limitation contained in section 4.02(6) of Rev. Proc. 2002-9. This
revenue procedure modifies the waiver of the 5-year prior change scope limitation to
restrict such waiver to prior requests for, or changes in, methods of accounting provided
in the final regulations for a taxable year ending on or before December 31, 2005. See
section 4.04 of this revenue procedure.
.04 Unlike Rev. Proc. 2005-9, this revenue procedure provides procedures to
change back to the taxpayer’s method of accounting used for an item prior to making an
unauthorized change when the period of limitations has expired for one or more affected
taxable years. See section 4.03(6) of this revenue procedure.
.05. This revenue procedure eliminates the requirement to submit the copy of
Form 3115 to a special address. Taxpayers must submit the copy of Form 3115 to the
address for taxpayers filing under automatic change request procedures. See the
current Instructions for Form 3115 for the address.
SECTION 7. EFFECT ON OTHER DOCUMENTS
.01 Rev. Proc. 2002-9 is modified and amplified to include these automatic
changes in method of accounting to methods provided in the final regulations in section
3 of the APPENDIX.
.02 Rev. Proc. 2004-23 and Rev. Proc. 2005-9 are superseded for taxable years
ending on or after December 31, 2005, and for any earlier taxable year that is after the
taxpayer’s second taxable year ending on or after December 31, 2003.
.03 Rev. Proc. 97-27 is modified and amplified to state that, for changes to

18
methods of accounting provided in the final regulations, any applicable § 481(a)
adjustment takes into account only amounts paid or incurred in taxable years ending on
or after January 24, 2002.
SECTION 8. EFFECTIVE DATE
This revenue procedure is effective for a taxable year ending on or after
December 31, 2005, and for any earlier taxable year that is after the taxpayer’s second
taxable year ending on or after December 31, 2003.
SECTION 9. DRAFTING INFORMATION
The principal author of this revenue procedure is Grace Matuszeski of the
Associate Chief Counsel (Income Tax and Accounting). For further information
regarding this revenue procedure call Ms. Matuszeski at (202) 622-7900 (not a toll free
call).