Internal Revenue Bulletin 2021-35 (PDF rendition): IRS Revenue Rulings

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Bulletin No. 2021–35
August 30, 2021
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
ADMINISTRATIVE
Rev. Proc. 2021-36, page 357.
This revenue procedure provides the applicable percentage
table in § 36B(b)(3)(A) of the Internal Revenue Code for tax-
able years beginning in calendar year 2022. This table is
used to calculate an individual’s premium tax credit under §
36B. This revenue procedure also provides the indexing ad-
justment for the required contribution percentage in § 36B(c)
(2)(C)(i)(II) for plan years beginning in calendar year 2022.
This percentage is used to determine whether an individual is
eligible for affordable employer-sponsored minimum essen-
tial coverage.
EMPLOYEE PLANS
Notice 2021-50, page 333.
This notice sets forth updates on the corporate bond month-
ly yield curve, the corresponding spot segment rates for Au-
gust 2021 used under § 417(e)(3)(D), the 24-month average
segment rates applicable for August 2021, and the 30-year
Treasury rates, as reflected by the application of § 430(h)(2)
(C)(iv).
ESTATE TAX
Rev. Rul. 2021-15, page 331.
Special Use Value: Farms: Interest Rates. The 2021 interest
rates to be used in computing the special use value of farm
real property for which an election is made under section
2032A of the Code are listed for estate of decedents.
INCOME TAX
Notice 2021-43, page 332.
The notice provides transition relief related to the work op-
portunity credit by giving employers additional time to submit
a certification request to a Designated Local Agency for the
targeted groups described in section 51(d)(5) and (7) of the
Internal Revenue Code.
Rev. Proc. 2021-34, page 337.
Rev. Proc. 2021-34 modifies Rev. Proc. 2019-43, 2019-48
I.R.B. 1107, to provide procedures under § 446 of the Inter-
nal Revenue Code (Code) and § 1.446-1(e) of the Income Tax
Regulations to obtain automatic consent of the Commission-
er of Internal Revenue (Commissioner) to change methods of
accounting to comply with final regulations under §§ 1.451-
3, 1.451-8, and 1.1275-2(l) and to change methods of ac-
counting for certain inventory costs to comply with §§ 263A,
461, and 471 if such changes are made in connection with
a change to comply with § 1.451-3 and/or § 1.451-8, as
applicable. This revenue procedure also modifies Rev. Proc.
2015-13, 2015-5 I.R.B. 419, as clarified and modified by
Rev. Proc. 2015-33, 2015-24 I.R.B. 1067, and further modi-
fied by Rev. Proc. 2016-1, 2016-1 I.R.B. 1, Rev. Proc. 2017-
59, 2017-48 I.R.B. 543, and Rev. Proc. 2021-26, 2021-22
I.R.B. 1163, to provide procedures for a taxpayer to obtain
the consent of the Commissioner to change its method of
accounting to comply with §§ 1.451-3 and/or 1.451-8, as
applicable, by providing rules related to cost offset method
changes.
Rev. Proc. 2021-35, page 355.
Rev. Proc. 2021-35 modifies Rev. Proc. 2013-26, 2013-22
I.R.B. 1160, to reflect changes made to the treatment of cer-
tain credit card fees by section 451(b) and sections 1.451-3
and 1.1275-2(l). Rev. Proc. 2013-26 describes the propor-
tional method of accounting for original issue discount on a
pool of credit card receivables.
Finding Lists begin on page ii.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and en-
force the law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing of-
ficial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of inter-
nal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rul-
ings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
August 30, 2021 Bulletin No. 2021–35

Part I
Section 2032A.—Valuation
of Certain Farm, Etc.,
Real Property
26 CFR 20.2032A-4: Method of valuing farm real
property.
Rev. Rul. 2021-15
This revenue ruling contains a list of
the average annual effective interest rates
on new loans under the Farm Credit Sys-
tem. This revenue ruling also contains a
list of the states within each Farm Credit
System Bank Territory.
Under § 2032A(e)(7)(A)(ii) of the In-
ternal Revenue Code, rates on new Farm
Credit System Bank loans are used in
computing the special use value of real
property used as a farm for which an elec-
tion is made under § 2032A. The rates
in Table 1 of this revenue ruling may be
used by estates that value farmland under
§ 2032A as of a date in 2021.
Average annual effective interest
rates, calculated in accordance with
§ 2032A(e)(7)(A) and § 20.2032A-4(e)
of the Estate Tax Regulations, to be used
under § 2032A(e)(7)(A)(ii), are set forth
in the accompanying Table of Interest
Rates (Table 1). The states within each
Farm Credit System Bank Territory are
set forth in the accompanying Table of
Farm Credit System Bank Territories
(Table 2).
Rev. Rul. 81-170, 1981-1 C.B. 454,
contains an illustrative computation of
an average annual effective interest rate.
The rates applicable for valuation in 2020
are in Rev. Rul. 2020-17, 2020-37 I.R.B.
552. For rate information for years prior
to 2020, see Rev. Rul. 2019-18, 2019-35
I.R.B. 668, and other revenue rulings that
are referenced therein.
DRAFTING INFORMATION
The principal author of this revenue ruling
is Lane Damazo of the Office of the Associ-
ate Chief Counsel (Passthroughs and Special
Industries). For further information regarding
this revenue ruling, contact Lane Damazo at
(202) 317-4628 (not a toll-free number).
REV. RUL. 2021-15 TABLE 1
TABLE OF INTEREST RATES
(Year of Valuation 2021)
Farm Credit System Bank Servicing State in Which Property is LocatedRate
AgFirst, FCB .........................5.25
AgriBank, FCB .........................4.62
CoBank, ACB ..........................4.49
Texas, FCB ...........................5.02
REV. RUL. 2021-15 TABLE 2
TABLES OF FARM CREDIT SYSTEM BANK TERRITORIES
Farm Credit System Bank Location of Property
AgFirst, FCB................ Delaware, District of Columbia, Florida, Georgia, Maryland,
North Carolina, Pennsylvania, South Carolina, Virginia,
West Virginia.
AgriBank, FCB............... Arkansas, Illinois, Indiana, Iowa, Kentucky, Michigan,
Minnesota, Missouri, Nebraska, North Dakota, Ohio, South
Dakota, Tennessee, Wisconsin, Wyoming.
CoBank, ACB................Alaska, Arizona, California, Colorado, Connecticut,
Hawaii, Idaho, Kansas, Maine, Massachusetts, Montana,
New Hampshire, New Jersey, New Mexico, New York,
Nevada, Oklahoma, Oregon, Rhode Island, Utah, Vermont,
Washington.
Texas, FCB................Alabama, Louisiana, Mississippi, Texas.
Bulletin No. 2021–35 331 August 30, 2021

Part III
Work Opportunity Tax
Credit (WOTC) Transition
Relief under Internal
Revenue Code § 51
Notice 2021-43
I. PURPOSE
This notice provides transition relief
for certain employers claiming the Work
Opportunity Tax Credit (WOTC) under
§ 51 of the Internal Revenue Code (Code)
for certain employees beginning work af-
ter December 31, 2020, in response to leg-
islation permitting the designation of an
Empowerment Zone, defined in § 1393(b)
of the Code, to be extended from Decem-
ber 31, 2020, through December 31, 2025.
Specifically, section IV of this notice pro-
vides transition relief by extending the
28-day deadline for employers to request
certification from a designated local agen-
cy (DLA)
1
that an individual who begins
work on or after January 1, 2021, and be-
fore October 9, 2021, is a member of the
Designated Community Resident targeted
group or the Qualified Summer Youth Em-
ployee targeted group.
2
II. BACKGROUND
Section 51(a) of the Code provides the
WOTC to employers based on a percent-
age of qualified wages paid during the tax-
able year. Section 51(b) defines “qualified
wages” as wages paid or incurred by an
employer during the taxable year to an
individual who is certified as a member
of a targeted group. Section 51(d)(1) lists
the targeted groups, which include Desig-
nated Community Residents, defined in
§ 51(d)(5), and Qualified Summer Youth
Employees, defined in § 51(d)(7).
Pursuant to § 51(d)(13)(A), an indi-
vidual is not treated as a member of a
targeted group unless (1) on or before
the day the individual begins work, the
employer obtains certification from the
DLA that the individual is a member of
a targeted group, or (2) the employer
completes a pre-screening notice on or
before the day the individual is offered
employment and submits such notice
to the DLA to request certification that
the individual is a member of a target-
ed group not later than 28 days after the
individual begins work. The Form 8850,
Pre-Screening Notice and Certification
Request for the Work Opportunity Credit,
is the pre-screening notice that must be
submitted by the employer to the DLA to
request certification that an individual is
a member of a targeted group.
To be certified as a Designated Com-
munity Resident or a Qualified Summer
Youth Employee, an individual must be
certified by the DLA as having a principal
place of residence within an Empower-
ment Zone where the individual contin-
uously resides. For such individuals, any
wages paid to or incurred on behalf of the
individual for services rendered while the
individual is not living at a residence with-
in an Empowerment Zone do not qualify
for the WOTC.
III. TAXPAYER CERTAINTY AND
DISASTER TAX RELIEF ACT OF
2020 AMENDMENTS
The WOTC has been subject to sev-
eral legislative extensions and modifi-
cations since its enactment by § 1201
of the Small Business Job Protection
Act of 1996, Pub. L. 104-188, 110 Stat.
1755 (August 20, 1996). Most recent-
ly, § 113 of the Taxpayer Certainty and
Disaster Tax Relief Act of 2020 (Act),
enacted as Division EE of the Consoli-
dated Appropriations Act, 2021, Pub. L.
116-260, 134 Stat. 1182 (December 27,
2020), amended § 51(c)(4) of the Code
to extend the effective date of WOTC.
As amended by the Act, § 51(c)(4) pro-
vides that WOTC applies to wages paid
or incurred with respect to members of
a targeted group who begin work after
December 31, 2020, and before January
1, 2026. In addition, § 118(a) of the Act
amended § 1391(d)(1) of the Code to
provide that any designation of an Em-
powerment Zone ends on the earliest of
(1) December 31, 2025, (2) the termina-
tion date designated by the State and lo-
cal governments as provided for in their
nomination, or (3) the date the “Appro-
priate Secretary”
3
revokes the designa-
tion. Section 118(d) of the Act provides
that where a nomination of an Empow-
erment Zone included a termination
date of December 31, 2020, § 1391(d)
(1)(B) of the Code will not apply with
respect to such designation if, after the
date of the enactment of the Act, the en-
tity that made such nomination amends
the nomination, in such manner as the
Secretary of the Treasury or her desig-
nee may provide, to provide for a new
termination date. The amendment made
by § 118(a) of the Act applies to tax-
able years beginning after December
31, 2020.
On March 26, 2021, the Department
of the Treasury (Treasury Department)
and the Internal Revenue Service (IRS)
released Revenue Procedure 2021-18,
2021-15 I.R.B. 1007 (April 12, 2021), to
explain how a State or local government
is deemed to extend the termination date
designated in an Empowerment Zone
nomination until December 31, 2025.
Revenue Procedure 2021-18 provides that
if a State or local government did not sub-
mit a written declination to extend an Em-
powerment Zone to the IRS by May 25,
2021, and if the Appropriate Secretary did
not revoke the Empowerment Zone desig-
nation, then the termination date provided
in that Empowerment Zone nomination is
automatically extended to December 31,
2025.
1
Section 51(d)(12) provides that a “DLA” is a State employment security agency (sometimes referred to as a State Workforce Agency) established in accordance with 29 U.S.C. §§ 49-49n.
2
For purposes of this notice, the terms “Designated Community Resident” and “Qualified Summer Youth Employee” refer to those individuals certified by a DLA as having a principal place
of residence within an Empowerment Zone.
3
Section 1393(a)(1) of the Code provides that the “Appropriate Secretary” is the Secretary of Housing and Urban Development (in the case of any nominated area designated under § 1391
that is located in an urban area as defined in § 1393(a)(3)), or the Secretary of Agriculture (in the case of any nominated area designated under § 1391 that is located in a rural area as defined
in § 1393(a)(2)).
August 30, 2021 332 Bulletin No. 2021–35

Bulletin No. 2021–35 333 August 30, 2021
IV. GRANT OF RELIEF
As explained below, because the Act
extended the WOTC and the period for
which Empowerment Zone designations
are in effect through December 31, 2025,
employers may need additional time to
comply with the certification requirements
of § 51(d)(13)(A)(ii).
The Treasury Department and the IRS
understand that, because the termination
dates designated in Empowerment Zone
nominations are not automatically ex-
tended until after the deadline set forth
in Revenue Procedure 2021-18 for sub-
mitting a written declination has passed,
employers that hired an individual who is
a Designated Community Resident or a
Qualified Summer Youth Employee and
who began work for that employer on
or after January 1, 2021, may not have
submitted Form 8850 to the DLA with-
in 28 days of the individual beginning
work. To be eligible for the relief provid-
ed by this notice, an employer that did
not submit Form 8850 to the DLA within
28 days of an individual beginning work
must submit the completed Form 8850 to
the DLA by the date set forth in section
IV.A of this notice.
In addition, the Treasury Department
and the IRS are aware that some employ-
ers that hired individuals who are Des-
ignated Community Residents or Qual-
ified Summer Youth Employees may
have submitted Form 8850 to the DLA
within 28 days of the individual begin-
ning work, regardless of the expiration
of the Empowerment Zone designations.
To be eligible for the relief provided by
this notice, an employer that submitted
Form 8850 to the DLA and subsequent-
ly received a denial letter from the DLA
due to the expiration of the Empower-
ment Zone designations must re-submit
the completed Form 8850 by the date set
forth in section IV.A of this notice. If an
employer submitted Form 8850 to the
DLA and was not issued a denial letter
by the DLA, the employer does not need
to re-submit Form 8850 to be eligible for
the relief provided in this notice.
For these reasons, the Treasury Depart-
ment and the IRS are providing employers
with additional time to submit Form 8850
to the DLAs in accordance with the fol-
lowing timeframe.
A. Additional time for employers
hiring individuals who are Designated
Community Residents or Qualified
Summer Youth Employees who begin
work on or after January 1, 2021, and
before October 9, 2021, to submit a
completed Form 8850 to the DLA no
later than November 8, 2021.
An employer that hires or hired an in-
dividual who is a Designated Community
Resident or a Qualified Summer Youth
Employee and who begins or began work
for that employer on or after January 1,
2021, and before October 9, 2021, will be
considered to have satisfied the require-
ments of § 51(d)(13)(A)(ii), whether or
not the employer submitted the completed
Form 8850 to the DLA within 28 days of
the individual beginning work for the em-
ployer, if the employer submits the com-
pleted Form 8850 to the DLA to request
certification no later than November 8,
2021. If an employer hired an individual
who is a Designated Community Resident
or a Qualified Summer Youth Employee
who began work on or after January 1,
2021, and before May 26, 2021, and the
employer submitted Form 8850 to the
DLA but either was not issued a denial
notification by the DLA or was issued a
certification, then the employer does not
need to re-submit Form 8850 to request
certification from the DLA.
B. Application of 28-day requirement
to individuals who begin work on or
after October 9, 2021.
An employer that hires an individual
who is a Designated Community Resident
or a Qualified Summer Youth Employee
and who begins work for the employer on
or after October 9, 2021, is not eligible for
the transition relief described in this no-
tice with respect to that new employee.
V. EFFECTIVE DATE
The effective date of this notice is Au-
gust 10, 2021.
VI. DRAFTING INFORMATION
The principal author of this notice is
Christopher Dellana of the Office of Asso-
ciate Chief Counsel (Employee Benefits,
Exempt Organizations, and Employment
Taxes). For further information regarding
the WOTC, contact Mr. Dellana at (202)
317-5500 (not a toll-free number).
Update for Weighted
Average Interest Rates,
Yield Curves, and Segment
Rates
Notice 2021-50
This notice provides guidance on the
corporate bond monthly yield curve, the
corresponding spot segment rates used
under § 417(e)(3), and the 24-month aver-
age segment rates under § 430(h)(2) of the
Internal Revenue Code. In addition, this
notice provides guidance as to the interest
rate on 30-year Treasury securities under
§ 417(e)(3)(A)(ii)(II) as in effect for plan
years beginning before 2008 and the 30-
year Treasury weighted average rate under
§ 431(c)(6)(E)(ii)(I).
YIELD CURVE AND SEGMENT
RATES
Section 430 specifies the minimum
funding requirements that apply to sin-
gle-employer plans (except for CSEC
plans under § 414(y)) pursuant to § 412.
Section 430(h)(2) specifies the inter-
est rates that must be used to determine
a plan’s target normal cost and funding
target. Under this provision, present val-
ue is generally determined using three
24-month average interest rates (“segment
rates”), each of which applies to cash
flows during specified periods. To the ex-
tent provided under § 430(h)(2)(C)(iv),
these segment rates are adjusted by the ap-
plicable percentage of the 25-year average
segment rates for the period ending Sep-
tember 30 of the year preceding the cal-
endar year in which the plan year begins.
1

1
Pursuant to § 433(h)(3)(A), the 3
rd
segment rate determined under § 430(h)(2)(C) is used to determine the current liability of a CSEC plan (which is used to calculate the minimum amount
of the full funding limitation under § 433(c)(7)(C)).

August 30, 2021 334 Bulletin No. 2021–35
However, an election may be made un-
der § 430(h)(2)(D)(ii) to use the monthly
yield curve in place of the segment rates.
Notice 2007-81, 2007-44 I.R.B. 899,
provides guidelines for determining the
monthly corporate bond yield curve, and
the 24-month average corporate bond
segment rates used to compute the target
normal cost and the funding target. Con-
sistent with the methodology specified in
Notice 2007-81, the monthly corporate
bond yield curve derived from July 2021
data is in Table 2021-7 at the end of this
notice. The spot first, second, and third
segment rates for the month of July 2021
are, respectively, 0.63, 2.51, and 3.10.
The 24-month average segment rates
determined under § 430(h)(2)(C)(i)
through (iii) must be adjusted pursuant to
§ 430(h)(2)(C)(iv) to be within the appli-
cable minimum and maximum percentag-
es of the corresponding 25-year average
segment rates.
The 25-year average segment rates for
plan years beginning in 2020 and 2021
were published Notice 2019-51, 2019-41
I.R.B. 866, and Notice 2020-72, 2020-40
I.R.B. 789, respectively.
24-MONTH AVERAGE CORPORATE
BOND SEGMENT RATES
The three 24-month average corporate
bond segment rates applicable for August
2021 without adjustment for the 25-year
average segment rate limits are as follows:
24-Month Average Segment Rates Without 25-Year Average Adjustment
Applicable Month First Segment Second Segment Third Segment
August 2021 1.13 2.70 3.38
25-YEAR AVERAGE SEGMENT
RATES
Section 9706(a) of the American Res-
cue Plan Act of 2021, Pub. L. No. 117-2
(ARP), which was enacted on March 11,
2021, changes the 25-year average seg-
ment rates and the applicable minimum
and maximum percentages used under
§ 430(h)(3)(C)(iv) of the Code to adjust
the 24-month average segment rates.
Prior to this change, the applicable min-
imum and maximum percentages were
90% and 110% for a plan year beginning
in 2020, and 85% and 115% for a plan
year beginning in 2021, respectively. Af-
ter this change, the applicable minimum
and maximum percentages are 95% and
105% for a plan year beginning in 2020
or 2021. In addition, pursuant to this
change, any 25-year average segment
rate that is less than 5% is deemed to
be 5%.
2
Pursuant to § 9706(c)(1) of ARP, these
changes apply with respect to plan years
beginning on or after January 1, 2020.
However, § 9706(c)(2) of ARP provides
that a plan sponsor may elect not to have
these changes apply to any plan year be-
ginning before January 1, 2022.
3
The adjusted 24-month average seg-
ment rates set forth in the chart below
reflect § 430(h)(2)(C)(iv) of the Code as
amended by § 9706(a) of ARP. These ad-
justed 24-month average segment rates
apply only for plan years for which an
election under § 9706(c)(2) of ARP is not
in effect. For a plan year for which such an
election does not apply, the 24-month av-
erages applicable for August 2021, adjust-
ed to be within the applicable minimum
and maximum percentages of the corre-
sponding 25-year average segment rates
in accordance with § 430(h)(2)(C)(iv) of
the Code, are as follows:
Adjusted 24-Month Average Segment Rates
For Plan Years
Beginning In
Applicable
Month
First
Segment
Second
Segment
Third
Segment
2020August 20214.755.506.27
2021August 20214.755.366.11
The adjusted 24-month average seg-
ment rates set forth in the chart below do
not reflect the changes to § 430(h)(2)(C)
(iv) of the Code made by § 9706(a) of
ARP. These adjusted 24-month average
segment rates apply only for plan years for
which an election under § 9706(c)(2) of
ARP is in effect. For a plan year for which
such an election applies, the 24-month av-
2
Pursuant to this change, the 25-year averages of the first segment rate for 2020 and 2021 are increased to 5.00% because those 25-year averages as originally published are below 5.00%.
3
This election may be made either for all purposes for which the amendments under § 9706 of ARP apply or solely for purposes of determining the adjusted funding target attainment per-
centage under § 436 of the Code for the plan year.

Bulletin No. 2021–35 335 August 30, 2021
erages applicable for August 2021, adjust-
ed to be within the applicable minimum
and maximum percentages of the corre-
sponding 25-year average segment rates
in accordance with § 430(h)(2)(C)(iv) of
the Code, are as follows:
Pre-ARP Adjusted 24-Month Average Segment Rates
For Plan Years
Beginning In
Applicable
Month
First
Segment
Second
Segment
Third
Segment
2020August 20213.645.215.94
2021August 20213.324.795.47
30-YEAR TREASURY SECURITIES
INTEREST RATES
Section 431 specifies the minimum
funding requirements that apply to multi-
employer plans pursuant to § 412. Section
431(c)(6)(B) specifies a minimum amount
for the full-funding limitation described in
§ 431(c)(6)(A), based on the plan’s current
liability. Section 431(c)(6)(E)(ii)(I) pro-
vides that the interest rate used to calculate
current liability for this purpose must be
no more than 5 percent above and no more
than 10 percent below the weighted aver-
age of the rates of interest on 30-year Trea-
sury securities during the four-year period
ending on the last day before the beginning
of the plan year. Notice 88-73, 1988-2 C.B.
383, provides guidelines for determining
the weighted average interest rate. The rate
of interest on 30-year Treasury securities
for July 2021 is 1.94 percent. The Service
determined this rate as the average of the
daily determinations of yield on the 30-
year Treasury bond maturing in May 2051.
For plan years beginning in August 2021,
the weighted average of the rates of inter-
est on 30-year Treasury securities and the
permissible range of rates used to calculate
current liability are as follows:
Treasury Weighted Average Rates
For Plan Years
Beginning In
30-Year Treasury
Weighted Average
Permissible Range
90% to 105%
July 20212.201.98 to 2.31
MINIMUM PRESENT VALUE
SEGMENT RATES
In general, the applicable interest rates
under § 417(e)(3)(D) are segment rates
computed without regard to a 24-month
average. Notice 2007-81 provides guide-
lines for determining the minimum pres-
ent value segment rates. Pursuant to that
notice, the minimum present value seg-
ment rates determined for July 2021 are
as follows:
Minimum Present Value Segment Rates
Month First Segment Second Segment Third Segment
August 2021 0.63 2.51 3.10
DRAFTING INFORMATION
The principal author of this notice is
Tom Morgan of the Office of the Asso-
ciate Chief Counsel (Employee Benefits,
Exempt Organizations, and Employment
Taxes). However, other personnel from
the IRS participated in the development
of this guidance. For further information
regarding this notice, contact Mr. Morgan
at 202-317-6700 or Paul Stern at 202-317-
8702 (not toll-free numbers).

August 30, 2021 336 Bulletin No. 2021–35
Table 2021-7
Monthly Yield Curve for July 2021
Derived from July 2021 Data
MaturityYieldMaturityYieldMaturityYieldMaturityYieldMaturityYield
0.50.1320.53.0140.53.1160.53.1580.53.17
1.00.2521.03.0141.03.1161.03.1581.03.17
1.50.3721.53.0141.53.1161.53.1581.53.17
2.00.4822.03.0242.03.1162.03.1582.03.17
2.50.5822.53.0242.53.1162.53.1582.53.17
3.00.6823.03.0243.03.1163.03.1583.03.17
3.50.7923.53.0343.53.1263.53.1583.53.17
4.00.9024.03.0344.03.1264.03.1584.03.17
4.51.0224.53.0344.53.1264.53.1584.53.17
5.01.1425.03.0345.03.1265.03.1585.03.17
5.51.2725.53.0445.53.1265.53.1685.53.17
6.01.4026.03.0446.03.1266.03.1686.03.17
6.51.5426.53.0446.53.1266.53.1686.53.17
7.01.6727.03.0447.03.1267.03.1687.03.18
7.51.8027.53.0547.53.1367.53.1687.53.18
8.01.9328.03.0548.03.1368.03.1688.03.18
8.52.0528.53.0548.53.1368.53.1688.53.18
9.02.1629.03.0649.03.1369.03.1689.03.18
9.52.2629.53.0649.53.1369.53.1689.53.18
10.02.3630.03.0650.03.1370.03.1690.03.18
10.52.4430.53.0750.53.1370.53.1690.53.18
11.02.5231.03.0751.03.1371.03.1691.03.18
11.52.5931.53.0751.53.1371.53.1691.53.18
12.02.6532.03.0752.03.1472.03.1692.03.18
12.52.7132.53.0852.53.1472.53.1692.53.18
13.02.7633.03.0853.03.1473.03.1693.03.18
13.52.8033.53.0853.53.1473.53.1693.53.18
14.02.8334.03.0854.03.1474.03.1694.03.18
14.52.8634.53.0854.53.1474.53.1794.53.18
15.02.8935.03.0955.03.1475.03.1795.03.18
15.52.9135.53.0955.53.1475.53.1795.53.18
16.02.9336.03.0956.03.1476.03.1796.03.18
16.52.9536.53.0956.53.1476.53.1796.53.18
17.02.9637.03.0957.03.1477.03.1797.03.18
17.52.9737.53.1057.53.1477.53.1797.53.18
18.02.9838.03.1058.03.1578.03.1798.03.18
18.52.9938.53.1058.53.1578.53.1798.53.18
19.02.9939.03.1059.03.1579.03.1799.03.18
19.53.0039.53.1059.53.1579.53.1799.53.18
20.03.0040.03.1160.03.1580.03.17100.03.18

Bulletin No. 2021–35 337 August 30, 2021
26 CFR 601.204: Changes in accounting periods
and in methods of accounting.
(Also: Part I, Sections 446, 451, 1275; 1.451-1,
1.451-3, 1.451-8, 1.1275-2.)
Rev. Proc. 2021-34
SECTION 1. PURPOSE
This revenue procedure modifies Rev.
Proc. 2019-43, 2019-48 I.R.B. 1107, to
provide procedures under § 446 of the In-
ternal Revenue Code (Code) and § 1.446-
1(e) of the Income Tax Regulations to
obtain automatic consent of the Com-
missioner of Internal Revenue (Commis-
sioner) to change methods of accounting
to comply with final regulations under
§§ 1.451-3, 1.451-8, and 1.1275-2(l) and
to change methods of accounting for
certain inventory costs to comply with
§§ 263A, 461, and 471 if such changes
are made in connection with a change to
comply with § 1.451-3 and/or § 1.451-
8, as applicable. This revenue procedure
also modifies Rev. Proc. 2015-13, 2015-
5 I.R.B. 419, as clarified and modified by
Rev. Proc. 2015-33, 2015-24 I.R.B. 1067,
and further modified by Rev. Proc. 2016-
1, 2016-1 I.R.B. 1, Rev. Proc. 2017-59,
2017-48 I.R.B. 543, and Rev. Proc. 2021-
26, 2021-22 I.R.B. 1163, to provide proce-
dures for a taxpayer to obtain the consent
of the Commissioner to change its method
of accounting to comply with §§ 1.451-3
and/or 1.451-8, as applicable, by provid-
ing rules related to cost offset method
changes.
SECTION 2. BACKGROUND
.01 On December 22, 2017, §§ 451(b)
and (c) were amended by section 13221 of
Public Law 115-97, 131 Stat. 2054, 2113,
commonly referred to as the Tax Cuts
and Jobs Act (TCJA). Section 451(b) was
amended to provide that, for a taxpayer
using an accrual method of accounting,
the all events test for any item of gross in-
come, or portion thereof, is met no later
than when that item, or portion thereof,
is taken into account as revenue in an ap-
plicable financial statement (AFS) (AFS
Income Inclusion Rule). Section 451(b)
also overturned the historical Federal in-
come tax treatment of credit card late fees,
credit card cash advance fees, and inter-
change fees by subjecting the fees to the
AFS Income Inclusion Rule instead of the
original issue discount (OID) timing rules.
Section 451(c) was amended to provide
that an accrual method taxpayer may use
the deferral method of accounting provid-
ed in § 451(c) for advance payments.
.02 On April 12, 2018, the Department
of Treasury (Treasury Department) and
the Internal Revenue Service (IRS) issued
Notice 2018-35, 2018-18 I.R.B. 520, to
provide transitional guidance relating to
advance payments under Rev. Proc. 2004-
34, 2004-1 C.B. 991, as modified and clar-
ified by Rev. Proc. 2011-18, 2011 5 I.R.B.
443, and Rev. Proc. 2013-29, 2013-33
I.R.B. 141, and as modified by Rev. Proc.
2011-14, 2011-4 I.R.B. 330. The notice
provides that the Treasury Department
and the IRS expect to issue future guid-
ance regarding the treatment of advance
payments incorporating the TCJA amend-
ments to § 451(c) and that until such guid-
ance is applicable, taxpayers may contin-
ue to rely on Rev. Proc. 2004-34 for the
treatment of advance payments. Notice
2018-35 is obsolete for taxable years be-
ginning on or after January 1, 2021. See
TD 9941, 86 FR 810 (January 6, 2021),
corrected by 86 FR 126 (January 8, 2021)
and 86 FR 2974 (January 14, 2021) (as so
corrected, TD 9941).
.03 On May 29, 2018, the Treasury
Department and the IRS issued Rev. Proc.
2018-29, 2018-22 I.R.B. 634, modified by
Rev. Proc. 2018-49, 2018-41 I.R.B. 548,
which added section 16.11 to the List of
Automatic Changes, as defined in section
3.09 of Rev. Proc. 2015-13, to provide
procedures for a taxpayer to change its
method of accounting for the recognition
of income for Federal income tax purpos-
es to a method of accounting described in
the new financial accounting standards on
revenue from contracts with customers
issued by the Financial Accounting Stan-
dards Board (FASB) and the Internation-
al Accounting Standards Board (IASB)
(New Standards) if such change is made
for the taxable year in which the taxpay-
er adopts the New Standards. A change
under this section required that the tax-
payer’s method comply with § 451, as
amended by the TCJA. Rev. Proc. 2018-
29 indicated that the IRS expected to is-
sue future guidance addressing the TCJA
amendments to § 451.
.04 On December 17, 2018, the Trea-
sury Department and the IRS issued Rev.
Proc. 2018-60, 2018-51 I.R.B. 1045,
which added section 16.12 to the List
of Automatic Changes for a taxpayer to
change its method of accounting for the
timing of income recognition for Feder-
al income tax purposes to comply with
§ 451(b) for taxable years beginning af-
ter December 31, 2017 (or, December 31,
2018, in the case of income from a debt in-
strument having OID). Rev. Proc. 2018-60
permits a taxpayer to change its method of
accounting to comply with § 451(b) using
streamlined method change procedures if
the change results in a zero § 481(a) ad-
justment or if the taxpayer requesting the
change is a small business taxpayer, as de-
fined in the guidance.
.05 On September 9, 2019, the Treasury
Department and the IRS published pro-
posed regulations under § 1.451-3 (REG-
104870-18; 84 FR 47205) (proposed
§ 1.451-3), § 1.451-8 (REG-104554-18;
84 FR 47191) (proposed § 1.451-8), and
§ 1.1275-2(l) (REG-104870-18; 84 FR
47205) (proposed § 1.1275-2(l)). Pro-
posed § 1.451-3 provided rules relating to
the taxable year of inclusion in gross in-
come under § 451(b). Proposed §1.451-8
provided rules relating to the use of the de-
ferral method for advance payments under
§ 451(c). Proposed § 1.1275-2(l) provides
rules clarifying that an item of income
that is subject to the timing rules in pro-
posed § 1.451-3, such as specified cred-
it card fees, is not taken into account in
determining the amount of OID on a debt
instrument. Concurrent with the issuance
of the proposed regulations, the Treasury
Department and the IRS issued Rev. Proc.
2019-37, 2019-39 I.R.B. 731, which mod-
ified sections 16.10, 16.11, and 16.12 in
the List of Automatic Changes to provide
procedures for a taxpayer to obtain the
automatic consent of the Commissioner
to make a method change to comply with
§ 451(b), proposed § 1.451-3, proposed
§ 1.451-8, and proposed § 1.1275-2(l), as
applicable.
.06 On December 30, 2020, the Trea-
sury Department and the IRS issued final
regulations under § 1.451-3, § 1.451-8,
and § 1.1275-2(l). See TD 9941. The reg-
ulations are generally applicable for tax-
able years beginning on or after January 1,
2021. However, the rules in § 1.451-3(j)

August 30, 2021 338 Bulletin No. 2021–35
and § 1.1275-2(l)(1) for specified fees
that are not specified credit card fees, as
defined in § 1.451-3(j)(2), apply for tax-
able years beginning on or after January
6, 2022.
.07 However, a taxpayer and its related
parties, within the meaning of §§ 267(b)
and 707(b), may choose to apply both the
rules in § 1.451-3 and, to the extent rele-
vant, the rules in § 1.451-8 for a taxable
year beginning after December 31, 2017
and before January 1, 2021, provided the
rules in § 1.451-3 and, to the extent rele-
vant, the rules in § 1.451-8 are applied in
their entirety and in a consistent manner
for such taxable year and all subsequent
years. In addition, for specified credit
card fees, a taxpayer and its related par-
ties may apply both the rules in §§ 1.451-
3 and 1.1275-2(l) that apply to specified
credit card fees for a taxable year begin-
ning after December 31, 2018 and before
January 1, 2021, provided that the rules
in §§ 1.451-3 and 1.1275-2(l) that apply
to specified credit card fees are applied in
their entirety and in a consistent manner
for such taxable year and all subsequent
taxable years.
.08 Alternatively, a taxpayer may rely
on proposed § 1.451-3, proposed § 1.451-
8, and/or proposed § 1.1275-2(l), as ap-
plicable, for taxable years beginning after
December 31, 2017 (or December 31,
2018, in the case of specified credit card
fees) and before January 1, 2021. For a
specified fee that is not a specified credit
card fee, a taxpayer may neither choose
to apply the final regulations to, nor rely
on the proposed regulations for, a taxable
year beginning before January 6, 2022.
.09 The final regulations obsolete Rev.
Proc. 2004-33, 2004-1 C.B. 989, Rev.
Proc. 2004-34, Rev. Proc. 2005-47, 2005-
2 C.B. 269, Rev. Proc. 2011-18, Rev.
Proc. 2013-29, and Notice 2018-35 for
taxable years beginning on or after Janu-
ary 1, 2021. A taxpayer that relied on the
now obsoleted guidance must determine
whether a change in method of accounting
occurs once it ceases to use the obsoleted
guidance.
.10 A change to comply with the fi-
nal regulations under §§ 1.451-3, 1.451-
8, and/or 1.1275-2(l), as applicable, is a
change in method of accounting to which
the provisions of §§ 446 and 481 and the
accompanying regulations apply. Except
as otherwise provided by the Code or the
regulations, § 446(e) and § 1.446-1(e)(2)
require a taxpayer to secure the consent
of the Commissioner before changing a
method of accounting for Federal income
tax purposes. Section 1.446-1(e)(3)(ii)
authorizes the Commissioner to prescribe
administrative procedures that provide
the terms and conditions necessary for a
taxpayer to obtain consent to a change in
method of accounting. Rev. Proc. 2015-13
provides the general procedures by which
a taxpayer may obtain automatic consent
of the Commissioner to a change in meth-
od of accounting described in the List of
Automatic Changes. Section 6.03(1) of
Rev. Proc. 2015-13 sets forth the applica-
tion procedures for timely filing a change
in method of accounting under the auto-
matic change procedures. Such procedural
guidance provides that a taxpayer may not
request, or otherwise make, a retroactive
change in method of accounting on an
amended Federal income tax return, un-
less specifically authorized by the Com-
missioner or by statute. See section 2.05
of Rev. Proc. 2015-13, 2015-5 I.R.B 419,
425. A taxpayer that chooses to early ap-
ply the final regulations under §§ 1.451-3,
1.451-8, and/or 1.1275-2(l), as applicable,
to a taxable year beginning before January
1, 2021, must follow the rules for changes
in method of accounting under § 446, the
accompanying regulations, and the appli-
cable procedural guidance, as described
above. Accordingly, such taxpayer can-
not change its method(s) of accounting
to early apply the final regulations under
§§ 1.451-3, 1.451-8, and/or 1.1275-2(l),
as applicable, on an amended Federal in-
come tax return.
.11 Because a change to comply with
§§ 1.451-3, 1.451-8, and/or 1.1275-2(l),
as applicable, is a change in method of ac-
counting to which the provisions of § 446
and the accompanying regulations apply,
the item being changed to comply with
§§ 1.451-3, 1.451-8, and/or 1.1275-2(l),
as applicable, is determined by applying
§ 446 and the accompanying regulations.
See §§ 1.451-3(l)(1) and 1.451-8(g)(2). In
that regard, while §§ 451(b) and (c) and
the final regulations use the term “item of
gross income” to generally refer to income
that arises under a specific contract, the
term “item of gross income” is not synon-
ymous with the terms “item” or “material
item” as used throughout the regulations
under § 446.
.12 Rev. Proc. 2013-26, 2013-22 I.R.B.
1160, describes the proportional method
of accounting for OID on a pool of cred-
it card receivables. Under § 1.1275-2(l),
OID no longer includes a specified fee,
such as a specified credit card fee, that is
subject to the timing rules of § 1.451-3.
Therefore, Rev. Proc. 2021-35, 2021-35
I.R.B. 355, modifies Rev. Proc. 2013-26
to make clear that the proportional method
no longer applies to a specified fee, includ-
ing a specified credit card fee. See section
16.12 of Rev. Proc. 2019-43, as modified
by this revenue procedure, for the proce-
dures by which a taxpayer, including a
taxpayer using the proportional method
of accounting, can change its method of
accounting for specified credit card fees
to comply with § 451(b), as amended by
the TCJA, and §§1.451-3 and 1.1275-2(l).
Pursuant to that change, a taxpayer that
is already using the proportional method
of accounting is required to remove any
specified credit card fees from its pools
of credit card receivables. See Rev. Proc.
2021-35.
.13 Rev. Proc. 2019-43 provides the
current List of Automatic Changes to
which the automatic change procedures in
Rev. Proc. 2015-13 apply. Section 3 of this
revenue procedure modifies Rev. Proc.
2019-43 to provide procedures for a tax-
payer to obtain the automatic consent of
the Commissioner to change its methods
of accounting to comply with §§ 1.451-3,
1.451-8, and/or 1.1275-2(l), as applicable,
including special terms and conditions for
certain changes to comply with §§ 1.451-
3, 1.451-8, and/or 1.1275-2(l), as applica-
ble. Section 3 of this revenue procedure
also makes changes to the current auto-
matic changes in Rev. Proc. 2019-43 by:
(1) modifying sections 12.01, 12.02,
22.05, 22.11, and 22.18 of Rev. Proc.
2019-43 to temporarily waive the eligi-
bility rule in section 5.01(f) of Rev. Proc.
2015-13 for certain inventory changes
made in connection with changes to com-
ply with §§ 1.451-3 and 1.451-8.
(2) modifying the change in overall
method of accounting from the cash meth-
od to an accrual method in section 15.01
for taxpayers with an AFS;
(3) removing the automatic change for
credit card late fees in section 16.06;

Bulletin No. 2021–35 339 August 30, 2021
(4) modifying the automatic change for
advance payments under section 16.07 by
making the change inapplicable for a year
of change beginning on or after January
1, 2021;
(5) removing the automatic change for
credit card cash advance fees in section
16.08;
(6) modifying section 16.11 to make it
inapplicable for changes to comply with
§§ 451(b) and (c) and the regulations
thereunder, and modifying sections 16.10
and 16.12 to provide terms and conditions
that are similar to those provided under
section 16.11 for certain changes made in
the year in which the taxpayer adopts the
New Standards that are no longer permit-
ted to be made under section 16.11 and
that are now made under sections 16.10 or
16.12;
(7) modifying section 16.12 to remove
the automatic change to comply with
§ 451(b);
(8) correcting sections 16.11 and 16.12
of Rev. Proc. 2019-43 by providing that
changes in method of accounting made
under sections 16.11 and 16.12 with regard
to taxpayers who are members of consol-
idated groups generally are governed by
sections 16.11 and 16.12, as applicable,
rather than by § 1.1502-17(b)(2), which
is applicable to changes in the application
of the timing rules of § 1.1502-13 in ac-
counting for intercompany transactions
within the meaning of § 1.1502-13(b)(1)
(i). See § 1.1502-17(a) and (b)(1);
(9) modifying section 16.12 to provide
that the rules for netting the § 481(a) ad-
justment provided in section 16.12(4)(b)
(iii) of Rev. Proc. 2019-43, as modified by
this revenue procedure, generally apply to
certain changes related to the cost offset
methods under §§ 1.451-3(c) and § 1.451-
8(e) that are required to be filed under the
non-automatic change procedures;
(10) modifying section 20 to provide
a temporary automatic change under new
section 20.13 for a taxpayer to change
its method of accounting for inventory
costs to comply with §§ 1.461-1(a)(2) and
1.461-4(d)(4) if the taxpayer: (a) presently
takes inventory costs into account in a tax-
able year prior to the taxable year in which
such costs are incurred under § 461 and
the regulations thereunder; (b) recovers
such costs in a taxable year prior to the
taxable year in which ownership of inven-
tory is transferred to the customer to offset
income inclusions under § 451(b) and/or
§ 451(c); and (c) meets certain other re-
quirements; and
(11) modifying the automatic change
for OID on a pool of credit card receiv-
ables in section 30.02 (proportional meth-
od).
.14 Section 4 of this revenue procedure
modifies Rev. Proc. 2015-13 to provide
procedures for a taxpayer to obtain the
consent of the Commissioner to change
its method of accounting to comply with
§§ 1.451-3 and/or 1.451-8, as applicable,
by:
(1) adding a new automatic change
eligibility rule under section 5.01(1)(g)
that requires certain taxpayers making
a cost-offset related inventory method
change, as defined in new section 5.06, to
also make the corresponding cost offset
change for the same year of change; and
(2) adding concurrent automatic meth-
od change language in section 6.03(1)(b)
to provide for certain taxpayers to make
one or more cost-offset related inventory
method changes and one or more corre-
sponding cost offset changes on the same
Form 3115, Application for Change in Ac-
counting Method.
SECTION 3. MODIFICATIONS TO
REV. PROC. 2019-43
.01 Modification to section 12.01 of
Rev. Proc. 2019-43, relating to certain
uniform capitalization (UNICAP) methods
used by resellers and reseller-producers.
Section 12.01(2) of Rev. Proc. 2019-43 is
modified by adding new subparagraph (c)
to read as follows:
(c) Eligibility rule temporarily inappli-
cable for certain changes related to cost
offset method. The eligibility rule in sec-
tion 5.01(1)(f) of Rev. Proc. 2015-13 does
not apply to a method change under this
section 12.01 if:
(i) the taxpayer made or requested to
make a change during any of the five tax-
able years ending with the year of change
to recover inventory costs in a taxable
year prior to the taxable year in which
ownership of the inventory is transferred
to the customer to offset inclusions under
§ 451(b) and/or 451(c), as applicable;
(ii) in the case of a taxpayer with an
applicable financial statement (AFS), as
defined in section 16.12(1)(b) of this reve-
nue procedure, the taxpayer makes, for the
same year of change, a change in method
of accounting for income from the sale of
inventory under section 16.12(2)(a)(iii) of
this revenue procedure and, to the extent
the taxpayer receives advance payments
for the sale of inventory, section 16.12(2)
(a)(iv) of this revenue procedure, or in the
case of a taxpayer that does not have an
AFS, the taxpayer concurrently chang-
es its method of accounting for advance
payments from the sale of inventory under
section 16.12(2)(b)(ii) of this revenue pro-
cedure; and
(iii) the taxpayer makes the change un-
der this section 12.01 for its early appli-
cation year, as defined in section 16.12(4)
(c)(i) of this revenue procedure, or if a
taxpayer does not apply § 1.451-3 and/
or § 1.451-8 for a taxable year beginning
before January 1, 2021, for the taxpayer’s
first taxable year beginning on or after
January 1, 2021.
.02 Modification to section 12.02 of
Rev. Proc. 2019-43, relating to certain
uniform capitalization (UNICAP) meth-
ods used by producers and reseller-pro-
ducers. Section 12.02(4) of Rev. Proc.
2019-43 is modified to read as follows:
(4) Eligibility rule temporarily inappli-
cable.
(a) In general. The eligibility rule in
section 5.01(1)(f) of Rev. Proc. 2015-13,
2015-5 I.R.B. 419, does not apply to the
changes described in this section 12.02 for
the taxpayer’s first, second, or third tax-
able year ending on or after November 20,
2018.
(b) Eligibility rule temporarily inappli-
cable for certain changes related to cost
offset method. The eligibility rule in sec-
tion 5.01(1)(f) of Rev. Proc. 2015-13 does
not apply to a method change under this
section 12.02 if:
(i) the taxpayer made or requested to
make a change during any of the five tax-
able years ending with the year of change
to recover inventory costs in a taxable
year prior to the taxable year in which
ownership of the inventory is transferred
to the customer to offset inclusions under
§ 451(b) and/or 451(c), as applicable;
(ii) in the case of a taxpayer with an
applicable financial statement (AFS), as
defined in section 16.12(1)(b) of this reve-
nue procedure, the taxpayer makes, for the

August 30, 2021 340 Bulletin No. 2021–35
same year of change, a change in method
of accounting for income from the sale of
inventory under section 16.12(2)(a)(iii) of
this revenue procedure and, to the extent
the taxpayer receives advance payments
for the sale of inventory, section 16.12(2)
(a)(iv) of this revenue procedure, or in the
case of a taxpayer that does not have an
AFS, the taxpayer concurrently chang-
es its method of accounting for advance
payments from the sale of inventory under
section 16.12(2)(b)(ii) of this revenue pro-
cedure; and
(iii) the taxpayer makes the change un-
der this section 12.02 for its early appli-
cation year, as defined in section 16.12(4)
(c)(i) of this revenue procedure, or if a
taxpayer does not apply § 1.451-3 and/or
§ 1.451-8, as applicable, for a taxable year
beginning before January 1, 2021, for the
taxpayer’s first taxable year beginning on
or after January 1, 2021.
.03 Modifications to section 15.01 of
Rev. Proc. 2019-43, relating to changes
in overall method of accounting from the
cash method to an accrual method.
(1) Section 15.01(1)(a) of Rev. Proc.
2019-43 is modified by replacing the last
paragraph thereof with the following:
Lastly, for a taxable year beginning af-
ter December 31, 2017, or December 31,
2018 in the case of specified credit card
fees, as defined in § 1.451-3(j)(2), and be-
fore January 1, 2021, a taxpayer with an
applicable financial statement (AFS) that
is changing its overall method of account-
ing from the cash method to an accrual
method qualifies to use this section 15.01
to comply with § 451(b)(1), and, if appli-
cable, § 451(b)(4), or the proposed regu-
lations under § 1.451-3 (REG-104870-18;
84 FR 47191) (proposed § 1.451-3). For a
taxable year beginning after December 31,
2017, or December 31, 2018 in the case of
specified credit card fees, a taxpayer with
an AFS that is changing its overall method
of accounting from the cash method to an
accrual method qualifies to use this sec-
tion 15.01 to comply with § 1.451-3. For
purposes of this section 15.01, the term
“AFS” is defined under: § 451(b)(3) for a
taxpayer making a change to comply with
§ 451(b); proposed § 1.451-3(c)(1) for a
taxpayer making a change to comply with
proposed § 1.451-3; or § 1.451-3(b)(5) for
a taxpayer making a change to comply
with § 1.451-3.
A taxpayer that uses this section 15.01
to comply with § 1.451-3 must attach a
statement to its Form 3115 that provides
a description of the proposed method(s)
under § 1.451-3 to which it is changing.
For example, a taxpayer that chooses to
apply the alternative AFS revenue meth-
od in § 1.451-3(b)(2)(ii) must indicate in
the statement attached to its Form 3115
that it is choosing to comply with the AFS
income inclusion rule in § 1.451-3(b)(1)
by applying the alternative AFS revenue
method described in § 1.451-3(b)(2)(ii).
(2) Section 15.01(1)(b) of Rev. Proc.
2019-43 is modified by removing divi-
sion (ix), and adding new divisions (ix)
through (xiii) to read as follows:
(ix) a taxpayer with an AFS that wants
to make a change in method of accounting
for allocating transaction price between
item(s) of gross income that are subject
to § 451 and item(s) of gross income that
are subject to a special method of account-
ing, as defined in § 451(b)(2), proposed
§ 1.451-3(c)(5), or § 1.451-3(a)(14), as
applicable, including a change to comply
with the transaction price allocation rules
in § 1.451-3(d)(5);
(x) a taxpayer with an AFS that wants
to change to use the AFS cost offset meth-
od, as defined in § 1.451-3(c), if the tax-
payer receives advance payments from the
sale of inventory and does not also make
a concurrent change to apply the advance
payment cost offset method, as defined in
§ 1.451-8(e), for the same year of change
by using section 16.12 of this revenue
procedure, or a taxpayer with an AFS that
wants to change to use the advance pay-
ment cost offset method if the taxpayer
is required to include gross income from
the sale of inventory under § 1.451-3 and
does not also make a change to apply the
AFS cost offset method;
(xi) a taxpayer with an AFS that wants
to make a change in method of accounting
for specified fees, as defined in proposed
§ 1.451-3(i)(2) or § 1.451-3(j)(2), as ap-
plicable, other than specified credit card
fees;
(xii) a taxpayer that wants to make a
change in method of accounting for pay-
ments within the scope of the specified
good exception, as defined in § 1.451-8(a)
(1)(ii), if the proposed method of account-
ing is to include such payments in gross
income under § 1.451-3 in one or more
taxable years following the taxable year
of receipt; or
(xiii) a taxpayer with an AFS that
makes a change to apply § 1.451-3 for a
taxable year that begins before January 1,
2021, and fails to comply with the require-
ments in § 1.451-3(m)(3).
(3) Section 15.01(2)(b) of Rev. Proc.
2019-43 is modified to read as follows:
(b) Accrual method of accounting is
a method identified by § 446(c)(2) and
§§ 1.446-1(c)(1)(ii), 1.451-1(a), 1.451-
3, and 1.461-1(a)(2). For a taxable year
beginning after December 31, 2017, for
which the taxpayer has an AFS, the all
events test under § 451(b)(1)(C) and
§ 1.451-1(a) for any item of gross income,
or portion thereof, is met no later than
when that item, or portion thereof, is taken
into account as AFS revenue. See § 451(b)
(1) and § 1.451-3(b).
(4) Section 15.01(2)(d) of Rev. Proc.
2019-43 is modified to read as follows:
(d) Special method of accounting with-
in the meaning of this section 15.01 is a
method of accounting, other than the cash
method, expressly permitted or required
by the Code, regulations, or in other guid-
ance published in the IRB, that deviates
from the tax accrual accounting rules of
§§ 446, 451, 461, and the regulations
thereunder. For purposes of this section
15.01, a deferral method under section
451(c) and the regulations thereunder
is deemed to be a special method of ac-
counting. Examples of special methods of
accounting include the installment method
of accounting under § 453, the mark-to-
market method under § 475, and a long-
term contract method under § 460. In
contrast, application of the all-events test
under a specific set of facts is not a special
method of accounting. See, for example,
Rev. Rul. 69-314, 1969-1 C.B. 139 (con-
cerning the treatment of retainages).
(5) Section 15.01(3)(a) of Rev. Proc.
2019-43 is modified by adding new divi-
sion (iii) to read as follows:
(iii) Section 481(a) adjustment period
for changes relating to specified credit
card fees. In the case of income from a
specified credit card fee, the § 481(a) ad-
justment period for any qualified change
in method of accounting is six taxable
years (year of change and next five tax-
able years). For purposes of this section
15.01(3)(a)(iii), a qualified change in

Bulletin No. 2021–35 341 August 30, 2021
method of accounting is a change in meth-
od of accounting for income from a spec-
ified credit card fee to a method that is
required by § 451(b), as added by section
13221 of Public Law 115-97, 131 Stat.
2054 (Dec. 22, 2017), commonly referred
to as the Tax Cuts and Jobs Act (TCJA),
for such income, but only for the taxpay-
er’s first taxable year beginning after De-
cember 31, 2018. Accordingly, a taxpayer
that makes a qualified change in method
of accounting as part of its overall method
change under section 15.01 of this reve-
nue procedure is required to use an adjust-
ment period of six taxable years for the
portion of the overall § 481(a) adjustment
that is attributable to the qualified change
in method of accounting. The § 481(a) ad-
justment period for the remainder of the
overall § 481(a) adjustment required by
section 15.01(3)(a)(i) of this revenue pro-
cedure is determined without regard to the
qualified change in method of accounting.
(6) Section 15.01(3)(b)(ii) of Rev. Proc.
2019-43 is modified to read as follows:
(ii) Certain eligibility rule temporar-
ily inapplicable. For a taxpayer with an
AFS that changes to an overall accru-
al method under this section 15.01 that
complies with § 451(b)(1), and, if appli-
cable, § 451(b)(4), or proposed § 1.451-
3, the eligibility rule in section 5.01(1)
(e) of Rev. Proc. 2015-13, 2015-5 I.R.B.
419, does not apply to such change for
the taxpayer’s first, second or third tax-
able year beginning after December 31,
2017, provided such taxable year begins
before January 1, 2021. In addition, for a
taxpayer with an AFS that changes to an
overall accrual method under this section
15.01 that complies with § 1.451-3 for a
taxable year beginning before January 1,
2021, the eligibility rule in section 5.01(1)
(e) of Rev. Proc. 2015-13 does not apply
to such change for such taxable year. For
a taxpayer with an AFS that does not ap-
ply § 1.451-3 for a taxable year beginning
before January 1, 2021, and changes to an
overall accrual method under this section
15.01 that complies with § 1.451-3 for the
first taxable year that begins on or after
January 1, 2021, the eligibility rule in sec-
tion 5.01(1)(e) of Rev. Proc. 2015-13 does
not apply to such change for such taxable
year.
(7) Section 15.01(3)(d)(i) of Rev. Proc.
2019-43, is modified to read as follows:
(i) Concurrent automatic changes. Ex-
cept as provided in section 15.01(3)(d)(ii)
of this revenue procedure, a taxpayer that
is changing from the overall cash meth-
od to an overall accrual method under
this section 15.01 and changing to one or
more special methods, as permitted under
section 15.01(1)(a)(ii), (iii), or (iv) of this
revenue procedure, must timely file a sin-
gle Form 3115 for all changes and must
enter the designated automatic accounting
method change numbers for all changes
on the appropriate line of Form 3115. For
example, a taxpayer making both a change
from the overall cash method to an overall
accrual method under this section 15.01
and a change to the deferral method for
advance payments under section 16.07
or 16.12 of this revenue procedure must
timely file a single Form 3115 for both
changes and enter the designated auto-
matic accounting method change numbers
for both changes on the appropriate line
on that Form 3115. See section 6.03(1)(b)
of Rev. Proc. 2015-13 for information on
making concurrent changes.
(8) Section 15.01(3) of Rev. Proc.
2019-43 is modified by:
(a) removing subparagraph (f), titled
“Concurrent automatic changes for a
taxpayer with an AFS that complies with
§ 451(b).”; and
(b) removing subparagraph (g), titled
“Concurrent change in the timing of rec-
ognition of income due to the New Stan-
dards.”
(9) Section 15.01(5) of Rev. Proc.
2019-43 is modified to read as follows:
(5) No ruling on method used. The
consent granted under section 9 of Rev.
Proc. 2015-13 for a change made under
this section 15.01 is not a determination
by the Commissioner that the new method
of accounting is a permissible method of
accounting under § 451(b) and does not
create a presumption that the allocation
method used under § 451(b)(4) is a per-
missible method of accounting. The direc-
tor may ascertain whether the new method
of accounting is a permissible method of
accounting under § 451 and whether the
allocation method is permissible under
§ 451(b)(4). This section 15.01(5) does
not apply to a taxpayer with an AFS that is
making a change to a method of account-
ing permissible under proposed § 1.451-3
or § 1.451-3.
.04 Modification to section 16.06 of
Rev. Proc. 2019-43, relating to credit
card late fees. Section 16.06 of Rev. Proc.
2019-43 is modified to remove the auto-
matic change in method of accounting in
section 16.06 for credit card late fees and
to read as follows:
.06 [Reserved]
.05 Modification to section 16.07 of
Rev. Proc. 2019-43, relating to advance
payments. Section 16.07(1) of Rev. Proc.
2019-43 is modified by: redesignating
subparagraph (b) as division (b)(i) with
a new heading that reads “In general.”;
adding a heading to subparagraph (b) that
reads “Inapplicability.”; and adding new
division (b)(ii) to read as follows:
(ii) Limited time to make change. This
change does not apply to taxable years be-
ginning on or after January 1, 2021.
.06 Modification to section 16.08 of
Rev. Proc. 2019-43, relating to credit card
cash advance fees. Section 16.08 of Rev.
Proc. 2019-43 is modified to remove the
automatic change in method of account-
ing in section 16.08 for credit card cash
advance fees and to read as follows:
.08 [Reserved]
.07 Modification of section 16.10 of
Rev. Proc. 2019-43, relating to changes
in applicable financial statements for pur-
poses of applying certain revenue recog-
nition methods of accounting.
(1) Section 16.10 of Rev. Proc. 2019-
43 is modified to read as follows:
.10 Change in applicable financial
statements (AFS) for purposes of applying
certain revenue recognition methods of
accounting.
(1) Description of change.
(a) Applicability.
(i) This change applies to a taxpayer
that has an applicable financial statement
(AFS), as defined in section 4.06 of Rev.
Proc. 2004-34, 2004-1 C.B. 991, as mod-
ified and clarified by Rev. Proc. 2011-18,
2011-5 I.R.B. 443, and Rev. Proc. 2013-
29, 2013-33 I.R.B. 141, and as modified
by Rev. Proc. 2011-14, 2011-4 I.R.B. 330,
that: (A) receives advance payments, as
defined in section 4 of Rev. Proc. 2004-34,
(B) uses the deferral method described in
section 5.02(3)(a) of Rev. Proc. 2004-34
for including those advance payments in
gross income in accordance with its AFS,
(C) changes the manner in which it recog-
nizes advance payments in revenues in its

August 30, 2021 342 Bulletin No. 2021–35
AFS, and (D) wants to change its method
of accounting to use the new AFS method
of recognizing advance payments in reve-
nues in its AFS for determining the extent
to which advance payments are included
in gross income under Rev. Proc. 2004-34.
See also Notice 2018-35, 2018-18 I.R.B.
520.
(ii) This change applies to a taxpayer
that has an AFS, as defined in proposed
§ 1.451-8(b)(2) (REG-104554-18; 84 FR
47191), that : (A) receives advance pay-
ments, as defined in proposed § 1.451-
8(b)(1); (B) uses the deferral method
described in proposed § 1.451-8(c); (C)
changes the manner in which it recognizes
advance payments in revenues in its AFS;
and (D) wants to change its method of ac-
counting to use the new AFS method of
recognizing advance payments in reve-
nues in its AFS for determining the extent
to which advance payments are included
in income under proposed § 1.451-8(c).
(iii) This change applies to a taxpayer
with an AFS, as defined in § 451(b)(3),
that: (A) includes amounts in income in
accordance with § 451(b); (B) changes
the manner in which the item, or portion
thereof, is taken into account in revenue in
its AFS, as defined in § 451(b)(3), includ-
ing, if applicable, a change in the manner
in which transaction price is allocated to
performance obligations; and (C) wants to
change its method of accounting to use the
new AFS method of taking into account
the item, or portion thereof, in revenue in
its AFS for purposes of § 451(b)(1)(A),
including, if applicable, a change in the
manner in which transaction price is allo-
cated for purposes of § 451(b)(4).
(iv) This change applies to a taxpay-
er with an AFS, as defined in proposed
§ 1.451-3(c)(1) (REG-104870-18; 84
FR 47205), that: (A) includes amounts
in income in accordance with proposed
§ 1.451-3; (B) changes the manner in
which the item, or portion thereof, is taken
into account as revenue in its AFS, includ-
ing, if applicable, a change in the manner
in which transaction price is allocated to
performance obligations; and (C) wants
to change its method of accounting to use
the new AFS method of taking into ac-
count the item, or portion thereof, in rev-
enue in its AFS for purposes of proposed
§ 1.451-3(b), including, if applicable, a
change in the manner in which transaction
price is allocated for purposes of proposed
§ 1.451-3(g).
(v) This change applies to a taxpayer
with an AFS, as defined in § 1.451-3(a)
(5), that: (A) includes amounts in income
in accordance with § 1.451-3; (B) changes
the manner in which the item, or portion
thereof, is taken into account as AFS reve-
nue, as defined in § 1.451-3(a)(4), includ-
ing, if applicable, a change in the manner
in which transaction price is allocated to
performance obligations; and (C) wants
to change its method of accounting to use
the new AFS method of taking into ac-
count the item, or portion thereof, in AFS
revenue for purposes of § 1.451-3(b)(1),
including, if applicable, a change in the
manner in which transaction price is allo-
cated for purposes of § 1.451-3(d).
(vi) This change applies to a taxpayer
with an AFS, as defined in § 1.451-3(a)
(5), that: (A) receives an advance pay-
ment, as defined in § 1.451-8(a)(1); (B)
uses the deferral method described in
§ 1.451-8(c); (C) changes the manner in
which it recognizes advance payments in
AFS revenue, as defined in § 1.451-8(a)
(4), including, if applicable, a change in
the manner in which payments are allo-
cated to performance obligations; and (D)
wants to change its method of accounting
to use the new AFS method of recogniz-
ing advance payments in AFS revenue
for purposes of determining the extent to
which advance payments are included in
income under § 1.451-8, including, if ap-
plicable, a change in the manner in which
payments are allocated for purposes of
§ 1.451-8(c)(8).
(b) Inapplicability.
(i) Changes relating to Rev. Proc.
2004-34. The change described in section
16.10(1)(a)(i) of this revenue procedure
does not apply to:
(A) a taxpayer that uses a present meth-
od of accounting for advance payments
that is not the deferral method described in
section 5.02(3)(a) of Rev. Proc. 2004-34.
For example, this change does not apply
to a taxpayer that uses the full inclusion
method under section 5.01 of Rev. Proc.
2004-34;
(B) a taxpayer that wants to change
its method for allocating payments under
section 5.02(4) of Rev. Proc. 2004-34; or
(C) taxable years beginning on or after
January 1, 2021.
(ii) Changes relating to § 451(b), pro-
posed § 1.451-3, or proposed § 1.451-8.
A change described in section 16.10(1)(a)
(ii), (iii), or (iv) of this revenue procedure
does not apply to:
(A) a taxpayer whose present method of
accounting does not comply with § 451(b)
or proposed § 1.451-3, as applicable, for
a change described in section 16.10(1)(a)
(iii) or (iv) of this revenue procedure;
(B) a taxpayer whose present method
is not the deferral method under proposed
§ 1.451-8(c), for a change described in
section 16.10(1)(a)(ii) of this revenue pro-
cedure. For example, this change does not
apply to a taxpayer that uses the full inclu-
sion method under § 451(c)(1)(A) or pro-
posed § 1.451-8(a), or the non-AFS defer-
ral method under proposed § 1.451-8(d);
(C) a taxpayer that wants to change
its method for allocating payments under
§ 451(c)(1)(D) or proposed § 1.451-8(c)
(6);
(D) a taxpayer that wants to change its
method for allocating transaction price
between performance obligations that
are accounted for under § 451(b) or pro-
posed § 1.451-3, and performance ob-
ligations that are accounted for under a
special method of accounting, as defined
in § 451(b)(2) and proposed § 1.451-3(c)
(5); or
(E) taxable years beginning on or after
January 1, 2021.
(iii) Changes relating to § 1.451-3 or
§ 1.451-8. A change described in section
16.10(1)(a)(v) or (vi) of this revenue pro-
cedure does not apply to:
(A) a taxpayer whose present method of
accounting is not described in § 1.451-3,
for a change described in section 16.10(1)
(a)(v) of this revenue procedure. A tax-
payer that wants to change to a method
of accounting described in §1.451-3 must
use section 16.12(2)(a)(v) of this revenue
procedure to make such change;
(B) a taxpayer whose present method
of accounting for advance payments is not
the deferral method under § 1.451-8(c),
for a change described in section 16.10(1)
(a)(vi) of this revenue procedure. For ex-
ample, this change does not apply to a tax-
payer that uses the full inclusion method
under § 1.451-8(b) or the non-AFS defer-
ral method under § 1.451-8(d). However,
this change does apply to a taxpayer that
uses both the cost offset method under

Bulletin No. 2021–35 343 August 30, 2021
§ 1.451-8(e) and the deferral method un-
der § 1.451-8(c);
(C) a taxpayer that wants to change its
method for allocating payments described
in § 1.451-8(c)(8)(iii); or
(D) a taxpayer that wants to change its
method for allocating transaction price for
contracts described in § 1.451-3(d)(5).
(c) Restatements of AFS. A taxpay-
er’s restatement of its AFS for financial
accounting presentation does not affect
the propriety of the taxpayer’s method of
accounting for revenue recognized in the
prior taxable year(s). For example, if the
taxpayer properly uses the deferral meth-
od described in § 1.451-8(c) for including
advance payments in gross income in ac-
cordance with its AFS, the taxpayer satis-
fies the requirement of section 16.10(1)(a)
(vi) of this revenue procedure even if the
AFS for that taxable year is later restated
and may change its method of accounting
under this section 16.10 if it is otherwise
eligible.
(2) Manner of making change.
(a) Cut-off basis or a § 481(a) adjust-
ment.
(i) Cut-off basis for certain changes.
(A) In general. Except as provided in
section 16.10(2)(a)(i)(B) of this revenue
procedure, a change made under section
16.10(1)(a)(i), (ii), or (vi) of this revenue
procedure is made on a cut-off basis and
applies to advance payments received by
the taxpayer on or after the beginning of
the year of change. Accordingly, any ad-
vance payments received prior to the year
of change (prior advance payments) are
accounted for under the taxpayer’s former
method of accounting, and any advance
payments received in the year of change
and in subsequent taxable years are ac-
counted for under the taxpayer’s new
method of accounting. A taxpayer that
changes its method of allocating payments
for purposes of § 1.451-8(c)(8)(i) must al-
locate any payments received prior to the
year of change using the taxpayer’s for-
mer method of accounting. Accordingly,
a § 481(a) adjustment is neither permitted
nor required.
(B) Section 481(a) adjustment for
certain changes. If a taxpayer makes a
change under section 16.10(1)(a)(i), (ii),
or (vi) of this revenue procedure, and the
AFS treatment of prior advance payments
in the year of change or a subsequent tax-
able year is relevant for purposes of deter-
mining the amount of such payments that
is required to be included in gross income
in the year of change or a subsequent tax-
able year, the taxpayer must implement
the change with a § 481(a) adjustment as
provided in sections 7.02 and 7.03 of Rev.
Proc. 2015-13.
(ii) Cut-off basis or § 481(a) adjust-
ment for certain changes. A taxpayer that
makes a change under section 16.10(1)(a)
(iii) or (iv) of this revenue procedure as a
result of adopting the New Standards, as
defined in section 16.11(1) of this revenue
procedure, in the year of change may im-
plement the change with either a § 481(a)
adjustment as provided in sections 7.02
and 7.03 of Rev. Proc. 2015-13, or on a
cut-off basis. If the taxpayer implements
the change on a cut-off basis,
(A) the change applies to contracts en-
tered into on or after the beginning of the
year of change;
(B) all changes made under section
16.10(1)(a)(iii) or (iv) of this revenue pro-
cedures for the same year of change must
be implemented using a cut-off basis; and
(C) a § 481(a) adjustment is neither
permitted nor required.
(iii) Computing § 481(a) adjustments
when the year of change is a year in which
the taxpayer implements a change in ac-
counting principle with a retained earn-
ings adjustment. If the year of change is
a year in which the taxpayer implements
a change in accounting principle for AFS
purposes, including a change in the meth-
od of applying an accounting principle
for AFS purposes, and the change in ac-
counting principle is implemented with a
retained earnings adjustment that is taken
into account during the year of change, the
taxpayer is required to treat such adjust-
ment as being taken into account in the
taxable year prior to the year of change
for purposes of computing the § 481(a)
adjustment. An AFS change to adopt the
New Standards, as defined in section
16.11(1) of this revenue procedure, is an
example of a change in accounting prin-
ciple.
(iv) Example. Computing a § 481(a)
adjustment when the taxpayer presently
uses the AFS cost offset method - relat-
ed accounts. B is in the trade or business
of selling computers. B uses an accrual
method of accounting and computes Fed-
eral income tax on a calendar-year basis
and has an AFS, as defined in § 1.451-3(a)
(5). B is not under examination within
the meaning of section 3.18 of Rev. Proc.
2015-13. B does not receive advance pay-
ments. For 2021, B makes two changes
in method of accounting to comply with
§ 1.451-3. Specifically, pursuant to section
16.12(2)(a)(iii)(A) of this revenue proce-
dure, B changes its method of accounting
for gross income from the sale of com-
puters to apply the AFS income inclusion
rule and, pursuant to section 16.12(2)(a)
(iii)(C) of this revenue procedure, changes
its method of accounting to apply the AFS
cost offset method. For 2022, B chang-
es the manner in which income from the
sale of computers is taken into account as
AFS revenue, as defined in § 1.451-3(a)
(4), and changes its method of accounting
under section 16.10(1)(a)(v) of this sec-
tion to use the new AFS method. Howev-
er, B continues to use the AFS cost offset
method. In computing the § 481(a) ad-
justment resulting from the change to the
new method of computing AFS revenue
for 2022 under section 16.10(1)(a)(v) of
this revenue procedure, B must take into
account its continued use of the AFS cost
offset method. See section 3.15 of Rev.
Proc. 2015-13.
(b) In accordance with § 1.446-1(e)
(3)(ii), the requirement of § 1.446-1(e)
(3)(i) to file a Form 3115 is waived and a
statement in lieu of a Form 3115 is autho-
rized for a change made under this section
16.10. Notwithstanding the definition of
Form 3115 in section 3.07 of Rev. Proc.
2015-13, 2015-5 I.R.B. 419, the statement
in lieu of a Form 3115 that is permitted
under this section 16.10 is considered a
Form 3115 for purposes of the automatic
consent procedures of Rev. Proc. 2015-13.
However, the requirement to file the dupli-
cate copy, under section 6.03(1)(a) of Rev.
Proc. 2015-13, is waived. The statement
attached to the taxpayer’s return for the
year of change must include the following
information for each applicant:
(i) the designated automatic accounting
change number for this change, which is
“153;”
(ii) the applicant’s name, employer
identification number (or social security
number in the case of an individual), and
type of applicant, as would be provided
had a Form 3115 been required;

August 30, 2021 344 Bulletin No. 2021–35
(iii) the year of change (both the begin-
ning and ending dates);
(iv) the type of AFS used by the appli-
cant, as defined in applicable guidance,
and which change the applicant is mak-
ing under section 16.10(1)(a) of this rev-
enue procedure. See section 4.06 of Rev.
Proc. 2004-34, § 451(b)(3), proposed
§ 1.451-8(b)(2), proposed § 1.451-3(c)(1),
§ 1.451-3(a)(5); and/or § 1.451-8(a)(5), as
applicable;
(v) a detailed and complete descrip-
tion of each item affected by the change
in AFS revenue recognition and the line
number (or schedule) where the affected
item is reflected on the Federal income tax
return for the year of change, and if ap-
plicable, the § 481(a) adjustment for each
change; and
(vi) a detailed description of the basis
used for AFS revenue recognition (that is,
the method the applicant uses in its AFS)
both before and after the AFS change.
(c) Concurrent automatic change. A
taxpayer may make more than one change
under this section 16.10 on the same state-
ment in lieu of a Form 3115 for the same
year of change. The taxpayer must sepa-
rately provide all of the information re-
quired for each change on that statement.
(3) Certain eligibility rule inapplica-
ble. The eligibility rule in section 5.01(1)
(f) Rev. Proc. 2015-13 does not apply to
this change.
(4) No audit protection. A taxpayer
does not receive audit protection under
section 8.01 of Rev. Proc. 2015-13 for this
change. See section 8.02(2) of Rev. Proc.
2015-13.
(5) Designated automatic accounting
method change number. The designat-
ed automatic accounting method change
number for a change under this section
16.10 is “153.”
(6) Contact information. For further
information regarding a change under this
section, contact Maria Castillo-Valle at
(202) 317-7003 (not a toll-free number).
.08 Modification to section 16.11 of
Rev. Proc. 2019-43, relating to changes in
the timing of recognition of income due to
the New Standards.
(1) Section 16.11(2) of Rev. Proc.
2019-43 is modified by deleting the last
two sentences.
(2) Section 16.11(3) of Rev. Proc.
2019-43 is modified by removing the “or”
at the end of section 16.11(3)(d), inserting
at the end of section 16.11(3)(e) an “; or”
and adding a new subparagraph (f) at the
end thereof to read as follows:
(f) an item of gross income that is
required to be accounted for under
§ 451(b) or § 451(c). Accordingly, a
taxpayer that wants to make a change
in method of accounting for an item of
gross income to comply with § 451(b),
the proposed section 451(b) regulations
(REG-104870-18; 84 FR 47205) (pro-
posed § 1.451-3), the proposed section
451(c) regulations (REG-104554-18;
84 FR 47191) (proposed § 1.451-8),
§ 1.451-3 and/or § 1.451-8, as applica-
ble, in the year in which it adopts the
New Standards is not permitted to do so
under section 16.11 of this revenue pro-
cedure. See, however, sections 16.07,
16.10, or 16.12, as applicable, of this
revenue procedure.
(3) Section 16.11(4) of Rev. Proc.
2019-43 is modified by replacing the date
“May 10, 2021” with the date “May 10,
2022.”
(4) Section 16.11(5)(a) of Rev. Proc.
2019-43 is modified to read as follows:
(a) Cut-off basis or § 481(a) adjust-
ment. A taxpayer making a change under
this section 16.11 may implement the
change with either a § 481(a) adjustment
as provided in sections 7.02 and 7.03 of
Rev. Proc. 2015-13, or on a cut-off basis.
If the taxpayer implements the change on
a cut-off basis, (i) the taxpayer must al-
locate any payments received prior to the
year of change using the taxpayer’s for-
mer method of accounting, (ii) all changes
made under this section 16.11 must be im-
plemented using a cut-off basis, and (iii)
a § 481(a) adjustment is neither permitted
nor required. Changes under this section
16.11 with regard to taxpayers who are
members of consolidated groups gener-
ally are governed by this section 16.11
rather than by § 1.1502-17(b)(2) (appli-
cable to changes in the application of the
timing rules of § 1.1502-13 in accounting
for intercompany transactions (within the
meaning of § 1.1502-13(b)(1)(i)). See
§ 1.1502-17(a) and (b)(1).
(5) Section 16.11(6) of Rev. Proc. 2019-
43 is removed and paragraphs (7)–(11) are
renumbered (6)-(10), respectively.
(6) Newly renumbered section 16.11(6)
of Rev. Proc. 2019-43 is modified by re-
placing the date “May 10, 2021” with the
date “May 10, 2022.”
(7) Newly renumbered section
16.11(10) of Rev. Proc. 2019-43 is mod-
ified to read as follows:
(10) Contact information. For further
information regarding a change under this
section, contact Sharon Horn at (202) 317-
7003 (not a toll-free number).
.09 Modifications to section 16.12 of
Rev. Proc. 2019-43, relating to changes
in the timing of income recognition under
§ 451(b) and (c).
(1) Section 16.12 of Rev. Proc. 2019-
43 is modified to read as follows:
.12 Changes in the timing of income
recognition under § 451(b) and (c).
(1) Description of change.
(a) In general. This change applies to
an accrual method taxpayer with an appli-
cable financial statement (AFS) that wants
to make certain changes in method of ac-
counting described in section 16.12(2)(a)
of this revenue procedure. This change
also applies to a taxpayer without an AFS
that wants to make certain changes in
method of accounting described in section
16.12(2)(b) of this revenue procedure.
(b) Applicable terms. For this section
16.12, the term “AFS” is defined under
proposed § 1.451-3(c)(1) (REG-104870-
18; 84 FR 47205) for a taxpayer making
a change to apply proposed § 1.451-3 and/
or proposed § 1.451-8 (REG-104554-18;
84 FR 47191), as applicable, or under
§ 1.451-3(b)(5) for a taxpayer making a
change to apply § 1.451-3 and/or § 1.451-
8, as applicable. Additionally, because a
change to comply with §§ 1.451-3, 1.451-
8, and/or 1.1275-2(l), as applicable, is a
change in method of accounting to which
the provisions of § 446 and the accom-
panying regulations apply, the item be-
ing changed to comply with §§ 1.451-3,
1.451-8, and/or 1.1275-2(l), as applicable,
is determined by applying § 446 and the
accompanying regulations. See §§ 1.451-
3(l)(1) and 1.451-8(g)(2). In that regard,
while §§ 451(b) and (c) and the final reg-
ulations use the term “item of gross in-
come” to generally refer to income that
arises under a specific contract, the term
“item of gross income” is not synonymous
with the terms “item” or “material item”
as used throughout the regulations under
§ 446.
(2) Applicability.

Bulletin No. 2021–35 345 August 30, 2021
(a) Taxpayer with an AFS. This change
applies to an accrual method taxpayer
with an AFS that:
(i) for a taxable year beginning be-
fore January 1, 2021, wants to change
to a method of accounting under pro-
posed § 1.451-3 (including a change for
a specified credit card fee under proposed
§ 1.451-3(i) and proposed § 1.1275-2(l));
(ii) for a taxable year beginning be-
fore January 1, 2021, wants to change to
a method of accounting for advance pay-
ments under proposed § 1.451-8(a) or (c);
(iii) wants to make one of the following
changes under § 1.451-3:
(A) a change to comply with the AFS
income inclusion rule in § 1.451-3(b)
under which the taxpayer determines the
amount of an item of gross income that
is treated as “taken into account as AFS
revenue” by making the AFS revenue
adjustments provided in § 1.451-3(b)(2)
(i) (including a change for specified cred-
it card fees under §§ 1.451-3(j)(2) and
1.1275-2(l));
(B) a change to comply with the AFS
income inclusion rule in § 1.451-3(b)
under which the taxpayer determines the
amount of the item of gross income that
is “taken into account as AFS revenue” by
making the AFS revenue adjustments pro-
vided in § 1.451-3(b)(2)(ii) (including a
change for specified credit card fees under
§§ 1.451-3(j)(2) and 1.1275-2(l)) (Alter-
native AFS Revenue Method);
(C) except as provided in section
16.12(2)(a)(iii)(E) of this section, a change
to apply the AFS cost offset method in
§ 1.451-3(c) to determine the amount of
an item of gross income from the sale of
inventory that is required to be included
in gross income under the AFS income in-
clusion rule in § 1.451-3(b);
(D) a change from applying a cost off-
set method, including the AFS cost offset
method in § 1.451-3(c), to not applying
a cost offset method to determine the
amount of an item of gross income from
the sale of inventory that is required to be
included in gross income under the AFS
income inclusion rule in § 1.451-3(b);
(E) a change to comply with § 1.451-
3(c)(5)(ii) as a result of a concurrent
cost-offset related inventory method
change, as defined in section 5.06 of Rev.
Proc. 2015-13 (or successor), or because
the taxpayer determines its cost of goods
in progress offset by reference to costs
that the taxpayer has impermissibly cap-
italized and/or allocated under its present
method of accounting for inventory;
(F) a change to comply with the trans-
action price allocation rules in § 1.451-
3(d); or
(G) a change to a method of accounting
described in § 1.451-3(h)(4) when a tax-
payer’s AFS covers mismatched report-
able periods; or
(iv) wants to make one of the following
changes in method of accounting for ad-
vance payments under § 1.451-8:
(A) a change to the full inclusion meth-
od provided in § 1.451-8(b);
(B) a change to the deferral method
provided in § 1.451-8(c);
(C) a change to the specified goods
§ 451(c) method described in § 1.451-8(f)
to treat payments that otherwise qualify
for the specified good exception, as de-
fined in § 1.451-8(a)(1)(ii)(H), as advance
payments and account for such payments
either under the full inclusion method pro-
vided in § 1.451-8(b) or under the deferral
method provided in § 1.451-8(c);
(D) except as provided in section
16.12(2)(a)(iv)(F) of this revenue proce-
dure, a change to apply the advance pay-
ment cost offset method in § 1.451-8(e)
to determine the amount of an advance
payment from the sale of inventory that
is required to be included in gross income
under either the full inclusion method in
§ 1.451-8(b) or the deferral method in
§ 1.451-8(c), as applicable;
(E) a change from applying a cost offset
method, including the advance payment
cost offset method in § 1.451-8(e), to not
applying a cost offset method to determine
the amount of an advance payment from
the sale of inventory that is required to be
included in gross income under either the
full inclusion method in § 1.451-8(b) or
the deferral method in § 1.451-8(c), as ap-
plicable;
(F) a change to comply with § 1.451-
8(e)(8)(ii) as a result of a concurrent
cost-offset related inventory method
change, as defined in section 5.06 of Rev.
Proc. 2015-13 (or successor), or because
the taxpayer presently determines its cost
of goods in progress offset by reference to
costs that the taxpayer has impermissibly
capitalized and/or allocated under its pres-
ent method of accounting for inventory;
(G) a change to a method of accounting
described in § 1.451-8(c)(7), which refers
to the methods described in § 1.451-3(h)
(4), when a taxpayer’s AFS covers mis-
matched reporting periods; or
(H) a change to comply with the pay-
ment allocation rules in § 1.451-8(c)(8).
(b) Taxpayer without an AFS. This
change applies to a taxpayer that does not
have an AFS that:
(i) for a taxable year beginning after
December 31, 2017, and before January 1,
2021, wants to change to a method of ac-
counting for advance payments under pro-
posed § 1.451-8(a) or (d); or
(ii) wants to make one of the following
changes in method of accounting for ad-
vance payments under § 1.451-8:
(A) a change to the full inclusion meth-
od provided in § 1.451-8(b);
(B) a change to the deferral method
provided in § 1.451-8(d)(3);
(C) except as provided in section
16.12(2)(b)(ii)(E) of this revenue proce-
dure, a change to apply the advance pay-
ment cost offset method in § 1.451-8(e)
to determine the amount of an advance
payment from the sale of inventory that
is required to be included in gross income
under either the full inclusion method in
§ 1.451-8(b) or the deferral method in
§ 1.451-8(d)(3), as applicable;
(D) a change from applying a cost offset
method, including the advance payment
cost offset method in § 1.451-8(e), to not
applying a cost offset method to determine
the amount of an advance payment from
the sale of inventory that is required to be
included in gross income under either the
full inclusion method in § 1.451-8(b) or
the deferral method in § 1.451-8(d)(3), as
applicable;
(E) a change to comply with § 1.451-
8(e)(8)(ii) as a result of a concurrent
cost-offset related inventory method
change, as defined in section 5.06 of
Rev. Proc. 2015-13 (or successor), or be-
cause the taxpayer determines its cost of
goods in progress offset by reference to
costs that the taxpayer has impermissi-
bly capitalized and/or allocated under its
present method of accounting for inven-
tory; or
(F) a change to a payment allocation
method described in § 1.451-8(d)(4)(ii).
(3) Inapplicability. Section 16.12(2) of
this revenue procedure does not apply to:

August 30, 2021 346 Bulletin No. 2021–35
(a) a change in method of accounting
to use a special method of accounting, as
defined in proposed § 1.451-3(c)(5) or
§ 1.451-3(a)(13), as applicable;
(b) a change in method of allocating
transaction price between item(s) of gross
income that are accounted for under pro-
posed § 1.451-3 or § 1.451-3, as appli-
cable, and items(s) of gross income that
are accounted for under a special meth-
od of accounting, as defined in proposed
§ 1.451-3(c)(5) or § 1.451-3(a)(14), as
applicable, including a change to comply
with § 1.451-3(d)(5);
(c) a change described in section
16.12(2)(a)(iii)(E), section 16.12(2)(a)
(iv)(F) or section 16.12(2)(b)(ii)(E) of
this revenue procedure, as applicable, if,
immediately after such change is made,
the taxpayer’s method of accounting for
cost offsets does not otherwise comply
with the AFS cost offset method under
§ 1.451-3(c) and/or the advance payment
cost offset method under § 1.451-8(e), as
applicable;
(d) a change described in section
16.12(2)(a)(iii)(E), section 16.12(2)(a)(iv)
(F) or section 16.12(2)(b)(ii)(E) of this
revenue procedure, including a change to
comply with § 1.451-3(c)(5)(ii) or § 1.451-
8(e)(8)(ii) because the taxpayer determines
its cost of goods in progress offset by ref-
erence to costs that the taxpayer has imper-
missibly capitalized and/or allocated under
its present method of accounting for in-
ventory, unless the taxpayer makes, for the
same year of change, the cost-offset related
inventory method change(s), as defined in
section 5.06 of Rev. Proc. 2015-13;
(e) a change to use the AFS cost offset
method if the taxpayer receives advance
payments from the sale of inventory and
does not also make a change to apply the
advance payment cost offset method, or a
change to use the advance payment cost
offset method if the taxpayer is required
to include gross income from the sale of
inventory under § 1.451-3 and does not
also make a change to apply the AFS cost
offset method;
(f) a change to use the deferral meth-
od in § 1.451-8(c) for allocable payments
described in § 1.451-8(c)(8)(iii)(A) (oth-
er than allocable payments described in
§ 1.451-8(c)(8)(iii)(B));
(g) a taxpayer that presently uses the
deferral method in § 1.451-8(c) for alloca-
ble payments described in § 1.451-8(c)(8)
(iii)(A) that wants to change its payment
allocation method to an allocation method
that is not described in § 1.451-8(c)(8)(iii)
(B);
(h) a change to use the deferral method
in § 1.451-8(d)(3) for allocable payments
described in § 1.451-8(d)(4)(i) other than
either allocable payments described in
§ 1.451-8(d)(4)(ii) or allocable payments
that are wholly attributable to two or more
items described in § 1.451-8(a)(1)(i)(C);
(i) a taxpayer that presently uses the
deferral method in § 1.451-8(d)(3) for
allocable payments described in § 1.451-
8(d)(4)(i) that wants to change its payment
allocation method to an allocation method
that is not described in § 1.451-8(d)(4)(ii);
(j) a taxpayer without an AFS that
wants to change its method of account-
ing for advance payments to the deferral
method under proposed § 1.451-8(d)(3) or
§ 1.451-8(d)(3) under which the taxpayer
determines the extent to which an advance
payment is earned by using the following:
(i) a statistical basis if adequate data are
available to the taxpayer; or (ii) the use of
any other basis that in the opinion of the
Commissioner results in a clear reflection
of income;
(k) a change in method of accounting
for specified fees, as defined in proposed
§ 1.451-3(i)(2) or § 1.451-3(j)(2), as ap-
plicable, other than specified credit card
fees;
(l) a change in method of accounting
that qualifies under another automatic
change provided in this revenue proce-
dure including, for example, a change
described in section 16.10 of this revenue
procedure;
(m) a change in method of accounting
for a liability, as defined in § 1.446-1(c)
(1)(ii)(B);
(n) a change in a taxpayer’s mis-
matched reporting periods method de-
scribed in § 1.451-3(h)(4) if the taxpay-
er uses the deferral method for advance
payments under § 1.451-8(c) and does
not also change to the same mismatched
reporting periods method for purposes of
accounting for advance payments pursu-
ant to § 1.451-8(c)(7) for the same year
of change; or, if applicable, a change in
a taxpayer’s mismatched reporting peri-
ods method pursuant to § 1.451-8(c)(7)
if the taxpayer uses the deferral method
for advance payments under § 1.451-8(c)
and does not also change to the same mis-
matched reporting periods method for
purposes of § 1.451-3(h)(4) for the same
year of change;
(o) a change in method of account-
ing for payments within the scope of the
specified good exception, as defined in
§ 1.451-8(a)(1)(ii), if the proposed meth-
od of accounting is to include such pay-
ments in gross income under § 1.451-3 in
one or more taxable years following the
taxable year of receipt; and
(p) a taxpayer that makes one or more
changes under section 16.12(2)(a)(iii) or
(iv) of this revenue procedure for a tax-
able year that begins before January 1,
2021, unless the taxpayer complies with
all the requirements in §§ 1.451-3(m)(3),
1.451-8(h)(2), and 1.1275-2(l)(2)(ii), as
applicable.
(4) Manner of making change.
(a) Short Form 3115. A taxpayer mak-
ing a change under this section 16.12 for
its early application year, as defined in
section 16.12(4)(c)(i) of this revenue pro-
cedure, or in the case of a taxpayer that
does not apply § 1.451-3 and/or § 1.451-8,
as applicable, for a taxable year beginning
before January 1, 2021, for its first tax-
able year beginning on or after January 1,
2021, is required to complete the follow-
ing information on Form 3115 (Rev. De-
cember 2018), and the requirement to file
the duplicate copy, under section 6.03(1)
(a) of Rev. Proc. 2015-13 is waived:
(i) The identification section of page 1
(above Part I);
(ii) The signature section at the bottom
of page 1;
(iii) Part I;
(iv) Part II, all lines except lines 13,
16c, and 19; and
(v) Part IV, all lines. For a taxpayer
making a change under this section 16.12,
the statement required for Line 26 of
Form 3115 should list the § 481(a) adjust-
ment(s).
(vi) Schedule B, all lines except line 1e.
(b) Special rules relating to § 481(a)
adjustment or cut-off basis.
(i) Section 481(a) adjustment period
for changes relating to specified credit
card fees. In the case of income from a
specified credit card fee, the § 481(a) ad-
justment period for any qualified change
in method of accounting described in this

Bulletin No. 2021–35 347 August 30, 2021
section 16.12(4)(b)(i) is six taxable years,
including the year of change and next five
taxable years. For purposes of the preced-
ing sentence, a qualified change in meth-
od of accounting is a change in method of
accounting for income from a specified
credit card fee to a method that is required
by § 451(b), as added by section 13221 of
Public Law 115-97, 131 Stat. 2054 (Dec.
22, 2017), commonly referred to as the
Tax Cuts and Jobs Act (TCJA), for such
income, but only for the taxpayer’s first
taxable year beginning after December
31, 2018. Section 16.12(4)(b)(ii) of this
revenue procedure may not be used for
a change relating to specified credit card
fees.
(ii) Cut-off basis or § 481(a) adjust-
ment.
(A) In general. Changes under this sec-
tion 16.12 with regard to taxpayers who
are members of consolidated groups gen-
erally are governed by this section 16.12,
rather than by § 1.1502-17(b)(2) (appli-
cable to changes in the application of the
timing rules of § 1.1502-13 in accounting
for intercompany transactions (within the
meaning of § 1.1502-13(b)(1)(i))). See
§ 1.1502-17(a) and (b)(1).
(B) Cut-off basis or § 481(a) adjust-
ment for changes made under section
16.12(2)(a)(i) of this revenue procedure
when taxpayer is also adopting the New
Standards. Except as otherwise provided
in this section 16.12(4)(b)(ii), a taxpay-
er making a change described in section
16.12(2)(a)(i) of this revenue procedure
may implement the change with either a
§ 481(a) adjustment as provided in sec-
tions 7.02 and 7.03 of Rev. Proc. 2015-13
or on a cut-off basis provided the year of
change is the same year that the taxpayer
adopts the New Standards, as defined in
section 16.11 of this revenue procedure.
A taxpayer described in section 16.12(4)
(c)(i)(B) or (C) of this revenue procedure
that uses the streamlined procedures pro-
vided in section 16.12(4)(c) of this reve-
nue procedure may not make a change in
method of accounting on a cut-off basis.
If the taxpayer makes a change described
in section 16.12(2)(a)(i) of this revenue
procedure for the taxable year in which it
adopts the New Standards and chooses to
implement such change on a cut-off basis,
(1) the change applies to contracts entered
into on or after the beginning of the year
of change, (2) all changes made under
section 16.12(2)(a)(i) of this revenue pro-
cedure must be implemented using a cut-
off basis, and (3) a § 481(a) adjustment is
neither permitted nor required.
(C) Cut-off basis or § 481(a) adjust-
ment for certain changes under proposed
§ 1.451-8(c). Except as otherwise provid-
ed in this section 16.12(4)(b)(ii), a taxpay-
er making a change described in section
16.12(2)(a)(ii) of this revenue procedure
may implement the change with either a
§ 481(a) adjustment as provided in sec-
tions 7.02 and 7.03 of Rev. Proc. 2015-13
or on a cut-off basis. A taxpayer described
in section 16.12(4)(c)(i)(B) of this revenue
procedure that uses the streamlined proce-
dures provided in section 16.12(4)(c) of
this revenue procedure may not make a
change in method of accounting on a cut-
off basis. If the taxpayer implements the
change on a cut-off basis, (1) the change
applies to contracts entered into on or after
the beginning of the year of change, (2)
all changes made under section 16.12(2)
(a)(ii) of this revenue procedure to com-
ply with proposed § 1.451-8(c) must be
implemented using a cut-off basis, and (3)
a § 481(a) adjustment is neither permitted
nor required.
(D) Computing section 481(a) adjust-
ments when the year of change is a year in
which the taxpayer implements a change
in accounting principle with a retained
earnings adjustment. If the year of change
is a year in which the taxpayer implements
a change in accounting principle for AFS
purposes, including a change in the meth-
od of applying an accounting principle
for AFS purposes, and the change in ac-
counting principle is implemented with a
retained earnings adjustment that is taken
into account during the year of change, the
taxpayer is required to treat such adjust-
ment as being taken into account in the
taxable year prior to the year of change for
purposes of computing the section 481(a)
adjustment. An AFS change to adopt the
New Standards, as defined in section
16.11(1) of this revenue procedure, is an
example of a change in accounting prin-
ciple.
(iii) Netting of the section § 481(a) ad-
justment.
(A) Required netting for changes made
under § 1.451-3 related to inventory sales.
A taxpayer that makes a change described
in section 16.12(2)(a)(iii)(C) or (D) of
this revenue procedure and one or more
changes described in section 16.12(2)(a)
(iii)(A), (B), and/or (G) of this revenue
procedure for gross income from invento-
ry sales for the same year of change must
provide a single net § 481(a) adjustment
for all such changes. The § 481(a) adjust-
ment period described in section 7.03 of
Rev. Proc. 2015-13 is determined based
on the net § 481(a) adjustment.
(B) Required netting for changes made
under §1.451-8 related to inventory sales
for taxpayers with an AFS. A taxpayer
that makes a change described in section
16.12(2)(a)(iv)(D) or (E) of this revenue
procedure and one or more changes de-
scribed in section 16.12(2)(a)(iv)(A), (B),
(C), and/or (G) of this revenue procedure
for advance payments from the sale of in-
ventory for the same year of change must
provide a single net § 481(a) adjustment
for all such changes. The § 481(a) adjust-
ment period described in section 7.03 of
Rev. Proc. 2015-13 is determined based
on the net § 481(a) adjustment.
(C) Required netting for changes made
under § 1.451-8 related to inventory sales
for taxpayers without an AFS. A taxpayer
that makes a change described in section
16.12(2)(b)(ii)(C) or (D) of this revenue
procedure and one or more changes in
method of accounting described in sec-
tion 16.12(2)(b)(ii)(A) or (B) of this rev-
enue procedure for advance payments
from the sale of inventory for the same
year of change must provide a single net
§ 481(a) adjustment for all such changes.
The § 481(a) adjustment period described
in section 7.03 of Rev. Proc. 2015-13 is
determined based on the net § 481(a) ad-
justment.
(D) Required netting for non-automat-
ic method changes under § 1.451-3 and/
or § 1.451-8 related to inventory sales.
The rules in section 16.12(4)(b)(iii) of this
revenue procedure generally will apply to
a non-automatic change under § 1.451-
3 and/or § 1.451-8 for which the netting
rules of section 16.12(4)(b)(iii) of this
revenue procedure would otherwise apply
if the taxpayer were eligible to make the
change under section 16.12 of this reve-
nue procedure.
(iv) Special § 481(a) adjustment rules
for cost offset method change(s) under
§ 1.451-3 and/or § 1.451-8 made with

August 30, 2021 348 Bulletin No. 2021–35
corresponding cost-offset related invento-
ry method change(s).
(A) Required netting rule for changes
described in section 16.12(2)(a)(iii)(E). A
taxpayer that makes more than one meth-
od change under section 16.12(2)(a)(iii)
(E) of this revenue procedure for the same
year of change must provide a single net
§ 481(a) adjustment for all such changes.
The § 481(a) adjustment period for this
net § 481(a) adjustment is determined by
applying the rules in section 16.12(4)(b)
(iv)(D) of this revenue procedure.
(B) Required netting rule for changes
described in section 16.12(2)(a)(iv)(F). A
taxpayer that makes more than one meth-
od change under section 16.12(2)(a)(iv)
(F) of this revenue procedure for the same
year of change must provide a single net
§ 481(a) adjustment for all such changes.
The § 481(a) adjustment period for this
net § 481(a) adjustment is determined by
applying the rules in section 16.12(4)(b)
(iv)(D) of this revenue procedure.
(C) Required netting rule for changes
described in section 16.12(2)(b)(ii)(E). A
taxpayer that makes more than one meth-
od change under section 16.12(2)(b)(ii)
(E) of this revenue procedure for the same
year of change must provide a single net
§ 481(a) adjustment for all such changes.
The § 481(a) adjustment period for this
net § 481(a) adjustment is determined by
applying the rules in section 16.12(4)(b)
(iv)(D) of this revenue procedure.
(D) Special § 481(a) adjustment
spread period. For purposes of sections
7.02 and 7.03 of Rev. Proc. 2015-13, the
§ 481(a) adjustment spread period for a
cost offset change described in section
16.12(2)(a)(iii)(E), section 16.12(2)(a)(iv)
(F), or section 16.12(2)(b)(ii)(E) of this
revenue procedure, whether the § 481(a)
adjustment is positive or negative, is the
same as the § 481(a) spread period for the
corresponding cost-offset related inven-
tory method change, as defined in section
5.06 of Rev. Proc. 2015-13. The rules of
section 7.02 and 7.03 of Rev. Proc. 2015-
13, including the short period rule and
the accelerated adjustment period rules,
apply to determine the spread period for
the § 481(a) adjustment for the cost-offset
related inventory method change, which is
used to determine the § 481(a) adjustment
spread period for a positive or negative
§ 481(a) adjustment for the correspond-
ing cost offset change described in section
16.12(2)(a)(iii)(E), section 16.12(2)(a)(iv)
(F), or section 16.12(2)(b)(ii)(E) of this
revenue procedure. If the taxpayer must
net the § 481(a) adjustments for cost off-
set changes under section 16.12(4)(b)(iv)
(A), (B) or (C) of this revenue procedure,
as applicable, the spread period for any
such net § 481(a) adjustment is the same
as the § 481(a) spread period for the cor-
responding cost-offset related inventory
method changes, determined by netting
the § 481(a) adjustments from such cor-
responding cost-offset related inventory
method changes. The requirement that the
taxpayer net the § 481(a) adjustments for
such corresponding cost-offset related in-
ventory method changes is solely for pur-
poses of determining the spread period for
the net § 481(a) adjustment determined
under section 16.12(4)(b)(iv)(A), (B), or
(C), as applicable. This section 16.12(4)
(b)(iv)(D) does not apply if, after apply-
ing the netting rules in section 16.12(4)
(b)(iv)(A), (B), or (C), as applicable, the
§ 481(a) adjustment for the corresponding
cost offset change(s) is zero. For example,
if the taxpayer makes a cost-offset related
inventory method change that is imple-
mented on a cut-off basis and the § 481(a)
adjustment for the taxpayer’s correspond-
ing change described in section 16.12(2)
(a)(iii)(E), section 16.12(2)(a)(iv)(F), or
section 16.12(2)(b)(ii)(E) of this revenue
procedure is zero as a result, this section
16.12(4)(b)(iv)(D) does not apply.
(v) Examples. For each of the follow-
ing examples, the taxpayer uses an ac-
crual method of accounting, is on a cal-
endar year, and has an AFS, as defined in
§ 1.451-3(a)(5). The taxpayer implements
§ 1.451-3 and, if applicable, § 1.451-8, be-
ginning with its 2021 taxable year.
(A) Example 1. Netting rules. A is engaged in a
single trade or business of selling and servicing com-
puters. A is not under examination within the mean-
ing of section 3.18 of Rev. Proc. 2015-13. A does
not receive advance payments. For 2021, A makes
multiple changes in method of accounting to apply
§ 1.451-3. Specifically, A changes its method of ac-
counting for gross income from the sale of computers
to apply the AFS income inclusion rule pursuant to
section 16.12(2)(a)(iii)(A) of this revenue procedure
and to apply the AFS cost offset method pursuant to
section 16.12(2)(a)(iii)(C) of this revenue procedure.
A also changes its method of accounting for gross
income from computer services to apply the AFS
income inclusion rule pursuant to section 16.12(2)
(a)(iii)(A) of this revenue procedure. Since A made
a change described in section 16.12(2)(a)(iii)(C) of
this revenue procedure and a change described in
section 16.12(2)(a)(iii)(A) of this revenue procedure
for gross income from computer sales for the same
year of change, A must net the § 481(a) adjustments
resulting from these changes in the manner required
by section 16.12(4)(b)(iii)(A) of this revenue pro-
cedure. The § 481(a) adjustment resulting from A’s
change in method of accounting for income from
computer services under section 16.12(2)(a)(iii)
(A) of this revenue procedure is not netted with the
§ 481(a) adjustments resulting from the computer
sales method changes.
(B) Example 2. Special section 481(a) adjust-
ment period under section 16.12(4)(b)(iv) of this
revenue procedure. The facts are the same as in Ex-
ample 1. For 2022, A changes its inventory method
under section 12.01 of this revenue procedure and,
as a result, also changes its cost offset method to
comply with § 1.451-3(c)(5)(ii) pursuant to section
16.12(2)(a)(iii)(E) of this revenue procedure. The
cost-offset related inventory method change under
section 12.01 of this revenue procedure results in a
positive § 481(a) adjustment that is spread over four
taxable years under section 7.01 and 7.03 of Rev.
Proc. 2015-13. The cost offset method change under
section 16.12(2)(a)(iii)(E) of this revenue procedure
results in a negative § 481(a) adjustment. Section
16.12(4)(b)(iv)(D) of this revenue procedure re-
quires A to spread the negative § 481(a) adjustment
over four taxable years consistent with the § 481(a)
adjustment period for the concurrent cost-offset re-
lated inventory method change under section 12.01
of this revenue procedure.
(c) Streamlined method change proce-
dures for certain taxpayers.
(i) Applicability. The procedures de-
scribed in this section 16.12(4)(c) may be
used by a taxpayer to make a change in
method of accounting described in section
16.12(2)(a)(iii)(A), (B), (F), and/or (G),
section 16.12(2)(a)(iv)(A), (B), (C), (G),
and/or (H), or section 16.12(2)(b)(ii)(A),
(B), and/or (F) of this revenue procedure
for the taxpayer’s early application year,
provided the taxpayer meets the require-
ments in this section 16.12(4)(c). For
purposes of section 16.12, a taxpayer’s
“early application year” means the taxable
year beginning before January 1, 2021, in
which a taxpayer first applies § 1.451-3
and/or § 1.451-8, as applicable. In addi-
tion, in the case of a taxpayer that does
not apply § 1.451-3 and/or § 1.451-8 for
a taxable year beginning before January
1, 2021, the procedures described in this
section 16.12(4)(c) may be used to make
a change in method of accounting de-
scribed in section 16.12(2)(a)(iii)(A), (B),
(F), and/or (G), section 16.12(2)(a)(iv)
(A), (B), (C), (G), and/or (H), or section
16.12(2)(b)(ii)(A), (B), and/or (F) of this
revenue procedure, for the taxpayer’s first

Bulletin No. 2021–35 349 August 30, 2021
taxable year beginning on or after January
1, 2021, provided the taxpayer meets the
requirements in this section 16.12(4)(c).
A taxpayer may not use the streamlined
procedures for any change in method of
accounting described in section 16.12(2)
of this revenue procedure if the taxpayer
is also making a change in method of ac-
counting described in sections 16.12(2)(a)
(iii)(C), (D), and/or (E), sections 16.12(2)
(a)(iv)(D), (E), and/or (F), or sections
16.12(2)(b)(ii)(C), (D), and/or (E) of this
revenue procedure for the same year of
change. In addition, a taxpayer may not
use the streamlined procedures if one or
more of the inapplicability rules provided
in section 16.12(3) of this revenue proce-
dure applies to the change. A taxpayer that
is otherwise permitted to use the stream-
lined method change procedures in this
section 16.12(4)(c) may use these stream-
lined procedures if the taxpayer meets one
of the following requirements:
(A) the taxpayer, other than a tax shel-
ter, as defined in § 448(d)(3), meets the
§ 448(c) gross receipts test (a “small busi-
ness taxpayer”) for the year of change. The
taxpayer meets the § 448(c) gross receipts
test if the taxpayer has average annual
gross receipts for the three prior taxable
years of $25,000,000 or less (adjusted for
inflation). See § 448(c)(4). For a taxable
year beginning in 2019, 2020, or 2021, the
inflation-adjusted amount is $26,000,000.
See Rev. Proc. 2018-57, 2018-49 I.R.B.
827, Rev. Proc. 2019-44, 2019-47 I.R.B.
1093, or Rev. Proc. 2020-45, 2020-46
I.R.B. 1016 as applicable;
(B) the taxpayer is making one or more
changes described in section 16.12(2)(a)
(iii)(A), (B), (F), and/or (G) of this rev-
enue procedure, and the § 481(a) adjust-
ment required by each of the changes is
zero. A taxpayer that meets this require-
ment is permitted to make the changes de-
scribed in section 16.12(2)(a)(iii)(A), (B),
(F), and/or (G) of this revenue procedure
under the streamlined method change pro-
cedures. Notwithstanding any provisions
of this section 16.12, a taxpayer making
more than one change in method of ac-
counting under section 16.12(2)(a)(iii)
(A), (B), (F), and/or (G) of this revenue
procedure for the same year of change is
not permitted to net the § 481(a) adjust-
ments to determine if the taxpayer meets
the requirements to use the streamlined
method change procedures. See section
16.12(7)(a) of this revenue procedure for
more information on making concurrent
changes; or
(C) the taxpayer is making one or more
changes described in section 16.12(2)(a)
(iv)(A), (B), (C), (G), and/or (H), or sec-
tion 16.12(2)(b)(ii)(A), (B), and/or (F) of
this revenue procedure, and the § 481(a)
adjustment required by each of the chang-
es is zero. A taxpayer that meets this re-
quirement is permitted to make the chang-
es described in section 16.12(2)(a)(iv)
(A), (B), (C), (G), and/or (H), or section
16.12(2)(b)(ii)(A), (B), and/or (F) of this
revenue procedure under the streamlined
method change procedures. Notwithstand-
ing any provisions of this section 16.12,
a taxpayer making more than one change
in method of accounting under section
16.12(2) for the same year of change is not
permitted to net the § 481(a) adjustments
to determine if the taxpayer meets the re-
quirements to use the streamlined method
change procedures. See section 16.12(7)
(a) of this revenue procedure for more in-
formation on making concurrent changes.
(ii) No Form 3115 required. In ac-
cordance with § 1.446-1(e)(3)(ii), the
requirement of § 1.446-1(e)(3)(i) to file
a Form 3115 is waived for a taxpayer
making a change in method of accounting
under this section 16.12 using the stream-
lined method change procedures. Thus,
a taxpayer using the streamlined method
change procedures is not required to file a
Form 3115 and is not required to attach a
separate statement when making a change
under this section 16.12.
(d) Certain cost offset changes made
on an amended return.
(i) In general. Notwithstanding section
6.03(1)(a) of Rev. Proc. 2015-13, a tax-
payer making a change described in sec-
tion 16.12(2)(a)(iii)(E), section 16.12(2)
(a)(iv)(F), or section 16.12(2)(b)(ii)(E)
of this revenue procedure, as applicable,
which corresponds to a cost-offset related
inventory method change filed under the
non-automatic method change procedures
of Rev. Proc. 2015-13 for the same year
of change may make the corresponding
cost offset change described in section
16.12(2)(a)(iii)(E), section 16.12(2)(a)
(iv)(F), or section 16.12(2)(b)(ii)(E) on
an amended Federal income tax return for
the cost offset year of change (as defined
in section 16.12(4)(d)(ii) of this revenue
procedure) provided:
(A) the taxpayer received consent for
the cost-offset related inventory meth-
od change filed under the non-automatic
method change procedures for the year
of change after the time the taxpayer was
required to file the original Form 3115
for the corresponding cost offset change
under section 16.12(2)(a)(iii)(E), section
16.12(2)(a)(iv)(F), or section 16.12(2)(b)
(ii)(E) of this revenue procedure, as appli-
cable, in accordance with section 6.03(1)
(a)(i)(A) of Rev. Proc. 2015-13 for the
cost offset year of change;
(B) the taxpayer timely signs and re-
turns the Consent Agreement for the
non-automatic corresponding cost-offset
related inventory method change in accor-
dance with section 11.03(2)(c)(i) of Rev.
Proc. 2015-13, and timely implements
such non-automatic change in accordance
with section 11.03(2)(c)(ii)(A) or (B) of
Rev. Proc. 2015-13;
(C) the taxpayer implements the cor-
responding cost offset method change
described in section 16.12(2)(a)(iii)(E),
section 16.12(2)(a)(iv)(F), or section
16.12(2)(b)(ii)(E) of this revenue proce-
dure, as applicable, on the same amended
Federal income tax return that the tax-
payer implements the cost-offset related
inventory method change described in
section 16.12(4)(d)(i)(A) of this revenue
procedure; and
(D) the taxpayer’s amended Federal in-
come tax return for the year of change in-
cludes any adjustments to taxable income
or tax liability resulting from the change(s)
in method of accounting for the cost-offset
related inventory method change(s) speci-
fied in the letter ruling and the correspond-
ing cost offset method change(s).
(ii) Cost offset year of change. For pur-
poses of this section 16.12(4)(d), a taxpay-
er’s cost offset year of change is the same
year of change that the taxpayer received
consent under the non-automatic change
procedures for the cost-offset inventory
related change.
(iii) Filing requirements. Notwith-
standing section 6.03(1)(a) of Rev. Proc.
2015-13, a taxpayer making a change
under section 16.12(2)(a)(iii)(E), section
16.12(2)(a)(iv)(F), or section 16.12(2)(b)
(ii)(E) of this revenue procedure in accor-
dance with section 16.12(4)(d) of this rev-

August 30, 2021 350 Bulletin No. 2021–35
enue procedure must attach the original
Form 3115 to the taxpayer’s timely filed
amended Federal income tax return for the
cost offset year of change and must file the
required copy (with signature) of the Form
3115 with the IRS in Ogden, UT, no later
than the date the taxpayer timely files the
amended Federal income tax return that
implements the cost-offset related inven-
tory method described in section 16.12(4)
(d)(i)(A) of this revenue procedure, as
provided in section 11.03(2)(c)(ii)(A) or
(B) of Rev. Proc. 2015-13.
(5) Eligibility rule inapplicable.
(a) Eligibility rule temporarily inappli-
cable for changes under sections 16.12(2)
(a)(i), (2)(a)(ii), or (2)(b)(i) of this revenue
procedure. Except as otherwise provid-
ed in section 16.12(5)(c) of this revenue
procedure, the eligibility rule in section
5.01(1)(f) of Rev. Proc. 2015-13 does not
apply to a change under section 16.12(2)
(a)(i), (a)(ii) or (2)(b)(i) of this revenue
procedure for a taxpayer’s first, second or
third taxable year beginning after Decem-
ber 31, 2017, provided the taxable year
begins before January 1, 2021.
(b) Eligibility rule temporarily inappli-
cable for changes under sections 16.12(2)
(a)(iii), (2)(a)(iv), or (2)(b)(ii) of this rev-
enue procedure. Except as otherwise pro-
vided in section 16.12(5)(c) of this reve-
nue procedure, for a taxpayer that applies
§ 1.451-3 and/or § 1.451-8, as applicable,
for a taxable year beginning before Janu-
ary 1, 2021, the eligibility rule in section
5.01(1)(f) of Rev. Proc. 2015-13 does not
apply to a change under section 16.12(2)
(a)(iii), (2)(a)(iv), or (2)(b)(ii) of this
revenue procedure for a taxpayer’s ear-
ly application year, as defined in section
16.12(4)(c)(i) of this revenue procedure.
Except as otherwise provided in this sec-
tion 16.12(5), for a taxpayer that does not
apply § 1.451-3 and/or § 1.451-8 for a
taxable year beginning before January 1,
2021, the eligibility rule in section 5.01(1)
(f) of Rev. Proc. 2015-13 does not apply
to a change under section 16.12(2)(a)(iii),
(2)(a)(iv), or (2)(b)(ii) of this revenue pro-
cedure for a taxpayer’s first taxable year
beginning on or after January 1, 2021.
(c) Changes related to specified cred-
it card fees. The eligibility rule in section
5.01(1)(f) of Rev. Proc. 2015-13 does not
apply to a specified credit card fee change
made under section 16.12(2)(a)(i) of this
revenue procedure for a taxpayer’s first
or second taxable year beginning after
December 31, 2018, provided the taxable
year begins before January 1, 2021. In ad-
dition, for a taxpayer that applies § 1.451-
3 and § 1.1275-2(l) for specified credit
card fees for a taxable year beginning be-
fore January 1, 2021, the eligibility rule
in section 5.01(1)(f) of Rev. Proc. 2015-
13 does not apply to a specified credit
card fee change under section 16.12(2)
(a)(iii) of this revenue procedure for the
taxpayer’s early application year, as de-
fined in section 16.12(4)(c)(i) of this rev-
enue procedure. For a taxpayer that does
not apply § 1.451-3 and § 1.1275-2(l) for
specified credit card fees for a taxable year
beginning before January 1, 2021, the el-
igibility rule in section 5.01(1)(f) of Rev.
Proc. 2015-13 does not apply to a speci-
fied credit card fee change under section
16.12(2)(a)(iii) of this revenue procedure
for the taxpayer’s first taxable year begin-
ning on or after January 1, 2021.
(d) Certain cost offset method chang-
es. The eligibility rule in section 5.01(1)
(f) of Rev. Proc. 2015-13 does not apply
to a change under section 16.12(2)(a)(iii)
(E), section 16.12(2)(a)(iv)(F) or section
16.12(2)(b)(ii)(E) of this revenue procedure.
(6) Audit protection.
(a) Streamlined procedures. A taxpayer
making a change in method of accounting
under this section 16.12 using the stream-
lined method change procedures provided
in section 16.12(4)(c) of this revenue pro-
cedure does not receive audit protection
under section 8.01 of Rev. Proc. 2015-13.
(b) Taxpayers under examination.
(i) In general – certain audit protection
exception temporarily inapplicable. Except
as otherwise provided in section 16.12(6)
(b)(ii) and (iii) of this revenue procedure,
for a taxpayer’s first, second or third tax-
able year beginning after December 31,
2017, and before January 1, 2021, section
8.02(1) of Rev. Proc. 2015-13 does not ap-
ply to a change in method of accounting
made under section 16.12(2)(a)(i), (2)(a)
(ii) or (2)(b)(i) of this revenue procedure.
In addition, except as otherwise provided in
section 16.12(6)(b)(ii) and (iii) of this rev-
enue procedure, for a taxpayer that applies
§ 1.451-3 and/or § 1.451-8, as applicable,
for a taxable year beginning before January
1, 2021, section 8.02(1) of Rev. Proc. 2015-
13, does not apply to a change in method of
accounting made under section 16.12(2)(a)
(iii), (2)(a)(iv) or (2)(b)(ii) of this revenue
procedure for a taxpayer’s early application
year, as defined in section 16.12(4)(c)(i) of
this revenue procedure. Except as otherwise
provided in section 16.12(6)(b)(ii) and (iii)
of this revenue procedure, for a taxpayer
that does not apply § 1.451-3 or § 1.451-8
for a taxable year beginning before January
1, 2021, section 8.02(1) of Rev. Proc. 2015-
13 does not apply to a change in method of
accounting made under section 16.12(2)(a)
(iii), (2)(a)(iv), or (2)(b)(ii) of this revenue
procedure for a taxpayer’s first taxable year
beginning on or after January 1, 2021. In
addition, except as otherwise provided in
section 16.12(4) of this revenue procedure,
section 8.02(1) of Rev. Proc. 2015-13 con-
tinues to apply for purposes of determining
the § 481(a) adjustment period provided in
section 7.03(3)(b) of Rev. Proc. 2015-13.
(ii) Changes related to specified credit
card fees. Except as otherwise provided
in section 16.12(6)(b)(iii) of this revenue
procedure, for a taxpayer’s first or second
taxable year beginning after December 31,
2018, and before January 1, 2021, section
8.02(1) of Rev. Proc. 2015-13 does not ap-
ply to a change under section 16.12(2)(a)
(i) of this revenue procedure for specified
credit card fees. In addition, except as oth-
erwise provided in section 16.12(6)(b)(iii)
of this revenue procedure, for a taxpayer
that applies § 1.451-3 and § 1.1275-2(l) to
specified credit card fees for a taxable year
beginning before January 1, 2021, section
8.02(1) of Rev. Proc. 2015-13 does not ap-
ply to a change for specified credit card
fees under section 16.12(2)(a)(iii) of this
revenue procedure for the taxpayer’s ear-
ly application year, as defined in section
16.12(4)(c)(i) of this revenue procedure.
Except as otherwise provided in section
16.12(6)(b)(iii) of this revenue procedure,
for a taxpayer that does not apply § 1.451-
3 and § 1.1275-2(l) to specified credit card
fees for a taxable year beginning before
January 1, 2021, section 8.02(1) of Rev.
Proc. 2015-13 does not apply to a change
for specified credit card fees under section
16.12(2)(a)(iii) of this revenue procedure
for the taxpayer’s first taxable year be-
ginning on or after January 1, 2021. In
addition, except as otherwise provided
in section 16.12(4)(b)(i) of this revenue
procedure, section 8.02(1) of Rev. Proc.
2015-13 continues to apply for purposes
of determining the § 481(a) adjustment
period provided in section 7.03(3)(b) of
Rev. Proc. 2015-13.

Bulletin No. 2021–35 351 August 30, 2021
(iii) Exception. Sections 16.12(6)(b)(i)
and (ii) of this revenue procedure do not
apply to a taxpayer that uses the stream-
lined method change procedures under sec-
tion 16.12(4)(c) of this revenue procedure.
(iv) No audit protection for certain
cost offset changes. For a taxpayer under
examination that makes a change in meth-
od of accounting under section 16.12(2)
(a)(iii)(E), section 16.12(a)(iv)(F), or
section 16.12(2)(b)(ii)(E) of this revenue
procedure, the taxpayer does not receive
audit protection under section 8.01 of
Rev. Proc. 2015-13 for such change if, at
the time of filing, the taxpayer’s method
of accounting for the item being changed
by the corresponding cost-offset related
inventory method change, as defined in
section 5.06 of Rev. Proc. 2015-13 (or
successor), is an issue under consider-
ation for the taxable year under examina-
tion. However, if the taxpayer ultimately
receives audit protection for the corre-
sponding cost-offset related inventory
method change under section 8.02(1)(f)
of Rev. Proc. 2015-13, then the preceding
sentence does not apply and the normal
audit protection rules in section 8 of Rev.
Proc. 2015-13 apply.
(7) Concurrent automatic changes.
(a) Changes under this section 16.12.
A taxpayer that wants to make one or
more concurrent changes in method of
accounting under this section 16.12 may
file a single Form 3115 that includes all
of the changes. Except as otherwise re-
quired by section 16.12(4)(b)(iii) of this
revenue procedure, the taxpayer may not
net the § 481(a) adjustment from one
change with the § 481(a) adjustment from
another change, and must separately state
the § 481(a) adjustment for each change.
If a taxpayer makes a concurrent change
in method of accounting to allocate trans-
action price and/or payments under sec-
tion 16.12(2)(a)(i), (iii), or (iv) or section
16.12(2)(b)(ii) of this revenue procedure,
the taxpayer is required to make the al-
location change before any other change
described in section 16.12(2)(a)(i), (iii), or
(iv) or section 16.12(2)(b)(ii) of this reve-
nue procedure, as applicable.
(b) Concurrent cost offset change
and cost-offset related inventory method
change. See section 6.03(1)(b) of Rev.
Proc. 2015-13 for a taxpayer that makes
one or more change(s) under section
16.12(2)(a)(iii)(E), (a)(iv)(F), or (b)(ii)
(E) of this revenue procedure and one or
more cost-offset related inventory meth-
od change(s), as defined in section 5.06
of Rev. Proc. 2015-13, under this revenue
procedure in the same year of change.
Additionally, such taxpayer is required
to implement the cost-offset related in-
ventory method change(s) under this rev-
enue procedure before it implements the
corresponding change(s) under section
16.12(2)(a)(iii)(E), (a)(iv)(F), or (b)(ii)(E)
of this revenue procedure, as applicable.
(8) Limited applicability. Notwith-
standing the inapplicability rules in sec-
tion 16.12(3) of this revenue procedure,
the changes described in section 16.12(2)
(a)(iii)(A) and (B) of this revenue proce-
dure are applicable only for taxable years
beginning before January 1, 2021, and for
a taxpayer’s first, second or third taxable
year beginning after December 31, 2020.
(9) Designated automatic accounting
method change number. See the follow-
ing tables for the designated automatic
method change number (DCN) for the
changes in method of accounting under
this section 16.12.
(a) Changes under proposed §§ 1.451-
3 and 1.451-8.
Description of change
SECTION # in
REV. PROC. 2019-43
DESIGNATED CHANGE
NUMBER (DCN)
Timing of Income Recognition - Taxpayer with an AFS
Changes to proposed § 1.451-316.12(2)(a)(i)242
Changes to account for advance payments under proposed
§ 1.451-8(a) or (c)
16.12(2)(a)(ii)242
Timing of Income Recognition - Taxpayer without an AFS
Changes to account for advance payments under proposed
§ 1.451-8(a) or (d)
16.12(2)(b)(i)242
(b) Changes under the final regulations of §§ 1.451-3 and 1.451-8.
Description of change
SECTION # in
REV. PROC. 2019-43
DESIGNATED CHANGE
NUMBER (DCN)
Changes related to § 1.451-3 other than cost offset16.12(2)(a)(iii)(A), (B), (F), (G)250
Changes related to cost offset under § 1.451-3, except
concurrent cost-offset related inventory method changes
16.12(2)(a)(iii)(C), (D)251
Changes related to the deferral method for advance
payments - § 1.451-8 other than cost offset
16.12(2)(a)(iv)(A)-(C), (G) and (H),
(2)(b)(ii)(A), (B) or (F)
252
Changes related to cost offset under § 1.451-8, except
concurrent cost-offset related inventory method changes
16.12(2)(a)(iv)(D), (E),
16.12(2)(b)(ii)(C) or (D)
253
Changes related to full-inclusion method under § 1.451-8(b)16.12(2)(a)(iv)(A), (b)(ii)(A)254
Changes related to cost offsets resulting from concurrent
cost-offset related inventory changes
16.12(2)(a)(iii)(E), 16.12(a)(iv)(F),
and 16.12(b)(ii)(E)
255

August 30, 2021 352 Bulletin No. 2021–35
(10) Contact information. For further
information regarding a change under this
section, contact Sharon Horn at (202) 317-
7003 (not a toll-free number). For further
information regarding a change under this
section for OID and specified fees (in-
cluding specified credit card fees), contact
Deepan Patel at (202) 317-3423 (not a
toll-free number).
.10 Section 20 of Rev. Proc. 2019-43 is
modified to add new section 20.13 to read
as follows:
.13 Timing of incurring inventory costs.
(1) Applicability. This change applies
to an accrual method taxpayer that wants
to change its method of accounting for one
or more inventory costs to treat such costs
as incurred in accordance with § 1.461-
1(a)(2) and § 1.461-4(d)(4) if:
(a) under the taxpayer’s present meth-
od of accounting, the taxpayer takes one
or more inventory costs into account in a
taxable year prior to the taxable year in
which such costs are incurred under § 461
and the regulations thereunder, and recov-
ers such costs in a taxable year prior to the
taxable year in which ownership of inven-
tory is transferred to the customer to offset
income inclusions under § 451(b) and/or
§ 451(c);
(b) in the case of a taxpayer with an
applicable financial statement (AFS), as
defined in section 16.12(1)(b) of this reve-
nue procedure, the taxpayer makes, for the
same year of change, a change in method
of accounting for income from the sale of
inventory under section 16.12(2)(a)(iii) of
this revenue procedure and, to the extent
the taxpayer receives advance payments
for the sale of inventory, section 16.12(2)
(a)(iv) of this revenue procedure, or in the
case of a taxpayer that does not have an
AFS, the taxpayer makes, for the same
year of change, a change in method of ac-
counting for advance payments from the
sale of inventory under section 16.12(2)
(b)(ii) of this revenue procedure;
(c) the taxpayer makes, for the same
year of change, a change in method of ac-
counting for such inventory costs under
section 12.01, 12.02, 22.05, 22.11, 22.18,
or 22.19 of this revenue procedure, as ap-
plicable; and
(d) the taxpayer makes the change for
its inventory costs under this section 20.13
for its early application year, as defined
in section 16.12(4)(c)(i) of this revenue
procedure, or if a taxpayer does not apply
§ 1.451-3 and/or § 1.451-8, as applicable,
for a taxable year beginning before Jan-
uary 1, 2021, for the taxpayer’s first tax-
able year beginning on or after January 1,
2021.
(2) Inapplicability. Section 20.13 of
this revenue procedure does not apply
to a taxpayer that is not on a permissible
method of accounting for its inventory as
required under § 471 and § 263A, as ap-
plicable, unless the taxpayer changes to a
permissible method of accounting under
§ 471 or § 263A, as applicable, for the
same year of change.
(3) Eligibility rule inapplicable. The
eligibility rule in section 5.01(1)(f) of Rev.
Proc. 2015-13 does not apply to a change
described in section 20.13(1) of this reve-
nue procedure.
(4) No ruling on method used. The
consent granted under section 9 of Rev.
Proc. 2015-13 for a change made under
this section 20.13 is not a determination
by the Commissioner that the proposed
method of accounting is a permissible
method of accounting under § 1.461-1(a)
(2) and § 1.461-4(d)(4), and does not cre-
ate a presumption that the proposed meth-
od of accounting is a permissible method
of accounting under a provision of the
Code. The director will ascertain whether
the proposed method is permissible and
in accordance with § 1.461-1(a)(2) and
§ 1.461-4(d)(4).
(5) Concurrent automatic change.
A taxpayer that is making a change de-
scribed in section 20.13(1) of this reve-
nue procedure and one or more changes
described in sections 12.01, 12.02, 22.05,
22.11, 22.18, or 22.19 of this revenue pro-
cedure for the same year of change must
timely file a single Form 3115 for all such
changes and must enter the designated au-
tomatic accounting change numbers for
all such changes on the appropriate line
of Form 3115. If the taxpayer is making
a change described in section 20.13(1) of
this revenue procedure for one or more in-
ventory costs, and a change described in
section 12.01, 12.02, 22.05, 22.11, 22.18,
or 22.19 of this revenue procedure for the
same year of change, the taxpayer may
provide a single net § 481(a) adjustment
for all such changes. See section 6.03(1)
(b) of Rev. Proc. 2015-13 for information
on making concurrent changes.
(6) Designated automatic accounting
method change number. The designated
automatic method change number (DCN)
for a change to the method of accounting
under this section 20.13 is “256.”
(7) Contact information. For further
information regarding a change under this
section, contact Douglas Kim at (202)
317-7003 (not a toll-free number).
.11 Modification to section 22.05 of
Rev. Proc. 2019-43, relating to Impermis-
sible methods of identification and valu-
ation of inventories. Section 22.05(1) of
Rev. Proc. 2019-43 is modified to add a
new subparagraph (d) to read as follows:
(d) Eligibility rule temporarily inappli-
cable for certain changes related to cost
offset method. The eligibility rule in sec-
tion 5.01(1)(f) of Rev. Proc. 2015-13 does
not apply to a method change under this
section 22.05 if:
(i) the taxpayer made or requested to
make a change during any of the five tax-
able years ending with the year of change
to recover inventory costs in a taxable
year prior to the taxable year in which
ownership of the inventory is transferred
to the customer to offset inclusions under
§ 451(b) and/or 451(c), as applicable;
(ii) in the case of a taxpayer with an
applicable financial statement (AFS), as
defined in section 16.12(1)(b) of this reve-
nue procedure, the taxpayer makes, for the
same year of change, a change in method
of accounting for income from the sale of
inventory under section 16.12(2)(a)(iii) of
this revenue procedure and, to the extent
the taxpayer receives advance payments
for the sale of inventory, section 16.12(2)
(a)(iv) of this revenue procedure, or in the
case of a taxpayer that does not have an
AFS, the taxpayer concurrently chang-
es its method of accounting for advance
payments from the sale of inventory under
section 16.12(2)(b)(ii) of this revenue pro-
cedure; and
(iii) the taxpayer makes the change un-
der this section 22.05 for its early appli-
cation year, as defined in section 16.12(4)
(c)(i) of this revenue procedure, or if a
taxpayer does not apply § 1.451-3 and/or
§ 1.451-8, as applicable, for a taxable year
beginning before January 1, 2021, for the
taxpayer’s first taxable year beginning on
or after January 1, 2021.
.12 Modification to section 22.11 of
Rev. Proc. 2019-43, relating to Permis-

Bulletin No. 2021–35 353 August 30, 2021
sible methods of identification and valu-
ation of inventories. Section 22.11(1) of
Rev. Proc. 2019-43 is modified to add
new subparagraphs (d) and (e) to read as
follows:
(d) Eligibility rule temporarily inap-
plicable. The eligibility rule in section
5.01(1)(f) of Rev. Proc. 2015-13 does not
apply to a method change under this sec-
tion 22.11 if:
(i) the taxpayer made or requested to
make a change during any of the five tax-
able years ending with the year of change
to recover inventory costs in a taxable
year prior to the taxable year in which
ownership of the inventory is transferred
to the customer to offset inclusions under
§ 451(b) and/or 451(c), as applicable;
(ii) in the case of a taxpayer with an
applicable financial statement (AFS), as
defined in section 16.12(1)(b) of this reve-
nue procedure, the taxpayer makes, for the
same year of change, a change in method
of accounting for income from the sale of
inventory under section 16.12(2)(a)(iii) of
this revenue procedure and, to the extent
the taxpayer receives advance payments
for the sale of inventory, section 16.12(2)
(a)(iv) of this revenue procedure, or in the
case of a taxpayer that does not have an
AFS, the taxpayer concurrently chang-
es its method of accounting for advance
payments from the sale of inventory under
section 16.12(2)(b)(ii) of this revenue pro-
cedure; and
(iii) the taxpayer makes the change un-
der this section 22.11 for its early appli-
cation year, as defined in section 16.12(4)
(c)(i) of this revenue procedure, or if a
taxpayer does not apply § 1.451-3 and/or
§ 1.451-8, as applicable, for a taxable year
beginning before January 1, 2021, for the
taxpayer’s first taxable year beginning on
or after January 1, 2021.
(e) Permissible method determina-
tion. The eligibility waiver under section
22.11(1)(d) of this revenue procedure is
not a determination by the Commissioner
that the taxpayer’s present method of ac-
counting described in section 22.11(1)(d)
(i) of this revenue procedure is a permissi-
ble method of accounting. The method of
accounting described in section 22.11(1)
(d)(i) of this revenue procedure is not a
permissible method of accounting for
any taxable year in which §§ 1.451-3 and
1.451-8 are applicable.
.13 Modification to section 22.18 of
Rev. Proc. 2019-43, relating to Change
from currently deducting inventories to
permissible methods of identification and
valuation of inventories. Section 22.18(1)
of Rev. Proc. 2019-43 is modified to add a
new subparagraph (d) to read as follows:
(d) Eligibility rule temporarily inap-
plicable. The eligibility rule in section
5.01(1)(f) of Rev. Proc. 2015-13 does not
apply to a method change under this sec-
tion 22.18 if:
(i) the taxpayer made or requested to
make a change during any of the five tax-
able years ending with the year of change
to recover inventory costs in a taxable
year prior to the taxable year in which
ownership of the inventory is transferred
to the customer to offset inclusions under
§ 451(b) and/or 451(c), as applicable;
(ii) in the case of a taxpayer with an
applicable financial statement (AFS), as
defined in section 16.12(1)(b) of this reve-
nue procedure, the taxpayer makes, for the
same year of change, a change in method
of accounting for income from the sale of
inventory under section 16.12(2)(a)(iii) of
this revenue procedure and, to the extent
the taxpayer receives advance payments
for the sale of inventory, section 16.12(2)
(a)(iv) of this revenue procedure, or in the
case of a taxpayer that does not have an
AFS, the taxpayer concurrently chang-
es its method of accounting for advance
payments from the sale of inventory under
section 16.12(2)(b)(ii) of this revenue pro-
cedure; and
(iii) the taxpayer makes the change un-
der this section 22.18 for its early appli-
cation year, as defined in section 16.12(4)
(c)(i) of this revenue procedure, or if a
taxpayer does not apply § 1.451-3 and/or
§ 1.451-8, as applicable, for a taxable year
beginning before January 1, 2021, for the
taxpayer’s first taxable year beginning on
or after January 1, 2021.
.14 Modification to section 30.02 of
Rev. Proc. 2019-43. Section 30.02 of Rev.
Proc. 2019-43 is modified to read as fol-
lows:
(1) Description of change. This change
applies to a taxpayer that wants to change
to the proportional method of account-
ing for OID on a pool of credit card re-
ceivables described in Rev. Proc. 2013-
26, 2013-22 I.R.B. 1160, as modified by
Rev. Proc. 2021-35, 2021-35 I.R.B. 355,
to reflect changes made to the treatment
of certain credit card fees by § 451(b), as
amended by the TCJA, and §§ 1.451-3
and 1.1275-2(l). The proportional method
of accounting applies to OID and certain
amounts that would not otherwise be treat-
ed as OID (for example, market discount
or bond premium). Under § 1.1275-2(l),
OID does not include items that are sub-
ject to the timing rules in § 1.451-3, such
as credit card late fees, credit card cash ad-
vance fees, and interchange fees (specified
credit card fees). Therefore, items subject
to the timing rules in § 1.451-3, such as
specified credit card fees, are excluded
from the proportional method. See section
16.12 of this revenue procedure for the
procedures by which a taxpayer, including
a taxpayer using the proportional method
of accounting, can change its method of
accounting for specified credit card fees to
comply with § 451(b), as amended by the
TCJA, and §§1.451-3 and 1.1275-2(l).
(2) Manner of making change.
(a) This change is made on a cut-off ba-
sis. Accordingly, a § 481(a) adjustment is
neither required nor permitted.
(b) The unaccrued OID for the pool as
of the beginning of the first period in the
year of change is equal to the unaccrued
OID for the pool as of the end of the pre-
ceding taxable year under the taxpayer’s
previous method of accounting for OID
on the pool, reduced by any amounts rep-
resenting charges or fees that are not prop-
erly treated as OID (for example, specified
credit card fees).
(3) Designated automatic accounting
method change number. The designat-
ed automatic accounting method change
number for a change under this section
30.02 is “183.”
(4) Contact information. For further
information regarding this section, please
contact Deepan Patel at (202) 317-3423
(not a toll-free number).
SECTION 4. MODIFICATIONS TO
REV. PROC. 2015-13
.01 Modifications to section 5.01(1)
of Rev. Proc. 2015-13, relating to the el-
igibility of automatic changes. Section
5.01(1)(e) of Rev. Proc. 2015-13 is modi-
fied by deleting the word “and” at the end
of the sentence, section 5.01(1)(f) of Rev.
Proc. 2015-13 is modified by deleting the

August 30, 2021 354 Bulletin No. 2021–35
period at the end of the sentence and add-
ing “; and”, and section 5.01 of Rev. Proc.
2015-13 is modified by adding a new sub-
paragraph (g) to read as follows:
(g) in the case of a taxpayer that uses
the AFS cost offset method in § 1.451-
3(c) and/or the advance payment cost off-
set method in § 1.451-8(e) and wants to
make a cost-offset related inventory meth-
od change, as defined in SECTION 5.06,
that is described in the List of Automatic
Changes, the taxpayer makes a concurrent
change under section 16.12(2)(a)(iii)(E)
and/or section 16.12(2)(a)(iv)(F) or sec-
tion 16.12(2)(b)(ii)(E) of Rev. Proc. 2019-
43, 2019-48 I.R.B. 1107, (or successor),
as applicable.
.02 Modification to section 5 of Rev.
Proc. 2015-13, relating to the eligibility
rules. Section 5 of Rev. Proc. 2015-13 is
modified by adding a new paragraph .06
to read as follows:
.06 Definition of “Cost-offset related
inventory method change.” A “cost-offset
related inventory method change” is any
change in method of accounting for inven-
tory or any change in method of account-
ing for a liability, as defined in § 1.446-
1(c)(1)(ii)(B), that affects or could affect
the taxpayer’s cost of goods in progress
offset under § 1.451-3(c) and/or § 1.451-
8(e). For example, a cost-offset related in-
ventory method change includes:
(1) a change in method of accounting
for one or more costs that the taxpayer
currently references to determine its cost
of goods in progress offset under its pres-
ent AFS cost offset method and/or its pres-
ent advance payment cost offset method,
including costs the taxpayer has imper-
missibly capitalized and/or allocated un-
der its present method of accounting for
inventory;
(2) a change in method of accounting
for one or more costs that the taxpayer
is required by § 1.451-3(c)(5)(ii) and/or
§ 1.451-8(e)(8)(ii) to reference to deter-
mine its cost of goods in progress offset
under § 1.451-3(c) and/or § 1.451-8(e),
regardless of whether the taxpayer cur-
rently references such cost under its pres-
ent AFS cost offset method and/or its pres-
ent advance payment cost offset method;
(3) a change in method of identifying
inventories; or
(4) a change in method of valuing in-
ventories.
.03 Modification to section 6.03(1)(b)
of Rev. Proc. 2015-13, relating to certain
concurrent changes in method of account-
ing for an automatic change. Section
6.03(1)(b) of Rev. Proc. 2015-13 is mod-
ified by moving the existing text within
subparagraph (b) to a new division (i) with
the heading “In general.”, and adding a
new division (ii) to read as follows:
(ii) Concurrent cost offset change
and cost-offset related inventory meth-
od change. A taxpayer that makes one or
more changes under section 16.12(2)(a)
(iii)(E), (a)(iv)(F), or (b)(ii)(E) of Rev.
Proc. 2019-43, 2019-48 I.R.B. 1107, (or
successor) to comply with § 1.451-3(c)
(5)(ii) and/or § 1.451-8(e)(8)(ii) of TD
9941, 86 FR 810, corrected by 86 FR
126 and 86 FR 2974, as applicable, and
one or more cost-offset related invento-
ry method changes, as defined in SEC-
TION 5.06, that are described in the List
of Automatic Changes for the same year
of change should file a single Form 3115
for such changes and put the designated
automatic accounting change numbers
for such changes on the appropriate line
of that Form 3115. As provided in sec-
tion 16.12(7)(b) of Rev. Proc. 2019-43,
a taxpayer is required to implement the
cost-offset related inventory method
change(s), as defined in SECTION 5.06,
before it implements the change(s) under
section 16.12(2)(a)(iii)(E), (a)(iv)(F), or
(b)(ii)(E) of Rev. Proc. 2019-43, as ap-
plicable.
SECTION 5. EFFECTIVE DATE
.01 In general. Except as provided in
section 5.02 of this revenue procedure,
this revenue procedure is effective for a
Form 3115 filed on or after August 12,
2021.
.02 Return of Form 3115 filed under the
non-automatic change procedures.
(1) The National Office will return any
Form 3115 requesting a change in meth-
od of accounting that was filed with the
National Office on or before August 12,
2021, under the non-automatic procedures
of Rev. Proc. 2015-13 for a taxable year
beginning after December 31, 2017, that
is pending with the National Office on Au-
gust 12, 2021, and that is eligible for the
automatic change procedures as described
in section 3 of this revenue procedure. The
National Office will send a letter to noti-
fy the taxpayer of the return of the Form
3115 and will return the user fee submit-
ted with the Form 3115.
(2) A taxpayer that resubmits the Form
3115 under the automatic change proce-
dures for a change in method of account-
ing described in this revenue procedure
must resubmit the Form 3115 that con-
forms to the automatic change procedures
to the IRS in Ogden, UT, by the earlier of
(a) the 60th calendar day after the date of
the National Office’s letter acknowledging
the return of the Form 3115, or (b) the date
the taxpayer is required to file the dupli-
cate copy of the Form 3115 under section
6.03(1)(a)(i)(B) of Rev. Proc. 2015-13.
See section 6.03(3) of Rev. Proc. 2015-
13 regarding additional required copies of
Form 3115.
(3) For the rules of Rev. Proc. 2015-13,
the timely resubmitted Form 3115 will be
considered filed as of the date the taxpayer
originally filed the Form 3115 under the
non-automatic change procedures in Rev.
Proc. 2015-13. This section 5.02 does not
extend the date the taxpayer must file the
original (returned) Form 3115 under sec-
tion 6.03(1)(a)(i)(A) of Rev. Proc. 2015-
13.
.03 Forms 3115 for changes in meth-
ods of accounting that can no longer be
filed under the automatic change proce-
dures of Rev. Proc. 2015-13, as a result
of modifications made by sections 3 and
4 of this revenue procedure. If before Au-
gust 12, 2021, a taxpayer properly filed
the duplicate copy of a Form 3115 under
the automatic change procedures in Rev.
Proc. 2015-13 before modification by
this revenue procedure, for a change in
method of accounting that can no longer
be filed under the automatic change pro-
cedures of Rev. Proc. 2015-13 as a result
of modifications made by this revenue
procedure, the taxpayer may make that
change in method of accounting under
the automatic change procedures in Rev.
Proc. 2015-13 before modification by
this revenue procedure.
SECTION 6. EFFECT ON OTHER
DOCUMENTS
.01 This revenue procedure modifies
and amplifies Rev. Proc. 2019-43.
.02 Rev. Proc. 2015-13 is modified.

Bulletin No. 2021–35 355 August 30, 2021
SECTION 7. PAPERWORK
REDUCTION ACT
The collection of information con-
tained in this revenue procedure has been
submitted to the Office of Management
and Budget for review under OMB control
number 1545-0123 in accordance with
the Paperwork Reduction Act (44 U.S.C.
3507(d)). An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless the collection of information dis-
plays a valid OMB control number. The
collection of information in this revenue
procedure is in sections 3.03(1) and 3.07.
This information is necessary and will be
used to determine whether the taxpayer
properly changed to a permitted method
of accounting. The collections of infor-
mation are required for the taxpayer to
obtain consent to change its method of
accounting.
SECTION 8. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Jo Lynn L. Ricks of the Of-
fice of the Associate Chief Counsel (In-
come Tax & Accounting). For further
information regarding this revenue proce-
dure, contact Douglas Kim at (202) 317-
7003 (not a toll free number).
26 CFR 601.601: Rules and regulations.
(Also Part I, Section 1272(a)(6).)
Rev. Proc. 2021-35
SECTION 1. PURPOSE
Rev. Proc. 2013-26, 2013-22 I.R.B.
1160, allows a taxpayer to use a safe har-
bor method of accounting for original is-
sue discount (OID) on a pool of credit card
receivables for purposes of § 1272(a)(6)
of the Internal Revenue Code (Code)—
the “proportional method.” This revenue
procedure modifies Rev. Proc. 2013-26
to reflect changes made to the treatment
of certain credit card fees by § 451(b) of
the Code, as amended by section 13221 of
Public Law 115–97 (131 Stat. 2054), com-
monly referred to as the Tax Cuts and Jobs
Act (TCJA), and §§ 1.451-3 and 1.1275-
2(l) of the Income Tax Regulations (T.D.
9941, 86 FR 810 (January 6, 2021)).
SECTION 2. BACKGROUND
.01 The Department of Treasury (Trea-
sury Department) and the Internal Reve-
nue Service (IRS) allowed the use of the
proportional method in Rev. Proc. 2013-
26 to reduce administrative burdens and
controversy for taxpayers and the IRS
in computing OID accruals on a pool of
credit card receivables under § 1272(a)
(6). The proportional method generally
produces the same results as the statutory
method of calculating OID accruals under
§ 1272(a)(6). The proportional method
generally allocates to an accrual period an
amount of unaccrued OID for the pool that
is proportional to the amount of the stated
redemption price at maturity (SRPM) of
the pool that is paid by cardholders during
the accrual period.
.02 Prior to the enactment of the TCJA,
the Treasury Department and the IRS ac-
cepted the treatment of certain credit card
fees associated with pools of credit card
receivables as creating or increasing OID
on those pools. See Rev. Proc. 2004-33,
2004-1 C.B. 989 (the IRS will not chal-
lenge the treatment of late fees as creating
or increasing OID); Rev. Proc. 2005-47,
2005-2 C.B. 269 (the IRS will not chal-
lenge the treatment of cash advance fees
as creating or increasing OID); and Chief
Counsel Notice CC-2010-018, Sept. 27,
2010 (as a result of the Tax Court’s de-
cision in Capital One Financial Corp.
and Subsidiaries v. Commissioner, 133
T.C. 136 (2009), the IRS will no longer
challenge or litigate the issue of wheth-
er interchange fee income creates or in-
creases OID). Accordingly, for purposes
of Rev. Proc. 2013-26, a taxpayer could
have treated as OID amounts attributable
to certain credit card fees associated with
pools of credit card receivables, including
credit card late fees, credit card cash ad-
vance fees, and interchange fees. In cer-
tain circumstances, for purposes of Rev.
Proc. 2013-26, a taxpayer may treat as
OID certain amounts that would not oth-
erwise be treated as OID (for example,
market discount or bond premium). See
section 4.02 of Rev. Proc. 2013-26.
.03 On December 22, 2017, § 451(b)
was amended by the TCJA to provide that,
for an accrual method taxpayer, the all
events test for an item of gross income, or
portion thereof, is met no later than when
the item, or portion thereof, is includ-
ed as revenue in an applicable financial
statement (AFS) (AFS Income Inclusion
Rule). With the amendment of § 451(b),
Congress overturned the historical Feder-
al income tax treatment of credit card late
fees, credit card cash advance fees, and
interchange fees by subjecting these fees
to the AFS Income Inclusion Rule instead
of the timing rules for OID. In particular,
the legislative history for the amendment
describes credit card late fees, credit card
cash advance fees, and interchange fees as
examples of amounts to which § 451(b),
as amended by the TCJA, would apply.
H.R. Rep. No. 115-466, at 429 (2017)
(Conf. Rep.).
.04 Section 451(b), as amended by
the TCJA, generally applies to taxable
years beginning after December 31, 2017.
However, in the case of income from a
debt instrument having OID, § 451(b),
as amended by the TCJA, applies to tax-
able years beginning after December 31,
2018. In addition, if a taxpayer makes a
qualified change in method of accounting
as defined in section 13221(d)(2) of the
TCJA for income from a debt instrument
having OID to comply with § 451(b), as
amended by the TCJA, for the taxpayer’s
first taxable year beginning after Decem-
ber 31, 2018, the § 481(a) adjustment peri-
od for the change is six taxable years. See
section 13221(e) of the TCJA.
.05 On January 6, 2021, the Treasury
Department and the IRS published in the
Federal Register (86 FR 810) final reg-
ulations under §§ 451(b) and 1275(d).
See §§ 1.451-3 and 1.1275-2(l) (final
regulations). In general, under the AFS
Income Inclusion Rule in § 1.451-3,
an item of income, or portion thereof,
may not be included in income later
than when that item, or portion thereof,
is treated as taken into account as AFS
revenue, as determined under § 1.451-
3(b)(2). The AFS Income Inclusion
Rule, however, does not apply to any
item of gross income the recognition
of which is determined using a special
method of accounting as defined in §
1.451-3(b)(13), which includes, except
as otherwise provided in § 1.451-3(j),
the timing rules for OID. Section 1.451-

August 30, 2021 356 Bulletin No. 2021–35
3(j) provides that if a fee is not spread
over a period of time as discount or as
an adjustment to the yield of a debt in-
strument (such as points) in the taxpay-
er’s AFS, and, but for §§ 1.451-3(j) and
1.1275-2(l), would be treated as creat-
ing or increasing OID for Federal in-
come tax purposes (specified fee), then
the rules in § 1.451-3 apply before the
rules in §§ 1271 through 1275 and the
regulations thereunder (the OID rules).
Section 1.451-3(j)(2) provides three ex-
amples of specified fees: credit card late
fees, credit card cash advance fees, and
interchange fees (specified credit card
fees). To coordinate the OID rules with
§ 451(b), as amended by the TCJA, and
§ 1.451-3, § 1.1275-2(l) provides that if,
and to the extent, a taxpayer’s item of
income with respect to a debt instrument
is subject to the timing rules in § 1.451-
3 because the item of income is a spec-
ified fee (including specified credit card
fees), then the taxpayer does not take the
item into account in determining wheth-
er the debt instrument has any OID. As
a result, the taxpayer does not treat the
item as creating or increasing any OID
on the debt instrument. The final regu-
lations do not affect the application of
the OID rules to any item that is not a
specified fee.
.06 Sections 1.451-3 and 1.1275-2(l)
generally apply to taxable years beginning
on or after January 1, 2021. However, in
the case of a specified fee other than a
specified credit card fee, those sections
apply to taxable years beginning on or
after January 6, 2022. For a taxable year
beginning after December 31, 2018, and
before January 1, 2021, a taxpayer and its
related parties, within the meaning of §§
267(b) and 707(b), may choose to apply
both §§ 1.451-3 and 1.1275-2(l), in their
entirety and in a consistent manner, to
all specified credit card fees subject to §
1.451-3, provided that, once applied to a
taxable year, the rules in § 1.1275-2(l) and
the rules in § 1.451-3 that apply to spec-
ified credit card fees, are applied in their
entirety and in a consistent manner for all
subsequent taxable years.
.07 Based on § 451(b) and the final
regulations, Rev. Proc. 2004-33, Rev.
Proc. 2005-47, and Chief Counsel Notice
CC-2010-018 no longer provide current
guidance on the treatment of the specified
credit card fees. Accordingly, the Treasury
Department and the IRS obsoleted these
items as of January 1, 2021. See 86 FR
810, 824 (January 6, 2021).
.08 Because, under § 1.1275-2(l), OID
no longer includes an item of income (or
portion thereof) that is subject to the tim-
ing rules of § 1.451-3 because the item (or
portion thereof) is a specified fee, such
as a specified credit card fee, Rev. Proc.
2013-26 is modified to avoid confusion as
to whether such items (or portions there-
of) are fees that are properly treated as
OID. Under Rev. Proc. 2013-26, as modi-
fied by this revenue procedure, a taxpayer
that wants to use the proportional method
for calculating OID accruals on a pool of
credit card receivables under § 1272(a)
(6) may treat as OID only fees or charges
that are not subject to the timing rules of
§ 1.451-3 (for example, promotional dis-
count) and certain amounts that would not
otherwise be treated as OID (for example,
market discount or bond premium). See
section 4.02 of Rev. Proc. 2013-26.
.09 On December 17, 2018, the Trea-
sury Department and the IRS published
Rev. Proc. 2018-60, 2018-51 I.R.B. 1045,
which added section 16.12 to the List of
Automatic Changes in Rev. Proc. 2018–
31, 2018-22 I.R.B. 637, for a taxpayer to
change its method of accounting for the
timing of income recognition for Feder-
al income tax purposes to comply with §
451(b), as amended by section 13221 of
the TCJA, for taxable years beginning
after December 31, 2017 (or, in the case
of income from a debt instrument hav-
ing OID, beginning after December 31,
2018). On September 23, 2019, the Trea-
sury Department and the IRS published
Rev. Proc. 2019-37, 2019-39 I.R.B. 731,
which modified section 16.12 in the List
of Automatic Changes in Rev. Proc. 2018-
31 to provide procedures for a taxpayer to
obtain the automatic consent of the Com-
missioner of Internal Revenue or his del-
egate (Commissioner) to make a method
change to comply with § 451(b) and pro-
posed § 1.451-3, including changes with
respect to specified credit card fees. Con-
current with the release of this revenue
procedure, the Treasury Department and
the IRS are issuing Rev. Proc. 2021-34,
2021-35 I.R.B. 337, which modifies Rev.
Proc. 2019-43, 2019-48 I.R.B. 1107, to
provide procedures for a taxpayer to ob-
tain the automatic consent of the Commis-
sioner to change methods of accounting to
comply with §§ 1.451-3 and 1.1275-2(l),
including a change to exclude items of in-
come that are subject to the timing rules of
§ 1.451-3 because the items are specified
fees, such as the specified credit card fees,
from the proportional method. Compliant
taxpayers that had been using the propor-
tional method for specified credit card
fees generally should have made a change
in method of accounting for the specified
credit card fees under either Rev. Proc.
2018-60 or Rev. Proc. 2019-37. Taxpayers
using the proportional method that have
not made the required method change may
use the procedures provided in Rev. Proc.
2019-43, as modified by Rev. Proc. 2021-
34, for changes with respect to specified
credit card fees.
SECTION 3. MODIFICATIONS TO
REV. PROC. 2013-26
.01 Modification to section 2.06 of Rev.
Proc 2013-26. Section 2.06 of Rev. Proc.
2013-26 is modified to read as follows:
.06 Under § 1.1275-2(l), if, and to
the extent, a taxpayer’s item of income
(or portion thereof) with respect to a
debt instrument is subject to the timing
rules in § 1.451-3 because the item is
a specified fee as defined in § 1.451-
3(j) (including credit card late fees,
credit card cash advance fees, and in-
terchange fees), then the taxpayer does
not take the item (or portion thereof)
into account to determine whether
the debt instrument has any OID. As
a result, the taxpayer does not treat
the item (or portion thereof) as creat-
ing or increasing OID on the pool of
credit card receivables to which the
item relates. In addition, there are oth-
er credit card fees that do not create or
increase the amount of OID on the pool
of credit card receivables to which the
fees relate. See, for example, Rev. Rul.
2004-52, 2004-1 C.B. 973 (credit card
annual fees do not result in OID). Cer-
tain credit card fees, however, are not
subject to the timing rules in § 1.451-3
because they are not specified fees and
create or increase the amount of OID

Bulletin No. 2021–35 357 August 30, 2021
on the pool of credit card receivables
to which the fees relate. An example
of such a fee is promotional discount,
which a merchant pays to a credit card
issuer in compensation for a low or
zero interest rate on a credit card re-
ceivable during a promotional period.
.02 Modification to section 4.01 of
Rev. Proc. 2013-26. Section 4.01 of Rev.
Proc. 2013-26 is modified by inserting
the following two sentences at the end of
that section: For purposes of this revenue
procedure, OID and SRPM do not include
an item of income (or portion thereof) that
is subject to the timing rules of § 1.451-3
because the item (or portion thereof) is a
specified fee, including a specified credit
card fee. See § 1.1275-2(l).
.03 Modification to section 4.02 of Rev.
Proc. 2013-26. Section 4.02 of Rev. Proc.
2013-26 is modified by replacing the par-
enthetical “(such as finance charges that
are qualified stated interest)” in the first
sentence of that section with the paren-
thetical “(such as finance charges that are
qualified stated interest and specified fees
as defined in § 1.451-3(j))”.
.04 Modification to section 4.03 of Rev.
Proc. 2013-26. Section 4.03 of Rev. Proc.
2013-26 is modified to read as follows:
.03 A taxpayer changing its meth-
od of accounting for OID on a pool of
credit card receivables to the propor-
tional method must use the automatic
change in method procedures of Rev.
Proc. 2019-43, 2019-48 I.R.B. 1107,
or its successor, to make the change on
a timely filed (including extensions)
original Federal income tax return for
the year of change. If a taxpayer chang-
es to the proportional method, the un-
accrued OID for the pool as of the be-
ginning of the first period in the year of
change is equal to the unaccrued OID
for the pool as of the end of the preced-
ing year under the taxpayer’s previous
method of accounting for OID on the
pool, reduced by any amounts rep-
resenting charges or fees that are not
properly treated as OID (such as credit
card late fees, credit card cash advance
fees, and interchange fees). See section
4.01 of this revenue procedure. If a tax-
payer does not already have a method
of accounting for OID on any pool of
credit card receivables, the taxpayer
may adopt the proportional method by
using it on a timely filed (including ex-
tensions) original Federal income tax
return for the first taxable year the tax-
payer must account for OID on a pool
of credit card receivables.
.05 Modification to section 5.02(1) of
Rev. Proc. 2013-26. Section 5.02(1) of
Rev. Proc. 2013-26 is modified to read as
follows:
(1) The SRPM as of the beginning
of the period (“Beginning SRPM”),
which is equal to the aggregate balance
owed on all credit card receivables in-
cluded in the pool at the beginning of
such period, other than amounts rep-
resenting charges or fees that are not
properly treated as OID (such as fi-
nance charges that are qualified stated
interest or specified fees as defined in
§ 1.451-3(j)).
.06 Modification to section 7 of Rev.
Proc. 2013-26. Section 7 of Rev. Proc.
2013-26 is modified by adding a second
sentence to read as follows: The modifi-
cations to this revenue procedure by Rev.
Proc. 2021-35 are effective on August 12,
2021.
.07 Modification to section 8 of Rev.
Proc. 2013-26. Section 8 of Rev. Proc.
2013-26 is modified to read as follows:
SECTION 8. AUTOMATIC CHANGE
PROCEDURES
Section 30.02 of Rev. Proc. 2019-43,
as modified by Rev. Proc. 2021-34, 2021-
35 I.R.B. 337, provides procedures for a
taxpayer to obtain the automatic consent
of the Commissioner to change the tax-
payer’s method of accounting for OID
on a pool of credit card receivables to the
proportional method described in this rev-
enue procedure.
SECTION 4. EFFECTIVE DATE
The modifications to Rev. Proc. 2013-
26 in section 3 of this revenue procedure
are effective on August 12, 2021.
SECTION 5. EFFECT ON OTHER
DOCUMENTS
This revenue procedure modifies Rev.
Proc. 2013-26.
SECTION 6. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Deepan Patel of the Office
of Associate Chief Counsel (Financial In-
stitutions & Products). For further infor-
mation regarding this revenue procedure,
contact Mr. Patel on (202) 317-3423 (not
a toll-free number).
26 CFR 601.105: Examination of returns and
claims for refund, credit, or abatement; determina-
tion of correct tax liability.
(Also Part 1, §§ 36B, 1.36B-2, 1.36B-3.)
Rev. Proc. 2021-36
SECTION 1. PURPOSE
This revenue procedure provides the
applicable percentage table (Applicable
Percentage Table) in § 36B(b)(3)(A)
of the Internal Revenue Code (Code)
for taxable years beginning in calendar
year 2022. This table is used to calcu-
late an individual’s premium tax credit
under § 36B. This revenue procedure
also provides the indexing adjustment
for the required contribution percent-
age (Required Contribution Percentage)
in § 36B(c)(2)(C)(i)(II) for plan years
beginning in calendar year 2022. This
percentage is used to determine wheth-
er an individual is eligible for affordable
employer-sponsored minimum essential
coverage.
SECTION 2. ADJUSTED ITEMS
.01 Applicable Percentage Table for
2022. Section 9661 of the American Res-
cue Plan Act of 2021, Pub. L. No. 117-2
(ARP), added § 36B(b)(3)(A)(iii) to the
Code to provide an Applicable Percentage
Table that applies for taxable years be-
ginning in calendar years 2021 and 2022.
For taxable years beginning in calendar
year 2022, the Applicable Percentage Ta-
ble for purposes of § 36B(b)(3)(A) and
§ 1.36B-3(g) of the Income Tax Regula-
tions is:

August 30, 2021 358 Bulletin No. 2021–35
Household income percentage of Federal poverty line:Initial percentageFinal percentage
Less than 150%0.00%0.00%
At least 150% but less than 200%0.00%2.00%
At least 200% but less than 250%2.00%4.00%
At least 250% but less than 300%4.00%6.00%
At least 300% but less than 400%6.00%8.50%
At least 400% and higher8.50%8.50%
.02 Required Contribution Percentage
for 2022.
(1) Section 9661 of the ARP did not
amend the indexing rules under § 36B(c)
(2)(C)(iv) relating to the Required Contri-
bution Percentage. See § 36B(b)(3)(A)(iii)
(I). The Required Contribution Percentage
for plan years beginning in calendar year
2022 is indexed based on the rates of pre-
mium growth relative to the rates of in-
come growth in the Department of Health
and Human Services (HHS) Notice of
Benefit and Payment Parameters for 2022
and Pharmacy Benefit Manager Standards
(86 F. R. 24140; May 5, 2021). In addi-
tion, the additional adjustment provided
in § 36B(b)(3)(A)(ii)(II) is not required
for plan years beginning in 2022 because
the Department of the Treasury and the
Internal Revenue Service have determined
that the failsafe exception described in
§ 36B(b)(3)(A)(ii)(III) applies for plan
years beginning in calendar year 2022.
(2) For plan years beginning in calen-
dar year 2022, the Required Contribution
Percentage for purposes of § 36B(c)(2)(C)
(i)(II) and § 1.36B-2(c)(3)(v)(C) is 9.61%.
SECTION 3. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 2014-37, 2014-2 C.B. 363,
is supplemented.
SECTION 4. EFFECTIVE DATE
This revenue procedure is effective for
taxable years and plan years beginning in
calendar year 2022.
SECTION 5. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Bill Ruane of the Office of
Associate Chief Counsel (Income Tax and
Accounting). For further information re-
garding this revenue procedure, contact
Mr. Ruane at (202) 317-4718 (not a toll-
free number).

Bulletin No. 2021–35 i August 30, 2021
Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarified is used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion. It
is not used where a position in a prior rul-
ing is being changed.
Distinguished describes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).
Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transactions.
This term is most commonly used in a ruling
that lists previously published rulings that
are obsoleted because of changes in laws or
regulations. A ruling may also be obsoleted
because the substance has been included in
regulations subsequently adopted.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the
new ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previous-
ly published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspended is used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of cas-
es in litigation, or the outcome of a Ser-
vice study.
Abbreviations
The following abbreviations in current use
and formerly used will appear in material
published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.

August 30, 2021 ii Bulletin No. 2021–35
Numerical Finding List
1
Bulletin 2021–35
Announcements:
2021-12, 2021-31 I.R.B. 267
2021-13, 2021-33 I.R.B. 314
2021-14, 2021-33 I.R.B. 315
Notices:
2021-39, 2021-27 I.R.B. 3
2021-40, 2021-28 I.R.B. 15
2021-41, 2021-29 I.R.B. 17
2021-42, 2021-29 I.R.B. 19
2021-38, 2021-30 I.R.B. 155
2021-44, 2021-31 I.R.B. 166
2021-45, 2021-31 I.R.B. 170
2021-47, 2021-32 I.R.B. 269
2021-46, 2021-33 I.R.B. 303
2021-48, 2021-33 I.R.B. 305
2021-49, 2021-34 I.R.B. 316
2021-43, 2021-35 I.R.B. 332
2021-50, 2021-35 I.R.B. 333
Proposed Regulations:
REG-107705-21, 2021-30 I.R.B. 162
REG-102951-16, 2021-32 I.R.B. 272
Revenue Procedures:
2021-28, 2021-27 I.R.B. 5
2021-29, 2021-27 I.R.B. 12
2021-24, 2021-29 I.R.B. 19
2021-14, 2021-30 I.R.B. 158
2021-30, 2021-31 I.R.B. 172
2021-31, 2021-33 I.R.B. 324
2021-33, 2021-34 I.R.B. 327
2021-34, 2021-35 I.R.B. 337
2021-35, 2021-35 I.R.B. 355
2021-36, 2021-35 I.R.B. 357
Revenue Rulings:
2021-12, 2021-27 I.R.B. 1
2021-13, 2021-30 I.R.B. 152
2021-14, 2021-31 I.R.B. 164
2021-15, 2021-35 I.R.B. 331
Treasury Decisions:
9951, 2021-30 I.R.B. 25
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2021–27 through 2021–52 is in Internal Revenue Bulletin
2021–52, dated December 27, 2021.

Bulletin No. 2021–35 iii August 30, 2021
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2021–35
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2021–27 through 2021–52 is in Internal Revenue Bulletin
2021–52, dated December 27, 2021.

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