The IRS Issues Transition Period Guidance for Recently Revised Form 3115

The Internal Revenue Service (“Service”) issued on March 24 of 2016 their Announcement 2016-14 addressing the transition period implementation dates in connection with the recently revised Form 3115 entitled “Application for Change in Accounting Method” which was most recently revised and released to the public in December of 2015.

This presents a paradigm shift as while most tax forms and publications are updated annually, this was the first update to Form 3115 since December of 2009. As a reminder, Form 3115 is required to be filed in order to request an accounting method change (e.g., an accounting method change in connection to TPR Compliance; an accounting method change in connection to Depreciation Adjustments resulting from Cost Segregation analysis; etc).

Scope and Application of Announcement 2016-14

In order to provide a reasonable transition period with proper clarity in connection to the December of 2015 release of the newly revised Form 3115, the Service indicated that it will now accept either the December of 2015 version of Form 3115 or the December of 2009 version of Form 3115 filed on or before April 19, 2016, except where the use of the December of 2015 version of Form 3115 is specifically required in guidance published within the Internal Revenue Bulletin.

In contrast, a taxpayer filing Form 3115 after April 19, 2016, must use the December of 2015 version of Form 3115. Noting, the Service encourages taxpayers to use the December of 2015 version of Form 3115 prior to April 20, 2016. It should be duly noted that regardless of the form used, taxpayers must still provide all the information required as set forth pursuant to Rev. Proc. 2015-13 (or Rev. Proc. 2011-14, 2011-4 I.R.B. 330, if the taxpayer is making a change under the transition rule in section 15.02(1)(a)(ii) of Rev. Proc. 2015- 13, 2015-5 I.R.B. 419, as modified by Rev. Proc. 2015-33, 2015-24 I.R.B. 1067).

Finally, the Service also announced that the filing locations for the duplicate Form 3115 is changing. In previous years, taxpayers were required to file a duplicate Form 3115 with the Service Center in Ogden, Utah. However, commencing in January of 2016, the duplicate copy of the December of 2015 version of Form 3115 for an automatic change request is now filed with the Service Center in Covington, Kentucky located at:

Internal Revenue Service
201 West Rivercenter Blvd.
PIN Team Mail Stop 97
Covington, KY 41011-1424

If filed prior to April 20, 2016, a taxpayer may file its duplicate copy of Form 3115 with the Service in either Ogden, Utah; or Covington, Kentucky, utilizing the December of 2009 version of Form 3115.

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