The American Institute of Certified Public Accountants (AICPA) has urged the US Department of the Treasury and the Internal Revenue Service (IRS) to make further revisions to the accounting method change procedures in Revenue Procedure 2015-13.
In a letter to both agencies, the AICPA set out additional recommendations, building on earlier proposals, to encourage voluntary compliance while reducing procedural hurdles.
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Its key proposals include shifting to an “issue under consideration” standard so that taxpayers can change erroneous accounting methods while still under examination.
It also suggested replacing existing window period rules with a requirement that examining agents give written notice when an issue is no longer under consideration.
In its letter, the AICPA recommended deleting section 3.08(4) from Rev. Proc. 2015-13 to remove the separate “issue under consideration” standard for foreign corporations and applying the domestic definition in section 3.08(1) to all taxpayers, including controlled foreign corporations (CFCs).
The accounting body also recommended the removal of section 8.02(1)(a)(iii) so that CFCs can use the three‑month window exception on the same terms as domestic corporations.
It asked authorities to restore CFCs’ ability to use the 120‑day window to file an accounting method change when an examination ends, if the issue is not under consideration, mirroring the treatment of domestic corporations.
In its letter, the AICPA mentioned removing the 150% test that restricts audit protection for CFCs.
AICPA further recommended providing automatic section 9100 relief where a taxpayer files the Ogden, UT copy of Form 3115 within three months of the due date (including extensions) of the return for the year of change when the federal return was filed in a timely manner, implemented the requested change on that return and attached the original Form 3115 to the return.
The AICPA asked the authorities to allow taxpayers to elect to accelerate positive section 481(a) adjustments from prior-year accounting method changes when an eligible acquisition takes place.
AICPA Tax Policy & Advocacy senior manager Reema Patel said: “The recommendations in this letter – particularly replacing those rules with an ’issue under consideration’ – would simplify the process and allow the taxpayer to file a method change after 12 months under continuous examination, unless the issue is actively under consideration by the Exam, Appeals or a federal court.”
The AICPA recently asked the US Department of the Treasury and the IRS to clarify proposed regulations for Trump Accounts.
