Due to COVID-19 concerns, the IRS has provided temporary procedures that allow taxpayers to fax the required duplicate copy of Form 3115, Application for Change in Accounting Method, when making an accounting method change using the automatic consent procedures.

BACKGROUND

An accounting method is the method by which income and expenses are reported for taxation purposes. A change in accounting method includes any change in the taxpayer’s overall method of accounting, (e.g., cash to accrual), but it also includes changes in the treatment of any “material” item (e.g., a depreciation change from a cost segregation study). Taxpayers wanting to make an accounting method change file Form 3115, Application for Change in Accounting Method. The original Form 3115 should be filed with the income tax return while, prior to these temporary procedures, a duplicate copy of the signed Form 3115 would be mailed to the IRS in Ogden, Utah.

THE NEW PROCEDURE

For automatic accounting method changes, the duplicate copy of Form 3115 should be faxed, along with a coversheet, to 844-249-8134. The fax coversheet should include the following:

• Subject: Form 3115
• Sender’s name, title, phone number, address
• Taxpayer’s name
• Date
• Number of pages faxed (including cover sheet)

Do not include sensitive information on the cover sheet, such as Employer Identification Number or Social Security number. This temporary procedure is effective until further notice. More information can be found by viewing the document above or visiting the IRS website.

HOW WE CAN HELP

ICS Tax completes hundreds of Form 3115s annually in connection to the cost segregation studies, 179D Energy Efficient Commercial Building Deduction, and Comprehensive Fixed Asset Reviews. If you have a question on From 3115 or need help with specialty tax planning, please contact an ICS Tax representative.

Authors: Alexander Bagne, JD, CPA, MBA, CCSP

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ICS Tax, LLC (ICS) is a consulting firm providing innovative tax planning strategies. ICS collaborates with taxpayers and their tax professionals to identify credits and incentives that reduce tax liabilities and increase profitability. ICS provides nationwide service through its offices throughout the country.