To make an election under sections 167, 168, 179, 1400I, 1400L(b), 1400L(c), or 1400N(d), or former section 168,

To revoke an election made under one of those sections,

To make or revoke an election under section 13261(g)(2) or (3) of the Revenue Reconciliation Act of 1993 (relating to section 197 intangibles),

To change the placed-in-service date,

To change the salvage value (except for a change in salvage value to zero when the salvage value is expressly treated as zero by the Code, the regulations, or other published guidance), or

To change a useful life under section 167 (except for a change to or from a useful life, recovery period, or amortization period that is specifically assigned by the Code, the regulations, or other published guidance).

Commodity Credit Corporation loans (section 77)—for loans received from the Commodity Credit Corporation, from including the loan amount in gross income for the tax year in which the loan is received to treating the loan amount as a loan. Scope limitations do not apply to this change. This change is made on a cut-off basis. See section 1.01 in the Appendix of Rev. Proc. 2002-9.

Lawyers handling cases on a contingent fee basis (section 162)— from treating advances of money to their clients for litigation costs as deductible business expenses to treating those advances as loans. See section 1A.01 in the Appendix of Rev. Proc. 2002-9.

ISO 9000 costs (section 162)— to treating the costs as deductible, except to the extent they result in the creation or acquisition of an asset having a useful life substantially beyond the tax year. Scope limitations do not apply to this change. See section 1A.04 in the Appendix of Rev. Proc. 2002-9.

Restaurant smallwares costs (section 162)— to the smallwares method described in Rev. Proc. 2002-12, 2002-3 I.R.B. 374 (that is, as materials and supplies that are not incidental under Regulations section 1.162-3). Scope limitations do not apply to this change. The entire section 481(a) adjustment must be taken into account in the year of change. See section 1A.06 in the Appendix of Rev. Proc. 2002-9.

Bad debts (section 166)—for an applicant other than a bank, from accounting for bad debts using a reserve or other improper method to a specific charge-off method that complies with section 166. See section 1B.01 in the Appendix of Rev. Proc. 2002-9.

Bad debt conformity for banks (section 166)—for banks other than new banks, to the method that conforms to Regulations section 1.166-2(d)(3) for the first time the bank makes this change, or to involuntarily revoke this method. This change does not fall under the procedures of Rev. Proc. 2002-9. Instead, see Regulations section 1.166-2(d)(3).

Depreciation or amortization (impermissible) (sections 56, 167, 168, 197, 1400I, 1400L, and former section 168)— from an impermissible method to a permissible method for changes allowed under Temporary Regulations section 1.446-1T(e)(2)(ii)(d), and for depreciable property owned at the beginning of the year of change. Complete Schedule E of Form 3115. Attach the statements required by section 2.01(2)(b) in the Appendix of Rev. Proc. 2002-9, as modified by Rev. Proc. 2004-11, 2004-3 I.R.B. 311 (or successor), and Rev. Proc. 2005-43, 2005-29 I.R.B. 107. Certain scope limitations do not apply. An applicant changing its method of accounting for depreciation because of a change described in designated automatic accounting method change number 10 (sale or lease transactions) must file the Form 3115 in accordance with designated automatic accounting method change number 10. See section 2.01 in the Appendix of Rev. Proc. 2002-9, as modified by Rev. Proc. 2003-50, 2003-29 I.R.B. 119, and Rev. Proc. 2004-11 (or successor), as modified by Rev. Proc. 2005-43.

Depreciation (permissible) (sections 56 and 167)— from a permissible method to another permissible method listed in section 2.02 in the Appendix of Rev. Proc. 2002-9, as modified by Rev. Proc. 2004-11, 2004-3 I.R.B. 311 (or successor). Complete Schedule E of Form 3115. For public utility property, attach the statement required by section 2.02(4)(d) in the Appendix of Rev. Proc. 2002-9. Certain scope limitations do not apply. The section 481(a) adjustment is zero. See section 2.02 in the Appendix of Rev. Proc. 2002-9, as modified by Rev. Proc. 2004-11 (or successor).

Post-disposition depreciation or amortization (sections 56, 167, 168, 197, 1400I, and 1400L, and former section 168)—for an item of depreciable or amortizable property disposed of by the taxpayer during the year of change for which the taxpayer deducted less than the depreciation allowable, from an impermissible method of accounting for depreciation or amortization to a permissible method of accounting for depreciation or amortization. Complete Schedule E of Form 3115. Scope limitations do not apply. Attach the original Form 3115 to the filer's timely filed amended income tax return for the year of change and file the IRS National Office copy no later than when the original Form 3115 is filed with that amended return. The amended income tax return must include the adjustments to taxable income and any collateral adjustments to taxable income or tax liability (for example, adjustments to the amount or character of the gain or loss) resulting from this change in method of accounting. See Rev. Proc. 2004-11, 2004-3 I.R.B. 311.

Sale or lease transactions (sections 61, 162, 167, 168, and 1012)— from treating property as sold to treating property as leased, and vice versa, and from treating property as purchased to treating property as leased, and vice versa. Audit protection does not apply to this change. This change is made on a cut-off basis. See section 2.03 in the Appendix of Rev. Proc. 2002-9.

Modern golf course greens (sections 167, 168, and former section 168)—either to capitalization of land preparation costs undertaken in the construction of modern greens that are closely associated with depreciable assets or to the addition to basis of land for earthmoving costs inextricably associated with the land. Complete Schedule E of Form 3115. See section 2.04 in the Appendix of Rev. Proc. 2002-9.

Original and replacement tire costs (section 168)—for qualifying vehicles, to the original tire capitalization method. Complete Schedule E of Form 3115. See Rev. Proc. 2002-27, 2002-17 I.R.B. 802.

Depreciation of gas pump canopies (sections 167, 168, and former section 168)—for depreciation of certain stand-alone gasoline pump canopies and their supporting concrete footings, to classifying the gasoline pump canopies in asset class 57.0 of Rev. Proc. 87-56, 1987-2 C.B. 674, and to classifying the supporting concrete footings in asset class 00.3 of Rev. Proc. 87-56. Complete Schedule E of Form 3115. See Rev. Rul. 2003-54, 2003-23 I.R.B. 982.

Depreciation of utility assets (sections 167, 168, and former section 168)—for depreciation of assets owned by a utility used in general business operations, to classifying assets under Rev. Proc. 87-56,1987-2 C.B. 674, to conform with Rev. Rul. 2003-81, 2003-30 I.R.B. 126. Complete Schedule E of Form 3115. See Rev. Rul. 2003-81.

Depreciation of cable TV fiber optics (sections 167 and 168)— for depreciation of fiber optic node and trunk line of a cable television distribution system, to a safe harbor method for classifying the unit of property either as providing one-way communication services or two-way communication services. See Rev. Proc. 2003-63, 2003-32 I.R.B. 304.

Amortizable bond premium (section 171)— from amortizing bond premium to not amortizing the premium (revoking the section 171(c) election). Attach the statement required by section 1C.01(4) in the Appendix of Rev. Proc. 2002-9. This change is made on a cut-off basis. See section 1C.01 in the Appendix of Rev. Proc. 2002-9.

Research and experimental expenditures (section 174)— from the capitalization method to another permissible method, from the expense method to another permissible method, from the deferred expense method to another permissible method, or from the current period of amortization to a different period of amortization under the deferred expense method. Attach the statement required by section 2A.01(4) in the Appendix of Rev. Proc. 2002-9. Audit protection does not apply to this change. This change is made on a cut-off basis. See section 2A in the Appendix of Rev. Proc. 2002-9.

Computer software expenditures (sections 162 and 167)—for costs of developed, acquired, or leased or licensed computer software, to deductible expenses or capital expenditures and amortization (for developed software), to capital expenditures and depreciation or amortization (for acquired computer software), or to deductible expenses under Regulations section 1.162-11 (for leased or licensed computer software). Complete Schedule E of Form 3115 for changes relating to acquired computer software or developed computer software if the change is to capital expenditures and amortization. If applicable, attach the statement required by section 2B.04 in the Appendix of Rev. Proc. 2002-9, as modified by Rev. Proc. 2004-11, 2004-3 I.R.B. 311. See section 2B in the Appendix of Rev. Proc. 2002-9, as modified by Rev. Proc. 2004-11.

Package design costs (section 263)— to the capitalization method, to the design-by-design capitalization and 60-month amortization method, or to the pool-of-cost capitalization and 48-month amortization method. For changes to the capitalization method or to the design-by-design capitalization and 60-month amortization method, attach the statement required by section 3.01(2) in the Appendix of Rev. Proc. 2002-9. See section 3.01 in the Appendix of Rev. Proc. 2002-9.

Line pack gas or cushion gas costs (section 263)— to treating the costs as capital expenditures, the costs of recoverable amounts as not depreciable, and the costs of unrecoverable amounts as depreciable. A taxpayer that changes its method for the costs of unrecoverable amounts also must change to a permissible method of depreciation for those costs. See section 3.02 in the Appendix of Rev. Proc. 2002-9.

Removal costs (section 263)—for certain costs incurred in the retirement and removal of depreciable assets, to a method that conforms with Rev. Rul. 2000-7, 2000-9 I.R.B. 712. For public utility property, attach the statement required by section 3.03(2)(b) in the Appendix of Rev. Proc. 2002-9. Scope limitations do not apply to this change. See section 3.03 in the Appendix of Rev. Proc. 2002-9.

Certain uniform capitalization methods used by small resellers, formerly small resellers, and reseller-producers (section 263A)—for qualifying applicants, to a qualifying method or methods. Complete Schedule D, Parts II and III, of Form 3115. Scope limitations do not apply in certain cases. See sections 6.01 and 6.02 of Rev. Proc. 2002-54, and section 4.01(5) in the Appendix of Rev. Proc. 2002-9.

Certain uniform capitalization methods used by producers and reseller-producers (section 263A)—for qualifying applicants, to a qualifying method or methods. Complete Schedule D, Parts II and III, of Form 3115. The applicant may request this change and designated automatic accounting method change numbers 77 (environmental remediation costs) and 92 (allocation of environmental remediation costs to production) on a single Form 3115, but must comply with the ordering rules of Regulations section 1.263A-7(b)(2). See section 6.03 of Rev. Proc. 2002-54.

Research and experimental expenditures under uniform capitalization methods (section 263A)— from capitalizing research and experimental expenditures to inventory to no longer capitalizing these costs to inventory. Complete Schedule D, Part II, of Form 3115, as applicable. Attach the statement required by section 4.04(2) in the Appendix of Rev. Proc. 2002-9. Audit protection does not apply to this change. The applicant may request this change and designated automatic accounting method change numbers 77 (environmental remediation costs) and 92 (allocation of environmental remediation costs to production) on a single Form 3115, but must comply with the ordering rules of Regulations section 1.263A-7(b)(2). See section 4.04 in the Appendix of Rev. Proc. 2002-9.

Impact fees (section 263A)—for impact fees incurred in connection with the new construction or expansion of a residential building, to treating the costs as capital expenditures allocable to the building. Complete Schedule E of Form 3115 if the building is depreciable. The applicant may request this change and designated automatic accounting method change numbers 77 (environmental remediation costs) and 92 (allocation of environmental remediation costs to production) on a single Form 3115, but must comply with the ordering rules of Regulations section 1.263A-7(b)(2). See Rev. Rul. 2002-9, 2002-10 I.R.B. 614.

Related party transactions (section 267)—for losses, expenses, and qualified stated interest incurred in transactions between related parties, to disallowing or deferring certain deductions attributable to such transactions in accordance with section 267. See section 4A.01 in the Appendix of Rev. Proc. 2002-9.

Deferred compensation determination (section 404)—for determining whether an item of compensation is deferred compensation or when the item is paid, from making the determination by reference to when the item is secured to making the determination by reference to when the item is actually received. Audit protection and scope limitations do not apply to this change. The section 481(a) adjustment must be taken into account ratably over three tax years. See section 4B.01 in the Appendix of Rev. Proc. 2002-9.

Bonus or vacation pay deferred compensation (section 404)—for bonuses that are deferred compensation, from treating as deductible or capitalizable when accrued, to treating as deductible or capitalizable in the year in which includible in the employee's income, and for vacation pay that is deferred compensation, from treating as deductible or capitalizable when accrued to treating as deductible or capitalizable in the year in which paid to the employee. See section 4B.02 in the Appendix of Rev. Proc. 2002-9.

Grace period contributions (section 404)—for contributions made to a section 401(k) qualified cash or deferred arrangement or matching contributions under section 401(m), from treating contributions made after the end of the tax year but before the due date of the tax return as being “on account of” the tax year without regard to when the underlying compensation is earned to treating such contributions as not being “on account of” the tax year if they are attributable to compensation earned after the end of that tax year. See Rev. Rul. 2002-46, 2002-29 I.R.B. 117, as modified by Rev. Rul. 2002-73, 2002-45 I.R.B. 805.

Overall accrual method (section 446)—for a qualifying applicant, from a cash receipts and disbursements or a hybrid method to an overall accrual method, or to an overall accrual method in conjunction with the recurring item exception under section 461(h)(3), or to an overall accrual method for an applicant required to change to an overall accrual method under section 448, but who is ineligible to make the change under Regulations section 1.448-1(h)(2) (relating to the “first section 448 year”). Complete Schedule A, Part I, of Form 3115. Also complete Schedule D, Parts II and III, of Form 3115, as applicable. An applicant requesting this change and designated automatic accounting method change number 84 (deferral method for certain advance payments) must file a single Form 3115 for both changes. See section 5.01 in the Appendix of Rev. Proc. 2002-9.

Multi-year insurance policies for multi-year service warranty contracts (section 446)—for a manufacturer, wholesaler, or retailer of motor vehicles or other durable consumer goods accounting for multi-year insurance policies for multi-year service warranty contracts, to capitalizing and amortizing the costs. See section 5.03 in the Appendix of Rev. Proc. 2002-9.

Overall cash method ($1 million) (section 446)—for qualifying applicants changing to the overall cash method. Complete Schedule A, Part I, of Form 3115. Also, complete Schedule D, Parts II and III, of Form 3115, as applicable. Scope limitations do not apply to this change. The applicant may request this change and designated automatic accounting method change number 50 (small taxpayer ($1 million) inventory exception) on a single Form 3115. See section 5.05 in the Appendix of Rev. Proc. 2002-9.

Overall cash method ($10 million) (section 446)—for qualifying applicants changing to the overall cash method. Complete Schedule A, Part I, of Form 3115. Also, complete Schedule D, Parts II and III, of Form 3115, as applicable. Scope limitations do not apply to this change. The applicant may request this change and designated automatic accounting method change number 51 (small taxpayer ($10 million) inventory exception) on a single Form 3115. See Rev. Proc. 2002-28, 2002-18 I.R.B. 815.

Overall accrual method (section 448)— to an overall accrual method for the applicant's first tax year it is required to change from the cash method by section 448. Complete Schedule A, Part I, of Form 3115. Also, complete Schedule D, Parts II and III, of Form 3115, as applicable. An applicant requesting this change, designated automatic accounting method change number 35 (nonaccrual-experience method), and/or designated automatic accounting method change number 84 (deferral method for certain advance payments) must file a single Form 3115 for all such changes. This change does not fall under the procedures of Rev. Proc. 2002-9. Instead, see Regulations section 1.448-1.

Nonaccrual-experience method (section 448)—for an applicant changing its method of accounting for amounts received for the performance of services in fields described in section 448(d)(2)(A) (that is, health, law, engineering, architecture, accounting, actuarial science, performing arts, or consulting), from an overall accrual method to a nonaccrual-experience method, from one nonaccrual-experience method to another nonaccrual-experience method, and/or from the present method to a periodic system under Notice 88-51, 1988-1 C.B. 535. An applicant requesting this change, designated automatic accounting method change number 34 (overall accrual method under section 448), and/or designated automatic accounting method change number 84 (deferral method for certain advance payments) must file a single Form 3115 for all such changes. See Temporary Regulations section 1.448-2T(g) and (h) and Notice 88-51.

Interest accrual on non-performing loans (section 451)—for an accrual method bank accounting for qualified stated interest on non-performing loans, to the method whereby interest is accrued until either the loan is worthless under section 166 and is charged off as a bad debt or the interest is determined to be uncollectible. See section 5A.01 in the Appendix of Rev. Proc. 2002-9.

Advance rentals (section 451)—for advance rentals other than advance rentals subject to section 467, to inclusion in gross income in the tax year received. See section 5A.03 in the Appendix of Rev. Proc. 2002-9.

State tax refunds (section 451)—for an accrual method applicant with state or local income or franchise tax refunds, to accrue these items in the tax year the applicant receives payments or notice of approval of its refund claim (whichever is earlier), in accordance with Rev. Rul. 2003-3, 2003-2 I.R.B. 252. See Rev. Rul. 2003-3.

Capital cost reduction (CCR) payments (section 451)—for CCR payments (as defined in Rev. Proc. 2002-36, 2002-21 I.R.B. 993) made by vehicle lessees, to the method that excludes these payments from the applicant's gross income and from the applicant's bases in the purchased vehicles. See Rev. Proc. 2002-36.

Exclusion for certain returned magazines, paperbacks, or records (section 458)—for an accrual method applicant electing to exclude from gross income some or all of the income attributable to qualified sales during the tax year of magazines, paperbacks, or records that are returned before the close of the applicable merchandise return period for that tax year. The applicant's Form 3115 need contain only the information listed in Regulations section 1.458-2(d). This election does not fall under the procedures of Rev. Proc. 2002-9. Instead, see Regulations section 1.458-2.

Percentage-of-completion (section 460)—for an applicant not required by section 460 to use the percentage-of-completion method to account for its long-term contracts, from an exempt-contract method to the percentage-of-completion method. Complete Schedule D, Parts I and III, of Form 3115. Audit protection does not apply to this change. This change is made on a cut-off basis. See section 7A.02 in the Appendix of Rev. Proc. 2002-9.

Timing of incurring employee medical benefits liabilities (section 461)—for an applicant with an obligation to pay an employee's medical expenses that is neither insured nor paid from a welfare benefit fund, to treatment as a liability incurred in the tax year in which the applicant's employee files the claim with the applicant. See section 8.01 in the Appendix of Rev. Proc. 2002-9.

Timing of incurring real property, personal property, and state income tax liabilities (section 461)—for a qualifying applicant, to treating these taxes as incurred in the tax year in which the taxes are paid, or to account for these taxes under the recurring item exception to the economic performance rules, or to revoke the ratable accrual election under section 461(c). See section 8.02 in the Appendix of Rev. Proc. 2002-9.

Timing of incurring workers' compensation act, tort, breach of contract, or violation of law liabilities (section 461)—for a qualifying applicant accounting for self-insured liabilities arising under any workers' compensation act or out of any tort, breach of contract, or violation of law, to treating the liability as incurred in the tax year in which (a) all the events have occurred establishing the fact of the liability, (b) the amount of the liability can be determined with reasonable accuracy, and (c) payment is made to the person to which the liability is owed. See section 8.03 in the Appendix of Rev. Proc. 2002-9.

Timing of incurring payroll tax liabilities (section 461)—for FICA and FUTA taxes, state unemployment taxes, and railroad retirement taxes, to the method under which the applicant may deduct in Year 1 its otherwise deductible FICA and FUTA taxes, state unemployment taxes, and railroad retirement taxes imposed with respect to year-end wages properly accrued in Year 1, but paid in Year 2, if the requirements of the recurring item exception are met, or, for state unemployment taxes and railroad retirement taxes, to the method stated above where the applicant already uses that method of accounting for FICA and FUTA taxes. See section 8.04 in the Appendix of Rev. Proc. 2002-9.

Cooperative advertising (section 461)— to incurring a liability in the tax year in which these services are performed, provided the manufacturer is able to reasonably estimate this liability even though the retailer does not submit the required claim form until the following year. See section 8.05 in the Appendix of Rev. Proc. 2002-9.

Distributor commissions (section 461)— from deducting distributor commissions to capitalizing and amortizing distributor commissions using the distribution fee period method, the 5-year method, or the useful life method. This change is made on a cut-off basis. See section 8.06(2) in the Appendix of Rev. Proc. 2002-9.

Cash discounts (section 471)—for cash discounts granted for timely payment, when such discounts approximate a fair interest rate, from a method of consistently including the price of the goods before discount in the cost of the goods and including in gross income any discounts taken to a method of reducing the cost of the goods by the cash discounts and deducting as an expense any discounts not taken, or vice versa. Complete Schedule D, Parts II and III, of Form 3115, as applicable. See section 9.01 in the Appendix of Rev. Proc. 2002-9.

Estimating inventory shrinkage (section 471)— from the present method of estimating inventory shrinkage in computing ending inventory to the “retail safe harbor method” in section 4 of Rev. Proc. 98-29, 1998-15 I.R.B. 22, or to a method other than the retail safe harbor method, provided
(a) the applicant's present method of accounting does not estimate inventory shrinkage and (b) the applicant's new method of accounting (that estimates inventory shrinkage) clearly reflects income under section 446(b). Complete Schedule D, Parts II and III, of Form 3115, as applicable. If changing to a method other than the “retail safe harbor method,” attach the statement required by section 9.02(3) in the Appendix of Rev. Proc. 2002-9. Scope limitations do not apply to this change. Audit protection does not apply in certain cases. See section 9.02 in the Appendix of Rev. Proc. 2002-9.

Small taxpayer ($1 million) inventory exception (section 471)—for a qualifying applicant, from the present method of accounting for inventoriable items (including, if applicable, the method of capitalizing costs under section 263A) to treating inventoriable items in the same manner as materials and supplies that are not incidental under Regulations section 1.162-3. Complete Schedule A, Part I, and Schedule D, Parts II and III, of Form 3115, as applicable. Scope limitations do not apply to this change. The applicant may request this change and designated automatic accounting method change number 32 (overall cash method ($1 million)) on a single Form 3115. See section 9.03 in the Appendix of Rev. Proc. 2002-9.

Small taxpayer ($10 million) inventory exception (section 471)—for a qualifying applicant, from the present method of accounting for inventoriable items (including, if applicable, the method of capitalizing costs under section 263A) to treating inventoriable items in the same manner as materials and supplies that are not incidental under Regulations section 1.162-3. Complete Schedule D, Parts II and III, of Form 3115, as applicable. Scope limitations do not apply to this change. The applicant may request this change and designated automatic accounting method change number 33 (overall cash method ($10 million)) on a single Form 3115. See Rev. Proc. 2002-28, 2002-18 I.R.B. 815.

“Floor stocks” (section 471)—for payments made or received with respect to “floor stocks,” to conform with the holding of Rev. Rul. 2001-8, 2001-9 I.R.B. 726, or to elect the simplifying assumption regarding goods on hand described in Rev. Rul. 2001-8. Complete Schedule D, Parts II and III, of Form 3115, as applicable. If electing the simplifying assumption, provide the statement described in section 9.04(4)(b) in the Appendix of Rev. Proc. 2002-9. Scope limitations do not apply to this change. This change is made on a cut-off basis. See section 9.04 in the Appendix of Rev. Proc. 2002-9.

Qualifying volume-related trade discounts (section 471)— to treating qualifying volume-related trade discounts as a reduction in the cost of merchandise purchased at the time the discount is recognized in accordance with Regulations section 1.471-3(b). Complete Schedule D, Parts II and III, of Form 3115, as applicable. See section 9.05 in the Appendix of Rev. Proc. 2002-9.

Impermissible methods of inventory valuation (section 471)— to restore an inventory writedown or to discontinue maintaining a reserve specifically described within Regulations section 1.471-2(f). Complete Schedule D, Parts II and III, of Form 3115, as applicable. See section 9.06 in the Appendix of Rev. Proc. 2002-9.

Valuation of remanufactured cores (section 471)— for remanufacturers and rebuilders of motor vehicle parts and resellers of remanufactured and rebuilt motor vehicle parts that use the lower of cost or market method to value their inventory of cores, to the safe harbor method of accounting (the “Core Alternative Valuation” method) to value inventories of cores as provided for in Rev. Proc. 2003-20, 2003-6 I.R.B. 445. Complete Schedule D, Parts II and III, of Form 3115, as applicable. See Rev. Proc. 2003-20.

Change from LIFO inventory method (section 472)—for an applicant changing from the LIFO inventory method for its entire LIFO inventory, or for a pool or pools within its LIFO inventory, to the permitted method as determined in section 10.01(1)(b) in the Appendix of Rev. Proc. 2002-9. Complete Schedule D, Parts II and III, of Form 3115, as applicable. Attach the statements required by section 10.01(4) in the Appendix of Rev. Proc. 2002-9. See section 10.01 in the Appendix of Rev. Proc. 2002-9.

Determining current-year cost (section 472)— to determining current-year cost: (a) by reference to the actual cost of the goods most recently purchased or produced; (b) by reference to the actual cost of the goods purchased or produced during the tax year in the order of acquisition; or
(c) by application of an average unit cost equal to the aggregate actual cost of all the goods purchased or produced throughout the tax year divided by the total number of units so purchased or produced. Complete Schedule C, Part I, of Form 3115. This change is made on a cut-off basis. See section 10.02 in the Appendix of Rev. Proc. 2002-9.

Alternative LIFO inventory method (section 472)—for a qualifying applicant that sells new automobiles or new light-duty trucks, to the “Alternative LIFO Method” described in Rev. Proc. 97-36, 1997-33 I.R.B. 450. Complete Schedule C of Form 3115, as applicable. Attach the statement required by section 10.03(2)(c)(ii) in the Appendix of Rev. Proc. 2002-9 and the Form 970 required by reference in section 10.03(2)(c)(i) in the Appendix of Rev. Proc. 2002-9. This change is made on a cut-off basis. See section 10.03 in the Appendix of Rev. Proc. 2002-9.

Used vehicle alternative LIFO method (section 472)—for a qualifying applicant that sells used automobiles and used light-duty trucks, to the “Used Vehicle Alternative LIFO Method,” as described in Rev. Proc. 2001-23, 2001-10 I.R.B. 784. Complete Schedule C, Part I, of Form 3115. In general, this change is made on a cut-off basis. See section 10.04 in the Appendix of Rev. Proc. 2002-9.

Determining the cost of used vehicles purchased or taken as a trade-in (section 472)—for a qualifying applicant, to a method of (a) determining the cost of used vehicles acquired by trade-in using the average wholesale price listed by a consistently used official used car guide on the date of the trade-in; (b) determining the cost of used vehicles purchased for cash using the actual purchase price of the vehicle; or
(c) reconstructing the beginning-of-the-year cost of used vehicles purchased for cash using values computed by national auto auction companies based on vehicles purchased for cash, where the national auto auction company selected is consistently used. Complete Schedule C, Part I, of Form 3115. This change is made on a cut-off basis. See section 10.05 in the Appendix of Rev. Proc. 2002-9.

Change to IPIC inventory method (section 472)—for a qualifying applicant, from a non-inventory price index computation (IPIC) LIFO inventory method to the IPIC method in accordance with all relevant provisions of Regulations section 1.472-8(e)(3). The applicant may request this change and designated automatic accounting method change number 57 (determining current-year cost), or this change and designated automatic accounting method change number 62 (changes within IPIC inventory method) on a single Form 3115. Complete Schedule C of Form 3115, as applicable. This change is made on a cut-off basis. See section 10.06 in the Appendix of Rev. Proc. 2002-9.

Changes within IPIC inventory method (section 472)—for one or more of the following changes within IPIC:
(a) from the double-extension IPIC method to the link-chain IPIC method, or vice versa; (b) to or from the 10 percent method; (c) to a pooling method described in Regulations section 1.472-8(b)(4) or Regulations section 1.472-8(c)(2), including a change to begin or discontinue applying one or both of the 5 percent pooling rules; (d) combine or separate pools as a result of the application of a 5 percent pooling rule described in Regulations section 1.472-8(b)(4) or Regulations section 1.472-8(c)(2); (e) change the selection of BLS tables from Table 3 (Consumer Price Index for All Urban Consumers (CPI-U): U.S. city average, detailed expenditure categories) of the monthly CPI Detailed Report to Table 6 (Producer price indexes and percent changes for commodity groupings and individual items, not seasonally adjusted) of the monthly PPI Detailed Report, or vice versa; or (f) change the representative month when necessitated because of a change in tax year or a change in method of determining current-year cost made pursuant to section 10.02 in the Appendix of Rev. Proc. 2002-9. A scope limitation does not apply in certain cases. The applicant may request the change described in (f) above and designated automatic accounting method change number 57 (determining current-year cost) on a single Form 3115. Complete Schedule C of Form 3115, as applicable. This change is made on a cut-off basis. See section 10.07 in the Appendix of Rev. Proc. 2002-9, as modified by Rev. Proc. 2003-45, 2003-27 I.R.B. 11.

Replacement cost method for automobile dealers' parts inventory (section 472)— to the replacement cost method for automobile dealers' parts inventory described in Rev. Proc. 2002-17, 2002-13 I.R.B. 676. Complete Schedule D, Parts II and III, of Form 3115, as applicable. This change is made on a cut-off basis. See Rev. Proc. 2002-17.

Mark-to-market (section 475)—for accounting for securities or commodities by commodities dealers, securities traders, and commodities traders, to the mark-to-market method. An election statement must be filed earlier than the due date of Form 3115. See Rev. Proc. 99-17, 1999-7 I.R.B. 52, for rules relating to this statement. Scope limitations do not apply to this change. See section 10A.02 in the Appendix of Rev. Proc. 2002-9.

Dealer status changes (section 475)—for an applicant electing out of certain exemptions from securities dealer status, to the mark-to-market method. Attach the statement(s) required by Rev. Proc. 97-43, 1997-39 I.R.B. 12. For a special cut-off rule, see section 5.02 of Rev. Proc. 97-43. This change does not fall under the procedures of Rev. Proc. 2002-9. Instead, see Rev. Proc. 97-43.

Bank reserves for bad debts (section 585)— from the section 585 reserve method to the section 166 specific charge-off method. Certain scope limitations do not apply. See section 11.01 in the Appendix of Rev. Proc. 2002-9.

Insurance company premium acquisition expenses (section 832)—for certain insurance companies, to a safe harbor method of accounting for premium acquisition expenses. Scope limitations do not apply to this change. See Rev. Proc. 2002-46, 2002-28 I.R.B. 105.

Discounted unpaid losses (section 846)—for insurance companies other than life insurance companies computing discounted unpaid losses, to the composite method or to alternative methods. See Rev. Proc. 2002-74, 2002-51 I.R.B. 980.

Income from sources within the United States (section 861)—for certain transactions involving computer programs, to a method that conforms with Regulations section 1.861-18. See section 11A.01 in the Appendix of Rev. Proc. 2002-9.

Functional currency (section 985)— to the use of another functional currency for the applicant or its qualified business unit. See section 11B.01 in the Appendix of Rev. Proc. 2002-9.

Rule of 78s (section 1272)—for stated interest on certain short-term consumer loans, from the Rule of 78s method to the constant yield method. See section 5.04 in the Appendix of Rev. Proc. 2002-9.

Original issue discount (sections 1272 and 1273)— to the principal-reduction method for de minimis original issue discount (OID). Attach the statement required by section 12.01(3) in the Appendix of Rev. Proc. 2002-9. Audit protection and scope limitations do not apply to this change. This change is made on a cut-off basis. See section 12.01 in the Appendix of Rev. Proc. 2002-9.

Market discount bonds (section 1278)— from including market discount currently in income for the tax year to which the discount is attributable to including market discount in income for the tax year of disposition or partial principal payment (revoking the section 1278(b) election). Attach the statement required by section 12A.01(4) in the Appendix of Rev. Proc. 2002-9. This change is made on a cut-off basis. See section 12A.01 in the Appendix of Rev. Proc. 2002-9.

Interest income on short-term obligations (section 1281)— to currently including accrued interest and discount in income (to comply with section 1281). The entire section 481(a) adjustment must be taken into account in the year of change. See section 13.01 in the Appendix of Rev. Proc. 2002-9.

Stated interest on short-term loans (section 1281)—for a bank using the cash receipts and disbursements method of accounting, from accruing stated interest on short-term loans made in the ordinary course of business to using the cash method to report such interest. Scope limitations do not apply to this change. The entire section 481(a) adjustment must be taken into account in the year of change. See section 13.02 in the Appendix of Rev. Proc. 2002-9.

Sales of mortgage loans (section 1286)—for accounting for certain sales of mortgage loans in which the seller also enters into a contract to service the mortgages in consideration for amounts received from interest payments, from a method that is inconsistent with Rev. Rul. 91-46, 1991-2 C.B. 358, to a method that is consistent with Rev. Rul. 91-46. However, the change is only an automatic accounting method change for certain taxpayers who are under examination. This change does not fall under the procedures of Rev. Proc. 2002-9. Instead, see Rev. Proc. 91-51, 1991-2 C.B. 779.

Environmental remediation costs (section 263A)—for costs incurred to clean up land that a taxpayer contaminated with hazardous waste from the taxpayer's manufacturing operations, to capitalizing such costs in inventory costs under section 263A. The applicant requesting this change and another automatic change under section 263A may file one Form 3115 to make both changes, but must comply with the ordering rules of Regulations section 1.263A-7(b)(2). See Rev. Rul. 2004-18, 2004-8 I.R.B. 509.

Costs of intangibles and certain transactions (section 263(a))—for amounts paid or incurred to acquire or create intangibles, or to facilitate an acquisition of a trade or business, a change in the capital structure of a business entity, and certain other transactions, to a method of accounting provided in Regulations sections 1.263(a)-4, 1.263(a)-5, and 1.167(a)-3(b). For a tax year ending on or after December 31, 2005, or for an earlier tax year that is after the applicant's second tax year ending on or after December 31, 2003, see Rev. Proc. 2006-12, 2006-3 I.R.B. 310. For an applicant's second tax year ending on or after December 31, 2003, see Rev. Proc. 2005-9, 2005-2 I.R.B. 303, as modified by Rev. Proc. 2005-17, 2005-13 I.R.B. 797, which also provides, if the applicant desires, a change to utilize the 3½ month rule authorized by Regulations section 1.461-4(d)(6)(ii) or the recurring item exception authorized by Regulations section 1.461-5. For information regarding the scope limitations and how to complete Form 3115, see Rev. Proc. 2006-12 or Rev. Proc. 2005-9, as modified by Rev. Proc. 2005-17. Compute the section 481(a) adjustment taking into account only amounts paid or incurred in tax years ending on or after January 24, 2002. See Rev. Proc. 2006-12 or Rev. Proc. 2005-9, as modified by Rev. Proc. 2005-17.

REMIC inducement fees (section 446)—for inducement fees received in connection with becoming holders of noneconomic residual interests in REMICS, to a safe harbor method provided under Regulations section 1.446-6(e)(1) or (e)(2). See Rev. Proc. 2004-30, 2004-21 I.R.B. 950.

“All events test” method for credit card annual fees (section 446)—to a method that satisfies the all events test in accordance with Rev. Rul. 2004-52, 2004-22 I.R.B. 973. Scope limitations do not apply if the change is made for the applicant's first or second tax year ending on or after December 31, 2003. See Rev. Proc. 2004-32, 2004-22 I.R.B. 988.

Ratable inclusion method for credit card annual fees (section 446)—to the ratable inclusion method for credit card annual fees. Scope limitations do not apply if the change is made for the applicant's first or second tax year ending on or after December 31, 2003. See Rev. Proc. 2004-32, 2004-22 I.R.B. 988.

Credit card late fees (section 1272)—to a method that treats credit card late fees as interest income that creates or increases OID on the pool of credit card loans to which the fees relate. Scope limitations do not apply if the change is made for the applicant's first or second tax year ending on or after December 31, 2003. See Rev. Proc. 2004-33, 2004-22 I.R.B. 989.

Full inclusion method for certain advance payments (section 451)—to the full inclusion method as described in section 5.01 of Rev. Proc. 2004-34, 2004-22 I.R.B. 991. Scope limitations do not apply if the change is made for the applicant's first or second tax year ending on or after December 31, 2003, provided the applicant's method of accounting for advance payments is not an issue under consideration for tax years under examination. The applicant must be using, or changing to, an overall accrual method of accounting. See Rev. Proc. 2004-34.

Deferral method for certain advance payments (section 451)—to the deferral method as described in section 5.02 of Rev. Proc. 2004-34, 2004-22 I.R.B. 991 (except as provided in section 8.03 and 8.04(2) of Rev. Proc. 2004-34). The applicant must be using, or changing to, an overall accrual method of accounting. Scope limitations do not apply if the change is made for the applicant's first or second tax year ending on or after December 31, 2003, provided that the applicant's method of accounting for advance payments is not an issue under consideration for tax years under examination. In lieu of the information requested on line 1 of Schedule B of Form 3115, attach the information required in section 8.02(3) of Rev. Proc. 2004-34. An applicant requesting this change and designated automatic accounting method change number 30 (overall accrual method (section 446)), or 34 (overall accrual method (section 448)) (with or without designated automatic accounting method change number 35 (nonaccrual-experience method)), must file a single Form 3115 for all such changes. See Rev. Proc. 2004-34.

Film producer's treatment of certain creative property costs (section 446)—to account for creative property costs under the safe harbor method provided in Rev. Proc. 2004-36, 2004-24 I.R.B. 1063. Scope limitations do not apply if the change is made for the applicant's first or second tax year ending on or after December 31, 2003. See Rev. Proc. 2004-36.

Timber fertilization (section 162)—for costs incurred by a timber grower for the post-establishment fertilization of an established timber stand, to treat such costs as ordinary and necessary business expenses deductible under section 162. Scope limitations do not apply. See Rev. Rul. 2004-62, 2004-25 I.R.B. 1072.

Change in general asset account treatment due to a change in the use of MACRS property (section 168)—to the method of accounting provided in Regulations sections 1.168(i)-1(c)(2)(ii)(E) and 1.168(i)-1(h)(2). This change is made on a cut-off basis. See Regulations section 1.168(i)-1(l)(2)(ii).

Change in method of accounting for depreciation due to a change in the use of MACRS property (section 168)—to the method of accounting provided in Regulations section 1.168(i)-4. See Regulations section 1.168(i)-4(g)(2).

Depreciation of qualified non-personal use vans and light trucks (section 280F)—for certain vehicles placed in service before July 7, 2003, to a method of accounting in accordance with Regulations section 1.280F-6(f)(2). See Regulations section 1.280F-6(f)(2)(iv).

Insurance companies' incentive payments to health care providers (section 832)—for deducting provider incentive payments, to the method of including those payments in discounted unpaid losses without regard to section 404. Scope limitations do not apply if the change is made for the applicant's first or second tax year ending on or after December 31, 2003. See Rev. Proc. 2004-41, 2004-30 I.R.B. 90.

Up-front network upgrade payments made to utilities (section 451)—to a safe harbor method provided in section 5.01 of Rev. Proc. 2005-35, 2005-28 I.R.B. 76. Scope limitations do not apply if the change is made for the applicant's first tax year ending on or after July 11, 2005, or for a prior year of change pursuant to section 6.03 of Rev. Proc. 2005-35. See Rev. Proc. 2005-35.

Allocation of environmental remediation costs to production (section 263A)—to a method that allocates under section 263A environmental remediation costs to the inventory produced during the tax year such costs are incurred. Scope limitations do not apply if the change is made for the applicant's first or second tax year ending after February 6, 2004. An applicant that filed a Form 3115 on or before July 20, 2005, to comply with Rev. Rul. 2004-18, 2004-8 I.R.B. 509, for its first tax year ending after February 6, 2004, or was not required to change its method of accounting to comply with Rev. Rul. 2004-18, and files Form 3115 to comply with Rev. Proc. 2005-42, 2005-28 I.R.B. 67, for its first tax year ending after June 20, 2005, may effect the change using either a section 481(a) adjustment or a cut-off method. An applicant requesting this change and another automatic change under section 263A may file one Form 3115 to make both changes, but must comply with the ordering rules of Regulations section 1.263A-7(b)(2). See Rev. Rul. 2005-42.

Election to not treat qualified New York Liberty Zone (Liberty Zone) leasehold improvement property as 5-year property for purposes of section 168 (sections 168 and 1400L(c))—for Liberty Zone leasehold improvement property placed in service by the applicant after September 10, 2001, during the 2000, 2001, 2002, 2003, or 2004 tax year, to elect not to use the 5-year recovery period or 9-year recovery period, as applicable, provided under section 1400L(c). This change must be filed with the applicant's federal tax return for the tax year that includes June 29, 2005, or with the applicant's federal tax return for the first tax year succeeding the tax year that included June 29, 2005. Scope limitations do not apply. See Rev. Proc. 2005-43, 2005-29 I.R.B. 107.

Credit card cash advance fees (section 1272)—to a method that treats credit card cash advance fees as creating or increasing OID on a pool of credit card loans that includes the cash advances that give rise to the fees. Scope limitations do not apply if the change is made for the applicant's first or second tax year ending on or after December 31, 2004. See Rev. Proc. 2005-47, 2005-32 I.R.B. 269.

Self-constructed tangible personal property produced on a routine and repetitive basis (section 263A)—for an applicant's first tax year ending on or after August 2, 2005, from accounting for mixed service costs under the simplified service cost method to a method that allocates such costs using reasonable factors or relationships under a direct reallocation method, a step-allocation method, or any other reasonable allocation method (as defined under the principles of Regulations section 1.263A-1(f)(4)) as provided in Regulations section 1.263A-1(g)(4), or from accounting for additional section 263A costs under the simplified production method to a facts-and-circumstances method as provided in Regulations section 1.263A-1(f), when the self-constructed assets are not produced on a routine and repetitive basis (mass-produced or the applicable recovery period of the property is longer than 3 years). Scope limitations do not apply. Audit protection does not apply if the applicant's method of accounting for mixed service costs or additional section 263A costs is an issue under consideration at the time the application is filed with the IRS National Office. The section 481(a) adjustment period is two tax years for a net positive adjustment. The applicant can request this change and designated automatic accounting method change numbers 77 (environmental remediation costs) and 92 (allocation of environmental remediation costs to production) on a single Form 3115, but must comply with the ordering rules of Regulations section 1.263A-7(b)(2). See Temporary Regulations sections 1.263A-1T(h)(2)(i)(D) and 1.263A-2T(b)(2)(i)(D).

Replacement cost method for heavy equipment dealers' parts inventory (section 472)—to the replacement cost method for heavy equipment dealers' parts inventory described in Rev. Proc. 2006-14, 2006-4 I.R.B. 350. Complete Schedule D, Parts II and III, of Form 3115, as applicable. Audit protection and scope limitations do not apply in certain cases. This change is made on a cut-off basis. See Rev. Proc. 2006-14.

Depreciation of qualified revitalization building in the expanded area of a renewal community (section 1400I)—for a qualified revitalization building that is placed in service by the applicant after December 31, 2001, in the area of a renewal community that was expanded by the U.S. Department of Housing and Urban Development and for which the applicant receives a retroactive commercial revitalization expenditure allocation. This change applies only if the applicant filed the federal tax return for the placed-in-service year of that building on or before the date the applicant received the retroactive commercial revitalization expenditure allocation. This change must be filed with the applicant's federal tax return for the taxable year that includes the date on which the commercial revitalization agency makes the retroactive commercial revitalization expenditure allocation, or with the applicant's federal tax return for the first tax year succeeding the tax year that included the date on which the commercial revitalization agency made the retroactive commercial revitalization expenditure allocation. Scope limitations do not apply. See Rev. Proc. 2006-16, 2006-9 I.R.B. 539.

Insurance contracts acquired in an assumption reinsurance transaction (section 197)—for an applicant's first tax year ending after April 10, 2006, for certain acquisitions of insurance contracts that apply the rules of Temporary Regulations section 1.197-2T(g)(5)(ii) to transactions occurring prior to April 10, 2006, to comply with Regulations section 1.197-2(g)(5). This change does not apply if the applicant's proper treatment of any such property is an issue under consideration in an examination, before an Appeals office, or before a Federal court. Scope limitations do not apply. See Regulations section 1.197-2(g)(5).

Elections to treat participations and residuals under the income forecast method (section 167(g))—for property subject to the income forecast method under section 167(g) and placed in service by the applicant after October 22, 2004, to elect either to include in the adjusted basis of the property, participations and residuals expected to be paid before the end of the tenth tax year following the tax year in which the property is placed in service, or to exclude participations and residuals from the adjusted basis of the property and deduct the participations and residuals in the tax year that the participations and residuals are paid. This change applies only if, before June 15, 2006, the applicant filed its federal tax return for the tax year during which the property was placed in service. This change must be filed with the applicant's federal tax return for the first or second tax year ending on or after December 31, 2005. Scope limitations do not apply. See Notice 2006-47, 2006-20 I.R.B. 892.

Election to treat the cost of any qualified film or television production as an expense (section 181)—for any qualified film or television production subject to section 181 for which the applicant begins principal photography after October 22, 2004, but first paid or incurred costs of the production before October 23, 2004, to elect to treat the costs of the production as an expense, as provided for in section 181. This change applies only if, before June 15, 2006, the applicant filed its federal tax return for the tax year in which the costs of the production were first paid or incurred. This change must be filed with the applicant's federal tax return for the first or second tax year ending on or after December 31, 2005. Scope limitations do not apply. See Notice 2006-47, 2006-20 I.R.B. 892.

Election to treat reforestation expenditures as expenses (section 194)—for any qualified timber property, to elect to deduct reforestation expenditures paid or incurred after October 22, 2004, as provided for in section 194(b). This change applies only if, before June 15, 2006, the applicant filed its federal tax return for the tax year in which the reforestation expenditures were paid or incurred. This change must be filed with the applicant's federal tax return for the first or second tax year ending on or after December 31, 2005. Scope limitations do not apply. See Notice 2006-47, 2006-20 I.R.B. 892.

Election to treat certain desulfurization costs as expenses (section 179B)—for a small business refiner (as defined in section 45H(c)(2)), to elect to deduct 75 percent of qualified capital costs (as defined in section 45H(c)(2)) paid or incurred after December 31, 2002, in tax years ending after that date. This change applies only if, before June 15, 2006, the applicant filed its federal tax return for the tax year in which the qualified capital costs were paid or incurred. This change must be filed with the applicant's federal tax return for the first or second tax year ending on or after December 31, 2005. Scope limitations do not apply. See Notice 2006-47, 2006-20 I.R.B. 892.

Qualifying electric transmission transactions (section 451(i))—for qualified gain from a qualifying electric transmission transaction, to recognizing all or part of the qualified gain ratably over the 8-year period beginning with the year that includes the date of the transaction, as provided in section 451(i). This change applies only if, before June 15, 2006, the applicant filed its federal tax return for the tax year in which the qualified electric transmission transaction occurred. This change must be filed with the applicant's federal tax return for the first or second tax year ending on or after December 31, 2005. Scope limitations do not apply. See Notice 2006-47, 2006-20 I.R.B. 892.