Starting Your Business/Keeping Records
Accounting Periods and Methods
ERROR MSGChanges in Accounting Method

hoteles PisaChange in AccountingMethod. You can generally choose any permitted accounting method when you fileyour first tax return. You do not need IRS approval to choose the method. It must be usedconsistently from year to year and clearly show your income. See Accounting Methods.

A change in your accounting method includes a change not only inyour overall system of accounting but also in the treatment of any material item. Althoughan accounting method can exist without treating an item the same all the time, anaccounting method is not established for an item, in most cases, unless the item istreated the same every time.

Changing Your Business' Method Of Accounting

Automatic Consent. You may be able to change your business'method of accounting with the IRS's automatic consent and receive the benefits of avoluntary change in method of accounting. If your business qualifies for automaticconsent, you make the change without paying any user fee and without waiting for a letterruling.

Rev. Proc.99-49, IRB 1999-52, describes 41 types of changes in method of accounting that you canmake for your business with the IRS's automatic consent, if your business qualifies. Forexample, if you are currently using the cash receipts and disbursements (cash) methodof accounting for your business you may be able to change to the accrual method using theautomatic consent procedures in Rev. Proc. 99-49, even if the cashmethod is not a proper method for your business. The other 40 types of changes aredescribed in the Appendix of Rev. Proc. 99-49.

Additional types of changes in method of accounting that you may beable to make for your business with the IRS's automatic consent are described in Rev. Proc. 98-58, 1998-49 I.R.B. 19;Rev. Proc. 97-43, 1997-2 C.B.494; Rev. Proc. 92-67, 1992-2C.B. 429; Rev. Proc. 92-29,1992-1 C.B. 748; and Rev. Proc. 91- 51,1991-2 C.B. 779.

Non-Automatic Consent. If you want to change your business'method of accounting, but can not use one of the IRS's automatic consent revenueprocedures, you may be eligible to request the change under the non-automatic provisionsof Rev. Proc. 97-27, 1997-1 C.B.680. You must file your request under Rev. Proc. 97-27 during the tax year you want tochange to the new method. Also, you must pay a user fee with your request under Rev. Proc.97- 27. The user fee for requests filed under Rev. Proc. 97-27 currently is $500 forbusiness related tax issues for business' with gross income of less than $1 million, and,generally, $1,200 otherwise. When your request is approved, you will receive a letterruling containing the IRS's consent for your change. You must have this letter to use thenew method of accounting on your return.

IRS Form. Ordinarily, you will need to file Form 3115,Application for Change in Accounting Method, to change your business' method ofaccounting under an automatic consent revenue procedure or to request a change under thenon- automatic provisions of Rev. Proc. 97-27.

Benefits. When you voluntarily change your business' methodof accounting from one that is improper to one that is proper under either the automaticor the non-automatic consent procedures, you generally receive the following benefits foryour business:

• a current year of change to the proper method (no amended returns for prior years);

• no interest or otherwise applicable penalty for the benefits your business received from the past use of that improper method;

• Katowice luxury hotelsa four year spread of any adjustment required under section 481(a) of the Code (to convert your old method to the new proper method); and
• protection from the IRS requiring your business to change from that improper method for an earlier

IRS Approval for Changein Accounting Method

Important References:

Publication 538Alojamiento de lujo Bojnice   Accounting Periods ands Methods
Form 3115           Application for Change inAccounting Method