! protection are different. See section 8.02 of Rev. Proc.

CAUTION 2015-13 (different rules for the 3-month window,

120-day window, and audit protection at end of exam).

Line 8a. If you answered “Yes,” complete lines 8b–d.

Line 8b. To determine if the applicant’s accounting method is an issue under consideration by Appeals and/or a federal court, see sections 3.08(2) and 3.08(3) of Rev. Proc. 2015-13.

Line 8c. If you answered “Yes” to line 8a, include the name and telephone number of the Appeals officer(s) and/or counsel to the government, as well as the tax year(s) before Appeals and/or federal court in the designated places.

Line 8d. If you answered “Yes” for line 8a, provide a copy of the signed Form 3115 to the Appeals officer(s) and/or all counsel to the government, as applicable, no later than the date the filer

-7-

timely files Form 3115. See section 6.03(3)(a) of Rev. Proc. 2015-13.

Line 9. If you answered “Yes” to line 6a or 8a, complete line 9. The information requested on line 9 should be included on a separate attachment.

Line 10. If you answered “Yes,” attach an explanation. Unless otherwise provided, the applicant does not receive audit protection for the requested change if it is an issue under consideration. See sections 3.08 and 8.02(7) of Rev. Proc. 2015-13.

Lines 11a–c. Unless otherwise provided, an applicant is not eligible to file under the automatic change procedures if the applicant made or requested a prior overall method change or a prior item change (for the same item) within the 5 tax years ending with the requested year of change. For additional details, see section 9.03(6)(a) of Rev. Proc. 2023-1 and section 11.02(2) of Rev. Proc. 2015-13.

Line 12. For further details, see section 9.03(6)(b) of Rev. Proc. 2022-1.

Line 13. If you answered “Yes,” complete Schedule A of Form 3115. For example, an overall accounting method change includes a change from an accrual method to the cash receipts and disbursements method or vice versa. See section 446(c).

Line 14. Provide the information requested on lines 14a–d if the applicant answered “No” to question 13 or if the applicant answered “Yes” to question 13 and is also changing to a special accounting method for one or more items.

With the information requested on line 14b, the applicant is also required to provide a statement of whether or not the applicant has claimed any federal tax credit, grant, or subsidy relating to the item(s) being changed (for example, the employee retention credit for a change in method related to payroll taxes). A special accounting method for an item is an accounting method (other than the cash method or an accrual method) expressly permitted by the Code, regulations, or guidance published in the I.R.B. that deviates from the rules of sections 446, 451, and 461 (and the related regulations) that is applicable to the applicant's overall accounting method (proposed overall method if being changed). For example, the installment accounting method under section 453, the mark-to-market method under section 475, and the long-term contract method under section 460 are special methods of accounting. See section 15.01(2)(d) of Rev. Proc. 2022-14.

Lines 15a and 15b. Provide the requested information for each applicant. For guidance on using different methods of accounting for each trade or business, see section 446(d).

An applicant may include each member of a consolidated group, each wholly owned partnership within a consolidated group, each separate and distinct trade or business of each member of a consolidated group or other entity (even if the change is for all of a member's or other entity's trades or businesses), and each eligible CFC or 10/50 corporation filing a single Form 3115 requesting the identical accounting method change. Also see Who Must File, earlier.

Lines 16a–c. For non-automatic changes, the applicant is required to provide a full explanation of the legal basis to support the proposed method, including all authorities supporting the proposed method, and a discussion of all contrary authorities. For further details on what is to be included, see Rev. Proc. 2023-1, sections 7.01(9) (statement of supporting authorities), 9.03(1) (facts and other information), 9.03(2) (statement of contrary authorities), 9.03(4) (analysis of material facts), and 9.03(7) (statement identifying pending legislation). For the following automatic method changes, the applicant is only required to complete lines 16a–b, unless the information on

lines 16a–b is otherwise provided in the applicable Form 3115 Schedules A–E: DCNs 6, 7, 28, 54, 55, 64, 65, 108, 111, 114, 127, 194, and 200 (only for changes listed in sections 6.12(3)(a) (ix), 6.12(3)(a)(x), and 6.12(3)(b)(viii) in the List of Automatic Changes; 205 (only for changes listed in sections 6.13(3)(h) and 6.13(3)(j) in the List of Automatic Changes); 206 (only for changes listed in sections 6.14(3)(a), 6.14(3)(h), and 6.14(3)(j) in the List of Automatic Changes; 207 (only for changes listed in sections 6.15(3)(a) and 6.15(3)(d) in the List of Automatic Changes); 211, 218, 231, 237, 241, 242, 250, 251, 252, 253, 254, 255, and 256. Line 16c does not need to be completed for applicants filing automatic method changes. For further details on what is to be included, see Rev. Proc. 2023-1, sections 7.01(9) (statement of supporting authorities), 9.03(1) (facts and other information), and 9.03(4) (analysis of material facts).

If the automatic DCN is not specifically listed in the paragraph above, or subsequent guidance released after the issuance of these instructions, skip lines 16a–c.

Line 17. Insurance companies must also attach a statement indicating whether the proposed accounting method will be used for annual statement accounting purposes.

Line 18. For details on requesting and scheduling a conference, see sections 9.04(4) and 10 of Rev. Proc. 2023-1.

Lines 19a and 19b. For certain automatic method changes, the applicant must demonstrate that it meets the gross receipts test under section 448(c) to qualify for the change. This gross receipts test is met if a taxpayer has average annual gross receipts for the 3 prior tax years at or below the inflation-adjusted amount. See Useful Items earlier, for guidance on the inflation-adjusted amounts.

For the calculation of gross receipts for an overall accounting method change request, whether an applicant qualifies as a small business taxpayer for purposes of applying sections 263A and 471, or whether an applicant qualifies as an eligible small business under section 474(c), see section 448(c) and Regulations section 1.448-2(c), and, as applicable, Regulations section 1.263A-1(b)(1)(j) or Regulations section 1.471-1(a)(2).

For the calculation of gross receipts for determining whether the applicant has an exempt construction contract under Regulations section 1.460-3(b), for contracts entered into after December 31, 2017, in tax years ending after December 31, 2017, see section 448(c) and Regulations sections 1.448-2(c) and 1.460-3(b)(3).