SECTION 5. PROCEDURES FOR

TAXPAYERS NOT UNDER EXAMINATION

.01 Submission of application .

(1) In general.

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(a) A Form 3115 must be filed during the year of change, as provided in § 1.446–1T(e)(3)(i). If the taxable year is a short period, the Form 3115 must be filed no later than the last day of the short taxable year.

(b) The Service recommends that the Form 3115 be filed as early as possible during the year of change to provide the Service adequate time to respond to the Form 3115 prior to the original due date of the taxpayer’s return for the year of change.

(2) Limited relief for late applica- tion . A taxpayer that fails to file a Form 3115 during the year of change as provided in section 5.01(1) of this revenue procedure will not be granted an extension of time to file under § 301.9100 of the Procedure and Administration Regulations, except in unusual and compelling circumstances. See § 301.9100–3T(c)(2)(i).

.02 Terms and conditions of change .

(1) In general . Except as specifically provided in other published guidance, an accounting method change filed under this revenue procedure, if granted, must be made pursuant to the terms and conditions provided in this revenue procedure (including sections 8.02 and 13.02 of this revenue procedure). (2) Year of change . The year of change is the taxable year with respect to which the Form 3115 is timely filed under section 5.01 of this revenue procedure. However, Rev. Proc. 93–48 (regarding notional principal contracts) is an example of other published guidance that provides for a different year of change.

(3) Section 481(a) adjustment pe- riod .

(a) In general . Except as provided in sections 5.02(3)(b) and 7.03 of this revenue procedure, the § 481(a) adjustment period for positive and negative § 481(a) adjustments is four taxable years.

(b) Changes within the LIFO method . Any change within the LIFO inventory method must be made using a cut-off method. However, Announcement 91–173, 1991–47 I.R.B. 29 (regarding LIFO taxpayers changing their method of accounting for certain bulk bargain purchases of inventory to comply with Hamilton Industries, Inc. v. Commissioner, 97 T.C. 120 (1991)) is an example of other published guidance that requires a § 481(a) adjustment. (4) NOL carryback limitation for taxpayer subject to criminal investiga- tion . Generally, no portion of any net

operating loss that is attributable to a negative § 481(a) adjustment may be carried back to a taxable year prior to the year of change that is the subject of any pending or future criminal investigation or proceeding concerning (a) directly or indirectly, any issue relating to the taxpayer’s federal tax liability, or (b) the possibility of false or fraudulent statements made by the taxpayer with respect to any issue relating to its federal tax liability.

(5) Change treated as initiated by the taxpayer . For purposes of § 481, an accounting method change filed under this revenue procedure, if granted, is a change in method of accounting initiated by the taxpayer.