SECTION 5. CHANGE IN METHOD

OF ACCOUNTING

.01 Consent. A general asset account election for any item of property that is made pursuant to this revenue procedure is a change in method of accounting. Under § 1.446–1(e)(2)(i), the consent of the Commissioner is hereby granted to make this method change by any tax

payer for any item of property for which a general asset account election is made pursuant to this revenue procedure. This consent is granted for the taxpayer’s year of change. The consent is conditioned, however, on the taxpayer’s complying with this revenue procedure. If the taxpayer does not comply with this revenue procedure, the taxpayer will be deemed to have initiated a change in method of accounting without obtaining the consent of the Commissioner required under § 446(e).

.02 No § 481(a) adjustment. Because the adjusted basis of the property is not changed by the general asset account election, the method change is made on a cut-off basis and, thus, no adjustment under § 481(a) is required or permitted.

.03 Manner of making method change.

(1) Complete and file a current Form 3115. The general asset account election under this revenue procedure is made on the taxpayer’s timely filed original federal income tax return (including extensions) for the year of change or on an amended return for the year of change filed no later than December 20, 1997. The election is made by attaching a completed, current Form 3115 to the taxpayer’s original or amended return for the year of change. The requirement to file a Form 3115 during the taxable year in which the taxpayer desires to make the proposed change is waived in accordance with § 1.446–1(e)(3)(ii).

(2) No user fee. No user fee is required for a Form 3115 filed under this revenue procedure. Any user fee that is submitted with any Form 3115 requesting permission to make a general asset account election under this revenue procedure will be returned to the taxpayer.

.04 No protection from examination changes. A general asset account election under this revenue procedure does not change the taxpayer’s present method of computing depreciation allowances for the property subject to the election and, consequently, examination protection is not provided. Therefore, for any taxable year before the year of change, a taxpayer that receives consent to make a general asset account election under this revenue procedure does not thereby obtain protection from examination changes for the property included in the general asset account.

Effective: April 16, 1997.

Authority: To issue Taxpayer Assistance Orders (TAOs), other than TAOs involving a principal residence, under IRC § 7811, as amended by § 102 of Public Law 104–168 (Taxpayer Bill of Rights 2).

Delegated to: Assistant Commissioner (International); Regional Commissioners; District Directors and Assistant Directors; Service Center Directors and Assistant Directors; Regional, Service Center, District, and International Taxpayer Advocates.

Redelegation: This authority may be redelegated to an Associate Taxpayer Advocate.

Authority: To issue Taxpayer Assistance Orders (TAOs), under IRC § 7811, to release a principal residence of a taxpayer levied upon or to cease any action regarding a principal residence.

Delegated to: Regional Commissioners, Assistant Commissioner (International), and the Regional and International Taxpayer Advocates.

Redelegation: This authority may not be redelegated.

The authority to modify or rescind a TAO is limited by IRC § 7811(c), as amended by § 102(b) of Public Law 104–168, to only the Commissioner, Deputy Commissioner, and Taxpayer Advocate.