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SECTION 3. SCOPE

Internal Revenue Bulletin 1998-15 · 2026-10-03 edition · updated 2026-10-04 · United States

.01 Applicability. This revenue procedure applies to a taxpayer requesting the Commissioner’s consent to change to a method of accounting for estimating inventory shrinkage in computing ending inventory, using:

(1) the retail safe harbor method, regardless of whether the taxpayer’s present method of accounting estimates inventory shrinkage; or

(2) a method other than the retail safe harbor method, provided (a) the taxpayer’s present method of accounting does not estimate inventory shrinkage, and (b) the taxpayer’s new method of accounting (that estimates inventory shrinkage) clearly reflects income under § 446(b).

.02 Inapplicability. This revenue procedure does not apply to a taxpayer requesting to change to a method other than the retail safe harbor method of accounting for estimating inventory shrinkage in computing ending inventory, if the taxpayer’s present method of accounting estimates inventory shrinkage. A taxpayer requesting such a change must file a Form

3115, Application for Change in Accounting Method, with the Commissioner in accordance with the requirements of §1.446–1(e)(3)(i) and Rev. Proc. 97–27, 1997–21 I.R.B. 10.

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▸Contents — Internal Revenue Bulletin 1998-15
Internal Revenue Bulletin 1998-15

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