SECTION 10. REVIEW BY NATIONAL

OFFICE

.01 In general. Any application filed under this revenue procedure may be reviewed by the national office. If the application is reviewed by the national office, the procedures in sections 10.02 through 10.04 of this revenue procedure apply.

.02 Incomplete application—21 day rule. If the Service reviews an application and determines that the application is not properly completed in accordance with the instructions of the Form 3115 or the provisions of this revenue procedure, or if supplemental information is needed, the Service will notify the taxpayer. The notification will specify the information that needs to be provided, and the taxpayer will be permitted 21 days from the date of the notification to furnish the necessary information. The Service reserves the right to impose shorter reply periods if subsequent requests for additional information are made. An extension of the 21day period to furnish information, not to exceed 15 days, may be granted to a taxpayer. A request for an extension of the 21-day period must be made in writing and submitted within the 21-day period. If the extension request is denied, there is no right of appeal.

.03 Conference in the national office. If the national office tentatively determines that the taxpayer has changed its method of accounting without complying with all the applicable provisions of this revenue procedure (for example, the taxpayer changed to a method of accounting that varies from the applicable accounting method described in this revenue procedure or the taxpayer is outside the scope of this revenue procedure), the national office will notify the taxpayer of its tentative adverse determination and will offer the taxpayer a conference of right, if the taxpayer has requested a conference. For conference procedures for taxpayers other than exempt organizations, see section 11 of Rev. Proc. 98–1 (or any successor). For conference procedures for exempt organizations, see section 12 of Rev. Proc. 98–4, 1998–1 I.R.B. 113 (or any successor).

(1) Change in method of accounting for depreciation. For a change in method of accounting described in section 2.01 or 2.02 of the APPENDIX of this revenue procedure, this revenue procedure is effective for applications or copies of applications filed with the national office on or after December 21, 1998.

(2) Change in method of accounting to discontinue the mark-to-market method of accounting. For a change in method of accounting described in section 10A.01 of the APPENDIX of this revenue procedure, this revenue procedure is effective for the taxpayer’s first taxable year ending after July 22, 1998.

(3) Change in method of accounting for a pool of debt instruments. For a change in method of accounting described in section 12.02 of the APPENDIX of this revenue procedure, this revenue procedure is effective for the taxpayer’s first taxable year beginning after August 5, 1997.

procedure and the change in method of accounting is within the scope of this revenue procedure.

.02 Transition rules. If a taxpayer filed an application or ruling request with the national office to make a change in method of accounting authorized by this revenue procedure, and the application or ruling request is pending with the national office on December 21, 1998, the taxpayer may make the change under this revenue procedure. However, the national office will process the application or ruling request in accordance with the authority under which it was filed, unless prior to the later of February 1, 1999, or the issuance of the letter ruling granting or denying consent to the change, the taxpayer notifies the national office that it wants to make the change under this revenue procedure. If the taxpayer timely notifies the national office that it wants to make the method change under this revenue procedure, the national office will require the taxpayer to make appropriate modifications to the application or ruling request to comply with the applicable provisions of this revenue procedure. In addition, any user fee that was submitted with the application or ruling request will be returned to the taxpayer.

.03 Special rules.

.04 National office determination.

(1) Consent not granted. Except as

provided in section 10.04(2) of this revenue procedure, if the national office determines that a taxpayer has changed its method of accounting without complying with all the applicable provisions of this revenue procedure, the national office will notify the taxpayer that consent to make the change in method of accounting is not granted. See section 6.06 of this revenue procedure.

(2) Application changed. If the national office determines that a taxpayer has changed its method of accounting without complying with all the applicable provisions of this revenue procedure, the national office, in its discretion, may allow the taxpayer (a) to make appropriate adjustments to conform its change in method of accounting to the applicable provisions of this revenue procedure, and (b) to make conforming amendments to any federal income tax returns filed for the year of change and subsequent taxable years. Any application changed under section 10.04(2) of this revenue procedure is subject to review by the district director as provided in section 9 of this revenue procedure.