SECTION 6. CHANGE IN METHOD

OF ACCOUNTING

.01 In General. A change in a taxpayer’s treatment of track structure expenditures to the track maintenance allowance method is a change in method of accounting to which §§ 446 and 481 apply.

.02 Issue Not Under Consideration . If a taxpayer within the scope of this revenue procedure wants to change to the track maintenance allowance method for either its first or second taxable year ending on or after December 31, 2001, (“year of change”) and the treatment of its track structure expenditures is not an issue under consideration in examination, before an area appeals office, or before a federal court (within the meaning of section 3.09 of Rev. Proc. 2002–9, 2002–3 I.R.B. 327) on September 30, 2002, the taxpayer must follow the automatic change in method of accounting provisions in Rev. Proc. 2002–9 (or its successor) with the following modifications:

(1) The scope limitations in section 4.02 of Rev. Proc. 2002–9 do not apply. (2) A taxpayer that wants to change to the track maintenance allowance method for its first taxable year ending on or after December 31, 2001, and that, on or before November 29, 2002, files its original federal income tax return for its first taxable year ending on or after December 31, 2001, is not subject to the filing requirements in section 6.02(3)(a) of Rev. Proc. 2002–9, provided that it complies with the following filing requirements. The taxpayer must complete and file a Form 3115 in duplicate. The original must be attached to the taxpayer’s amended federal income tax return for its first taxable year ending on or after December 31, 2001. This amended return must be filed no later than June 30, 2003. A copy of the Form 3115 must be filed with the national office (see section 6.02(6)(a) of Rev. Proc. 2002–9 for the address) no later than when the taxpayer’s amended return is filed.

(3) To assist the Service in processing changes in method of accounting under this section of the revenue procedure, and to ensure proper handling, section 6.02(4) of Rev. Proc. 2002–9 is modified to require that a Form 3115 filed under this revenue procedure include the statement: “Automatic Change Filed Under Rev. Proc. 2002–65.” This statement should be legibly printed or typed at the top of any Form 3115 filed under this revenue procedure. .03 Issue Under Consideration. If a taxpayer within the scope of this revenue procedure wants to change to the track maintenance allowance method for either

its first or second taxable year ending on or after December 31, 2001, (“year of change”) and the treatment of its track structure expenditures is an issue under consideration in examination, before an area appeals office, or before a federal court (within the meaning of section 3.09 of Rev. Proc. 2002–9) on September 30, 2002, the taxpayer must follow the automatic change in method of accounting provisions in Rev. Proc. 2002–9 with the following modifications:

(1) The scope limitations in section 4.02 of Rev. Proc. 2002–9 do not apply. (2) A taxpayer that wants to change to the track maintenance allowance method for its first taxable year ending on or after December 31, 2001, and that, on or before November 29, 2002, files its original federal income tax return for its first taxable year ending on or after December 31, 2001, is not subject to the filing requirements in section 6.02(3)(a) of Rev. Proc. 2002–9, provided that it complies with the following filing requirements. The taxpayer must complete and file a Form 3115 in duplicate. The original must be attached to the taxpayer’s amended federal income tax return for its first taxable year ending on or after December 31, 2001. This amended return must be filed no later than June 30, 2003. A copy of the Form 3115 must be filed with the national office (see section 6.02(6)(a) of Rev. Proc. 2002–9 for the address) no later than when the taxpayer’s amended return is filed.

(3) To assist the Service in processing changes in method of accounting under this section of the revenue procedure,

2002–41 I.R.B. 704 October 15, 2002

.03 Work papers or reports that identify the amount of removal costs.