SECTION 2. BACKGROUND

.01 The American Jobs Creation Act of 2004, Pub. L. No. 108–357, 118 Stat. 1418 (the “Act”), enacted on October 22, 2004, added new section 6603 to the Code to permit a taxpayer to make a deposit with the Internal Revenue Service to suspend the running of interest under section 6601 on a potential underpayment of tax. A deposit may be made with respect to certain underpayments of tax that have not been assessed at the time of the deposit.

.02 Section 6603(a) provides that a taxpayer may make a deposit with the Service that may be used by the Secretary to pay any income, gift, estate, or generation-skipping taxes imposed on the taxpayer under the Code, or certain excise taxes imposed on the taxpayer under the Code. Section 6603(b) provides that, to the extent that a deposit is used by the Service to pay tax, the tax shall be treated as

.02 Sections 1.263(a)–4(p) and 1.263(a)–5(n) provide that a taxpayer seeking to change to a method of accounting provided in the final regulations must secure the consent of the Commissioner in accordance with the requirements of § 1.446–1(e). In addition, §§ 1.263(a)–4(p) and 1.263(a)–5(n) provide that, for the taxpayer’s first taxable year ending on or after December 31, 2003, the taxpayer is granted the consent of the Commissioner to change to a method of accounting provided in the final regulations, provided the taxpayer follows the administrative procedures issued under § 1.446–1(e)(3)(ii) for obtaining the Commissioner’s automatic consent to a change in accounting method (for further guidance, for example, see Rev. Proc. 2002–9). .03 Rev. Proc. 2004–23, 2004–16 I.R.B. 785, provides the exclusive administrative procedures under which a taxpayer may obtain automatic consent for the taxpayer’s first taxable year ending on or after December 31, 2003, to change to a method of accounting provided in the final regulations.

.04 Rev. Proc. 2005–9 provides procedures similar to those contained in Rev. Proc. 2004–23 under which a taxpayer may obtain automatic consent for the taxpayer’s second taxable year ending on or after December 31, 2003. Unlike Rev. Proc. 2004–23, Rev. Proc. 2005–9 does not waive the scope limitations contained in Rev. Proc. 2002–9, including the 5-year prior change scope limitation contained in section 4.02(6) of Rev. Proc. 2002–9.

.05 Section 4.02(6) of Rev. Proc. 2002–9 provides, in part, that the automatic consent procedures of Rev. Proc. 2002–9 do not apply if the taxpayer, within the last five years (including the year of change), (a) has made a change in the same method of accounting (with or without obtaining the Commissioner’s consent), or (b) has applied to change the same method of accounting without effecting the change (whether, for example, the application to change was withdrawn, not perfected, not granted, or denied).

.06 Because Rev. Proc. 2005–9 does not waive the scope limitations contained in Rev. Proc. 2002–9, some taxpayers are ineligible to obtain automatic consent to make a change under Rev. Proc. 2005–9 for the second taxable year ending on or

after December 31, 2003, because, for example, the taxpayer withdrew a previous application to change within the preceding 5 years or because the taxpayer’s previous application was denied.