SECTION 2. BACKGROUND

.01 Section 1.446–1(e) provides the general rules for filing an application to obtain the Commissioner’s consent to change a method of accounting for federal income tax purposes. Under § 1.446–1(e)(3)(i), as amended by T.D. 8719, 1997–1 C.B. 100, an application must be filed during the taxable year in which the taxpayer desires to make the change in method of accounting. Prior to the amendment, § 1.446–1(e)(3)(i) provided that an application must be filed within 180 days after the beginning of the tax year in which the proposed change is requested to be made.

.02 Notwithstanding the provisions of § 1.446–1(e)(3)(i), § 1.446–1(e)(3)(ii) authorizes the Commissioner to prescribe administrative procedures setting forth the terms and conditions under which taxpayers will be permitted to change their method of accounting.

.03 The following regulations concerning a change in method of accounting each contain a requirement that an application or request for consent must be filed within a 90-day period:

(1) Section 1.77–1 provides that a taxpayer who previously elected to include the amount of loans from the Commodity Credit Corporation in gross income for the taxable year in which the loans are received must obtain permission to change to a different method of accounting for the loans. An application for permission to change to a different method of accounting must be submitted within 90 days after the beginning of the taxable year in which the taxpayer proposes to make the change.

(2) Section 1.381(c)(4)–1(d)(2) provides that, under § 1.381(c)(4)–1(d)(1), an acquiring corporation may submit an application for permission to use a method of accounting, or a request for a determination of the method of accounting to be used, not later than 90 days after the date of distribution or transfer.

(3) Section 1.381(c)(5)–1(d)(2) provides that, under § 1.381(c)(5)–1(d)(1), an acquiring corporation may submit an application for permission to use a method of taking inventories, or a request for a determination of the method of taking in

2005–36 I.R.B. 491 September 6, 2005

26 CFR 601.105: Examination of returns and claims for refund, credit or abatement; determination of tax liability

Rev. Proc. 2005–64