SECTION 2. BACKGROUND

.01 Rev. Proc. 2006–12 provides procedures under which a taxpayer may obtain automatic consent to change to a method of accounting provided in the final regulations for a taxable year ending on or after December 31, 2005, and for any earlier taxable year that is after the taxpayer’s second taxable year ending on or after December 31, 2003. Rev. Proc. 2006–12 modified and amplified Rev. Proc. 2002–9, 2002–1 C.B. 327, as modified and clarified by Announcement 2002–17, 2002–1 C.B. 561, modified and amplified by Rev. Proc. 2002–19, 2002–1 C.B. 696, and amplified, clarified and modified by Rev. Proc. 2002–54, 2002–2 C.B. 432, to include the changes to methods of accounting provided in the final regulations that are within the scope of Rev. Proc. 2006–12.

.02 Section 6.02 of Rev. Proc. 2006–12 provides, in part, that if a taxpayer seeks to change to a method of accounting utilizing the 3 ¹ /2 month rule or the recurring item exception for the item for which the taxpayer also seeks to change to a method provided in the final regulations, the taxpayer must file two separate applications for change in accounting method — one for a change in method of accounting under Rev. Proc. 2006–12 to the method of accounting provided in the final regulations and the other for a change in method of accounting under Rev. Proc. 97–27 to a method of accounting utilizing the 3 ¹ /2 month rule or the recurring item exception.