SECTION 17. PREPAID

SUBSCRIPTION INCOME (§ 455)

.01 Prepaid subscription income . (1) Description of change . This change applies to an accrual method taxpayer that wants to change its method of accounting for prepaid subscription income to the method described in § 455 and the regulations thereunder, including an eligible taxpayer that wants to make the “within 12 months” election under § 1.455–2.

(2) Manner of making change and designated automatic accounting method change number .

(a) This change is made on a cut-off basis and applies only to prepaid subscription income received on or after the beginning of the year of change. Any prepaid subscription income received prior to the year of change is accounted for under the taxpayer’s former method of accounting. See section 2.06 of this revenue procedure for more information regarding a cut-off basis. Accordingly, a § 481(a) adjustment is neither permitted nor required.

(b) In accordance with § 1.446–1(e)(3)(ii), the requirement of § 1.446–1(e)(3)(i) to file an application on Form 3115 is waived and a statement in lieu of the Form 3115 is authorized for this change. The statement must set forth:

(i) the designated automatic accounting method change number for this change, which is “132”;

(ii) the taxpayer’s name and employer identification number (or social security number in the case of an individual);

(iii) the year of change (both the beginning and ending dates);

(iv) the information described in § 1.455–6(a), as required by § 1.455–6(b);

(v) if the taxpayer wants to make a “within 12 months” election under § 1.455–6(c), the information described in section § 1.455–6(c)(2).

(c) The consent granted under this revenue procedure satisfies the consent required under § 455(c)(3) and § 1.455–6(b).

2011–4 I.R.B. 402 January 24, 2011