SECTION 1. PURPOSE

This revenue procedure allows a taxpayer to use a safe harbor method of accounting for original issue discount (“OID”) on a pool of credit card receivables for purposes of § 1272(a)(6) of the Internal Revenue Code—the “proportional method.” The proportional method generally allocates to an accrual period an amount of unaccrued OID that is proportional to the amount of the stated redemption price at maturity (“principal”) of the pool that is paid by cardholders during the period. Under certain assumptions, the proportional method as described in this revenue procedure generally produces the same results as an implementation of the method described in § 1272(a)(6). The revenue procedure also describes the exclusive procedures by which a taxpayer may obtain the Commissioner’s consent to change to the proportional method.