SECTION 4. BAD DEBTS (§ 166)

.01 Change from reserve method to specific charge-off method .

(1) Description of change . This change applies to a taxpayer (other than a bank as defined in § 585(a)(2)) that wants to change its method of accounting for bad debts from a reserve method (or other improper method) to a specific charge-off method that complies with § 166. For procedures applicable to banks, see § 585(c) and the regulations thereunder and section 24 of this revenue procedure.

(2) Designated automatic accounting method change number . The designated automatic accounting method change number for a change under this section 4.01 is “5.” (3) Contact information . For further information regarding a change under this section, contact Renay France at (202) 317-7003 (not a toll-free number). .02 Conformity election by bank after previous election automatically revoked .

(1) Description of change . This change applies to a bank that wants to change its method of accounting for bad debts by making the conformity election under § 1.166–2(d)(3)(iii)(C)( 3 ).

(2) Applicability . This change only applies to a bank (as defined in § 1.166– 2(d)(4)(i)) that: (a) is subject to supervision by Federal authorities, or by state authorities maintaining substantially equivalent standards;

(b) has previously adopted or elected to change to the method of accounting for bad debts described in § 1.166–2(d)(3);

(c) has had that previous election automatically revoked under § 1.166– 2(d)(3)(iv)(C); (d) meets the express determination requirement of § 1.166–2(d)(3)(iii)(D) for the year of change; and

(e) now seeks the consent of the Commissioner to make an election under § 1.166–2(d)(3)(iii)(C)( 3 ).

(3) Certain eligibility rule inapplica- ble . The eligibility rule in section 5.01(1)(f) of Rev. Proc. 2015–13, 2015–5 I.R.B. 419, does not apply to this change.

(4) Designated automatic accounting method change number . The designated automatic accounting method change number for a change under this section 4.02 is “211.” (5) Contact information . For further information regarding a change under this section, contact Timothy Sebastian at (202) 317-6945 (not a toll-free number).