SECTION 5. ACCOUNTING — Internal Revenue Bulletin 2018-50

Statute or Regulation Act Postponed

Chapter 1, Subchapter E of Any act relating to the adoption, election, retention, or change of any accounting the Code method or accounting period, or to the use of an accounting method or accounting

period, that is required to be performed on or before the due date of a tax return (including extensions). Examples of such acts include (a) the requirements in Rev. Procs. 2006–45, 2006–45 I.R.B. 851, 2006–46, 2006–45 I.R.B. 859, 2002–39, 2002–1 C.B. 1046, and 2003–62, 2003–2 C.B. 299, that Form 1128, Application to Adopt, Change, or Retain a Tax Year, be filed with the Director, Internal Revenue Service Center, on or before the due date (or the due date including extensions) of the tax return for the short period required to effect the change in accounting period; and (b) the requirement in Rev. Proc. 2015–13, 2015–5 I.R.B. 419, section 6.03(1), as amended by Rev. Proc. 2018–1, 2018–1 I.R.B. 1, section 9.05(2), that an Application for Change in Accounting Method (Form 3115) must be filed with the timely filed (including extensions) original tax return for the year of the accounting method change and that a duplicate copy of the Form 3115 must be filed with the IRS in Covington, Kentucky, no later than when the original Form 3115 is filed.

Sec. 1.381(c)(4)–1(d)(2) If the acquiring corporation is not permitted to use the method of accounting previously used by it, the method of accounting used by the distributor/transferor corporation, or the principal method of accounting, or if the acquiring corporation wishes to use a new method of accounting, then the acquiring corporation must apply to the Commissioner to use another method. Section 1.381(c)(4)–1(d)(2)(iii) provides that applications are due by the later of (1) the due date for filing the application as specified in § 1.446–1(e), or (2) the earlier of (a) the day that is 180 days after the date of distribution or transfer, or (b) the day on which the acquiring corporation files its federal income tax return for the taxable year in which the distribution or transfer occurred.
Sec. 1.381(c)(5)–1(d)(2) If the acquiring corporation is not permitted to use the inventory method previously used by it, or the inventory method used by the distributor/transferor corporation, or the principal inventory method of accounting, or wishes to use a new inventory method of accounting, then the acquiring corporation must apply to the Commissioner to use another method. Section 1.381(c)(5)–1(d)(2)(iii) provides that applications are due by the later of (1) the due date for filing the application as specified in § 1.446–1(e), or (2) the earlier of (a) the day that is 180 days after the date of distribution or transfer, or (b) the day on which the acquiring corporation files its federal income tax return for the tax year in which the distribution or transfer occurred.
Sec. 1.442–1(b)(1) In order to secure prior approval of an adoption, change, or retention of a taxpayer’s annual accounting period, the taxpayer generally must file an application on Form 1128, Application to Adopt, Change, or Retain a Tax Year, with the Commissioner within such time as is provided in administrative procedures published by the Commissioner from time to time. See, for example, Rev. Proc. 2006–45, 2006–2 C.B. 851; Rev. Proc. 2006–46, 2006–2 C.B. 859; Rev. Proc. 2003–62, 2003–2 C.B. 299; and Rev. Proc. 2002–39, 2002–1 C.B.

December 10, 2018 992 Bulletin No. 2018–50

Statute or Regulation Act Postponed

Sec. 1.444–3T(b)(1) A section 444 election must be made by filing Form 8716, Election to Have a Tax Year Other Than a Required Tax Year, with the Service Center. Generally, Form 8716 must be filed by the earlier of (a) the 15th day of the fifth month following the month that includes the first day of the taxable year for which the election will first be effective, or (b) the due date (without regard to extensions) of the income tax return resulting from the section 444 election.
Sec. 1.446–1(e)(2)(i) Section 6.03(1) of Rev. Proc. 2015–13 requires a taxpayer that is changing a method of accounting within the terms of the revenue procedure pertaining to automatic method changes to attach the application form to the timely filed return for the year of change. Section 6.03(4)(a) of Rev. Proc. 2015–13 grants an automatic extension of six months from the due date of the return (excluding extensions) within which to file an amended return with the application for the change following a timely filed original return (including extensions) for the year of change.
Sec. 1.446–1(e)(3)(i) To secure the Commissioner’s consent to a change in method of accounting that is not an automatic method change, the taxpayer must file an application on Form 3115, Application for Change in Accounting Method, with the Commissioner during the taxable year in which the taxpayer desires to make the change in method of accounting (i.e., must be filed by the last day of such taxable year). This filing requirement is also in Rev. Proc. 2015–13, section 6.03(2).
Sec. 451(g) Section 451(g) permits a taxpayer using the cash receipts and disbursements method of accounting who derives income from the sale or exchange of livestock in excess of the number he would sell if he followed his usual business practices to elect (which election is deemed valid if made within the period described in section 1033(e)(2)) to include such income for the taxable year following the taxable year of such sale or exchange if, under his usual business practices, the sale or exchange would not have occurred if it were not for drought, flood, or other weather–related conditions and that such conditions resulted in the area being designated as eligible for Federal assistance.
Sec. 1.7519–2T(a)(1)–(4) A partnership or S corporation must file a Form 8752, Required Payment or Refund Under Section 7519, if the taxpayer has made an election under section 444 to use a taxable year other than its required taxable year and the election is still in effect. The Form 8752 must be filed and any required payment must be made by the date stated in the instructions to Form 8752.
Rev. Proc. 92–29, 1992–1 A developer of real estate requesting the Commissioner’s consent to use the C.B. 748, Section 6.02 alternative cost method must file a private letter ruling request within 30 days after

the close of the taxable year in which the first benefited property in the project is sold. The request must include the information described in section 6.04 of the revenue procedure and a consent extending the period of limitation on the assessment of income tax with respect to the use of the alternative cost method.