SECTION 30. ORIGINAL ISSUE

DISCOUNT (§§ 1272, 1273).

01 De minimis original issue discount (OID)

(1) Description of change . This change applies to a taxpayer that wants to change to the principal-reduction method of accounting described in section 5 of Rev. Proc. 97-39, 1997-2 C. B. 485. The principal-reduction method of accounting is an aggregate method of accounting for de

minimis OID (discount) on certain loans originated by the taxpayer .

(2) 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 . (3) Description . The principal-reduction method of accounting is a permissible method for use by taxpayers to account for discount on one or more categories of loans described in section 4 .02 or 4 .03 of Rev . Proc . 97-39 . If the principal-reduction method is used to account for any loans in a category of loans, the method must be used for the entire category of loans . The principal-reduction method applies only to loans described in section 3 of Rev . Proc . 97-39 . (4) Manner of making change . (a) This change is made on a cut-off basis and applies only to loans described in section 3 of Rev . Proc . 97-39 that were acquired on or after the beginning of the year of change . Accordingly, a § 481(a) adjustment is neither permitted nor required .

(b) The taxpayer must maintain books and records sufficient to satisfy the director that old and new loans have been adequately segregated .

(5) Additional requirements . On a statement attached to the Form 3115, the taxpayer must:

(a) identify the categories of loans to which the proposed method will apply; and

(b) describe any “additional categories” permitted under section 4 .03 of Rev . Proc . 97-39 .

(6) No audit protection . A taxpayer does not receive audit protection under section 8 .01 of Rev . Proc . 2015-13 in connection with this change . See section 8 .02(2) of Rev . Proc . 2015-13 . (7) Designated automatic accounting method change number . The designated automatic accounting method change number for a change under this section 30 .01 is “72 .” (8) Contact information . For further information regarding a change under this section, contact K . Scott Brown at (202) 317-4423 (not a toll-free number) . .02 Proportional method of accounting for OID on a pool of credit card receiv- ables .

(1) Description of change . This change applies to a taxpayer that wants to change to the proportional method of accounting for OID on a pool of credit card receivables as described in Rev . Proc . 201326, 2013-22 I.R.B. 1160, as modified by Rev . Proc . 2021-35, 2021-35 I .R .B . 355, to reflect changes made to the treatment of certain credit card fees by § 451(b), as amended by Public Law 115-97, 131 Stat . 2054 (Dec . 22, 2017), commonly referred to as the Tax Cuts and Jobs Act (TCJA), and §§ 1 .451-3 and 1 .1275-2(l) . The proportional method of accounting applies to OID and certain amounts that would not otherwise be treated as OID (for example, market discount or bond premium) . Under § 1 .1275-2(l), OID does not include items that are subject to the timing rules in § 1 .451-3, such as credit card late fees, credit card cash advance fees, and interchange fees (specified credit card fees) . Therefore, items subject to the timing rules in § 1 .451-3, such as specified credit card fees, are excluded from the proportional method . See section 16 .08 of this revenue procedure for the procedures by which a taxpayer, including a taxpayer using the proportional method of accounting, can change its method of accounting for specified credit card fees to comply with § 451(b), as amended by the TCJA, and §§ 1 .451-3 and 1 .1275-2(l) .

(2) Manner of making change . (a) This change is made on a cut-off basis . Accordingly, a § 481(a) adjustment is neither required nor permitted .

(b) The unaccrued OID for the pool as of the beginning of the first period in the year of change is equal to the unaccrued OID for the pool as of the end of the preceding taxable year under the taxpayer’s previous method of accounting for OID on the pool, reduced by any amounts representing charges or fees that are not properly treated as OID (for example, specified credit card fees) .

(3) Designated automatic accounting method change number . The designated automatic accounting method change number for a change under this section 30 .02 is “183 .” (4) Contact information . For further information regarding this section, please contact Chris Lieu at (202) 317-6945 (not a toll-free number) .

Bulletin No. 2025–24 1589 June 9, 2025