SEC. 4. SCOPE

.01 Except as provided in sections 4.02, 4.03, or 4.04 below, this revenue procedure applies to:

(1) a small reseller of personal property changing from a permissible UNICAP method to a permissible nonUNICAP inventory capitalization method in any taxable year that it qualifies as a small reseller;

(2) a formerly small reseller changing from a permissible nonUNICAP inventory capitalization method to a permissible UNICAP method in the first taxable year that it does not qualify as a small reseller;

(3) a reseller-producer changing from a permissible UNICAP method for both its production and resale activities to a simplified resale method in any taxable year that it qualifies under § 1.263A–3(a)(4) to use a simplified resale method for both its production and resale activities; and

(4) a reseller-producer changing from a simplified resale method for both its production and resale activities to a permissible UNICAP method for both its production and resale activities in the first taxable year that it does not qualify under § 1.263A–3(a)(4) to use a simplified resale method for both its production and resale activities.

.02 This revenue procedure does not apply to a taxpayer making a historic absorption ratio election under § 1.263A–2(b)(4) or 1.263A–3(d)(4). See Rev. Proc. 95–25, 1995–1 C.B. 701, for a taxpayer making a historic absorption ratio election during the three-year transition period for taxable years beginning on or after January 1, 1994. .03 This revenue procedure does not apply to any change in accounting method, except to the extent necessary to effect the changes described in section 4.01 of this revenue procedure. See Rev. Proc. 92–20 for the general rules regarding changes in accounting methods.

.04 This revenue procedure does not apply to a taxpayer that is the subject of a pending criminal investigation or proceeding concerning (1) any issue directly or indirectly related to the taxpayer’s federal tax liability for any taxable year, or (2) the possibility of false or fraudulent statements made by the taxpayer regarding any issue related to its federal tax liability for any taxable year, unless the taxpayer obtains the written consent of Criminal Investigation to change its method under this revenue procedure. The taxpayer must attach the written consent from Criminal Investigation to its Form 3115 required by section 5.02.