The IRS issued proposed and temporary regulations changing the due date for requests to change accounting methods. Previously, a taxpayer that wanted to change an accounting method needed to file a Form 3115, Application for Change in Accounting Method, within the first 180 days of the year the change was to take effect. In addition, the taxpayer could request a 90-day extension of that due date.

Effective for change requests filed on or after May 15, 1997, the new rules permit the taxpayer to request a change in accounting method at any time during the year of change. However, the rules pertaining to extensions have been tightened considerably. Extensions will now only be granted "in unusual and compelling circumstances."

In addition to this due date change, the IRS has issued a new revenue procedure governing accounting method changes. The new procedure supercedes, in part, Rev. Proc. 92-20, which sets out general procedures governing accounting method changes. The new procedure greatly simplifies the 1992 procedure. For example, Category A, Category B, Designated A, and Designated B accounting method classifications are eliminated. Also eliminated are the 90-day window at the beginning of
an examination. The 30-day window for taxpayers under continuous examination is extended to 90 days. The definition of "under examination" is clarified. Finally, the various adjustment periods under IRC Section. 481 are replaced with a single four-year period for both positive and negative adjustments. *