Automatic accounting method changes list updated by IRS

In Rev. Proc. 2025-23, the IRS on Monday provided a comprehensive, updated list of changes in tax accounting methods to which the automatic change procedures in Rev. Proc. 2015-13, as subsequently modified, apply.

Rev. Proc. 2015-13 itself updated and revised prior general procedures under Sec. 446(e) to obtain the IRS’s automatic and advance nonautomatic consent to change a method of accounting. It has since been modified and clarified by Rev. Proc. 2015-33 and modified by Rev. Procs. 2021-34, 2021-26, 2017-59, and 2016-1.

The method changes in Rev. Proc. 2025-23 are arranged in 32 sections by Code section, covering a broad array of tax accounting methods.

The revenue procedure makes 17 significant changes to the list of automatic changes in Rev. Proc. 2024-23. In each case, the method change is described, including its applicability. The description may also include conditions of inapplicability and additional requirements. Each method change is given a designated automatic accounting method change number for use in completing Form 3115, Application for Change in Accounting Method.

For example, several paragraphs relating to the Sec. 481(a) adjustment are clarified by adding the phrase “for any taxable year in which the election was made” to the second sentence. And three significant changes involve changing methods from accrual to cash or cash to accrual, including Rev. Proc. 2025-23, Section 15.12, relating to farmers changing to the cash method. That section is clarified to provide that the change under Section 15.12 is only applicable to a taxpayer’s trade or business of farming and not applicable to a nonfarming trade or business the taxpayer might be engaged in.

Rev. Proc. 2025-23 is generally effective for Forms 3115 filed on or after June 9, 2025, for a year of change ending on or after Oct. 31, 2024, that is filed under the automatic change procedures of Rev. Proc. 2015-13, as clarified and modified.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.