IRS Modifies Procedures for Accounting Changes for Tangible Property

The Internal Revenue Service has released new procedures when changing the method of accounting for dispositions of tangible depreciable property.

Revenue Procedure 2014-17 supersedes Rev. Proc. 2012-20 and provides the procedures by which a taxpayer may obtain the IRS’s automatic consent to change the method of accounting.

The IRS released a long-awaited set of regulations last year for repairs of tangible property, also known as the repair regulations (see IRS Releases Final Tangible Property Repair Regulations). In January, as a follow-up, it modified the procedures for obtaining its automatic consent to make certain changes in the methods of accounting for amounts paid to acquire, produce or improve tangible property (see IRS Changes Procedutes for Accounting Method Changes for Tangible Property).

The new revenue procedure makes further modifications. It also modifies Rev. Proc. 2011-14 and allows a late partial disposition election or a revocation of a general asset account election to be treated as a change in method of accounting for a limited period of time.

The revenue procedure also modifies section 6.01 of the appendix in Rev. Proc. 2011-14 to waive a scope limitation under certain circumstances.